Weequahic neighborhood Newark NJ property analysis

[Lior Solomon]

Hi everyone,

I need your feedback on this property I've found. please bear in mind that:

a. I'm a new investor looking for my first deal.

b. I'm not that familiar with Newark and I need some location feedback as well.

From a quick research I ran it seems that Weequahic neighborhood is an up and coming neighborhood. the safer part of it is between Bergen street and Weequahic park. The property I'm looking at is in the corner of Bergen street and Mapes Ave. Any objections so far?

As for the property analysis:

2 unit, 2500 sq

Purchase price: $179K

Rent roll $34,200

Gross income $31,350

Total expenses $11,920

Net operation income $19,430

Net after mortgage $7,743

Cap rate 9.91%

Cash on Cash 17.44%

I'm going to put a down payment of $44K for the mortgage.

It's a turnkey project, the house is going to be purchased after the house is fully renovated and populated with tenants.

I'm paying 10% for management(same guy that renovates the place will do the PM)

It sounds like something modest to start with, there is a big hospital next by and a police station in the end of the street. it's also a 11 min drive from the Rutgers University.

What's concerns me right now is how do I protect myself from a case where the guy that sells me this turnkey project for some reason can't accomplish the renovation and we already settled for the property price after renovation? I guess only paying the full amount after completion of renovation will do the job, right?

Thanks in advance,

Lior