What do folks think about this potential deal?

[Chris Monello]

Hi Everyone - my first post on BiggerPockets, but have been following the forum and podcasts for several months.  Have a potential deal at hand and was curious what others think about the financial profile, returns, and anything I might be missing.

Here are the key stats - based on quotes and research. 

Location: North Jersey, 15 min outside the city with public transport options - heavily populated and rent heavy neighborhood.  Working class with demand picking up.  Prices have come up though over past 2 years, so not buying at a low by any means. 

Purchase Price: $600,000

2 family - average / slightly above average existing condition 

Total Monthly Income (Rent + Parking spot):  $4,400

Mortgage + Tax: $3,300 

Water / Sewer:  $900 a year, $75 a month

Insurance: $1,200 a year or $100 a month 

Utility expense paid by me: $50 a  month, rest paid by tenants

Lawn / Snow: $50 a month average

Unexpected Maintenance:  $100 a month

Total net monthly cash flow of $725, Cash on Cash Return of 5.2% (based on down payment, closing costs, and assumed $15,000 investment in units to upgrade)

Not a staggering return but seems to be cash flow positive and should be stable.  Maybe some appreciation but not banking on it.   Any thoughts?

[Chris Monello]

Thanks all!  Yeah, it feels a bit expensive.  Crunching numbers on a lot of deals in the neighborhood and seem to be hard to come by.  Haven't made any decisions just yet, so appreciate the feedback!

I manage my own properties, and do my own book keeping, but hear you on the potential vacancy expense.   Certainly need to factor that in and agree, 100% walk away from negative cash flows.