Newbies nervous about rental prospects

[David S.]

Hey all,

I'm looking at a HUD deal right now and my bidding deadline is for tonight. It's a triplex listed at 132k (my bid would not go above 105K, which probably would not be accepted but we will see). It probably needs between 35-45k rehab. Waiting for comps to be pulled but based on what I've seen I'm comfortable putting it at 200k. Total monthly gross projected to be between 2,600-3,000. I am not super familiar with this area but I am comfortable with it. It's near a rough area but this is definitely a better part as it is a couple minutes from public transportation train (Greenville part of Jersey City for those who are familiar). However, in my research I came across a couple of issues that is holding me up mentally. I spoke to a couple of brokers and one broker said that there is a large supply of apartments on the market and combined with a large supply of short sales in the area, it seems that is hurting the rental market further because prospective tenants, with relative ease, could get into a house through various programs for financing.

I would like to hear your thoughts on the above. The deal is certainly not exceptional. The taxes for this 3 family is about $6,600 I think (Jersey.....). Is this something you would stay away from except if it exceptional?

Looking forward to the BP input.
Thanks,
DS