Analyzing a MultiFamily deal in Union City NJ

[Chris H.]

Looking at a 3 family w/ finished basement in Union City below I-495, approximately cost $750k with conventional loans (20%).

At present time, the basement is non a permitted living dwelling unit.  There's 2 vacant units and 1 rented for approximately 1300/mo.  Believe this unit was registered with the UC rent control boards.  Does the 2 other vacant units fall under the same Union City Rent Stabilization Ordinance 2017?   Don't think they were registered, but is there a online link or local clerk's office to check if these two vacant units were registered?

Would this be a good or bad deal?  Plan to fix up the 2 vacant units and raise the rent roll.  The after repairs rental should be enough to cover my expenses and cash flow ~$200 - 500 per month.  Thinking about a buy and hold strategy, and hopefully the UC area will appreciate over next 5-10 years. 

Any thoughts are welcome, thank you. 

[Jonathan Greene]

That price is too high. Why are the units vacant? If the other vacant units would only rent for $1,300 also you are at $3,900 on a $750,000 purchase price. If you are going by classic 1% rule, which you need to try to get higher in NJ with the taxes, you need your rent roll at $7,500. Union City has a lot of options, but not a lot of room for new builds which is good. Is there parking? Proximity to NYC is good from there, but driving and parking is a nightmare so if you are going to pay high for a 3-family it would need to have amenities and a scalable rent roll. If it's 3 units and a non-conforming basement, it could sell high, but I'd be concerned about unrented units and renovation costs with an already high price tag.