Developer · Little Ferry, NJ · Member since 2016 · 426 posts · 226 votes
So I am fairly new to the REI scene and I was scouring the internet for buying opportunities and I think I found something that was appealing to the eye. I'm in need of some advice as I am just an amateur and need some guidance on this purchase. Please let me know what you think.
It is Located in Newark New Jersey, near the Garden State Parkway and walking distance from bus stop to NY.
3 Family Apartment/Rental (290k)
1 - 3 bedroom / 1 Bath
2 - 4 bedroom / 1 Bath
Fully Renovated and Fully Occupied (currently)
1050sq/ft Ea Unit
$4150/Monthly Cash Flow
I was going to contact the guy and talk to him about a showing but I first wanted to run the details with the BP community to try to guide me. I haven't seen it in person but the pictures look pretty good. If someone is interested in helping/guiding me, it would be highly appreciated. Additionally, if you want to see the pictures, please send me a PM and I'll be glad to show you them.
Investor · Greenville, SC · Member since 2016 · 163 posts · 108 votes
10y
There are dozens of great resources on BP for you to run your potential purchase through. I would recommend going to see the property to make the search "real." Regardless if it is something you decide to pull the trigger on or not, the action of getting out of your comfort zone will definitely jump start your REI career.
"Action is the foundational key to all success." Thomas Jefferson
Investor · Greenville, SC · Member since 2016 · 163 posts · 108 votes
10y
There are dozens of great resources on BP for you to run your potential purchase through. I would recommend going to see the property to make the search "real." Regardless if it is something you decide to pull the trigger on or not, the action of getting out of your comfort zone will definitely jump start your REI career.
"Action is the foundational key to all success." Thomas Jefferson
Developer · Little Ferry, NJ · Member since 2016 · 426 posts · 226 votes
10y
@Mario Brown I definitely dig that quote, one of my favorites. Though I'm not afraid, but the real issue is that I'm quite afraid that when I meet the guy to see the home, he is going to see that I'm 19 and that he is going to take me a joke. Additionally, I don't have many connects and because I'm quite inexperienced I would like to have a seasoned investor there by my side to guide me and tell me what to look for. Also, getting the capital to start the transaction would also be quite difficult as I have no track record with REI and PML won't like the sound of that. You see where I am coming from?
Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
10y
Hey Matt,
I would start by finding out how much each apartment is being rented for, and then determine if thats below, at or above your markets rental rate.
Next I would talk with an agent in your area to see if they can get you a CMA (Comparable Market Analysis) so you can see if their price is close to similar properties that have sold in the past.
Does the building need any work? If not, how long has it been since a roof has been put on it (hvac, water heater, siding, ect). These all have lifespans, so knowing where theyre at in their span will help you estimate when you might need to update them.
Have you considered how you'd finance the property? Cash purchase, FHA, conventional loan, hard money, seller financing, ect? Each method is going to affect your cash flow in different ways
Im on my phone (at work) or else Id keep going. Feel free to send me a pm if you have questions. Maybe I can help. Good luck!
Investor · Greenville, SC · Member since 2016 · 163 posts · 108 votes
10y
@Mateusz Prawdzik absolutely man that makes more sense, sounds like it is less about this particular purchase and more about you building a network and finding a mentor or two? That is exactly how i got started.
Who calculated what the cash flow was - you or the seller? If the seller calculated it, assume it will not be the same for you. If you calculated it, why don't you tell us how you came up with that number, based on expected rents and expenses plus debt service / financing payments.
Developer · Little Ferry, NJ · Member since 2016 · 426 posts · 226 votes
10y
@Steve Babiak I never ended up purchasing this property, but the cash flow was calculated by the seller. That is a good point that I will consider. In the future, I will consider my own expenses and cash flow prior to buying the property.