NJ Townhouse Buy and Hold Deal Analysis

[Harry Metzinger]

Looking at the following townhouse in South Jersey as a potential buy and hold investment:

Purchase Price: $115,000

Rehab: $12,000

ARV: $150,000

Rent: $1,550/mo.

Insurance: $50/mo.

Taxes: $325/mo.

HOA: $70/mo.

Net Operating Income: $1,105/mo.

Financing: $92,000 (or 80% of purchase price at 4.5% over 30 years) = $466/mo.

For the down payment + rehab, I have a HELOC that could fund it. 3.99% variable rate, 15 year amortization. If I used it to fund the whole $35K ($23K down payment + $12K rehab), at a 4.5% rate (I'm not going to assume my HELOC rate will remain at 3.99% throughout the 15 years), that's $268/mo.

NOI minus financing = $371/mo.

This is a B class area...a good location with an average school system.

For the sake of this thread, let's assume the rehab amount, ARV amount, and rent amount are correct.

For you buy and hold investors, would you buy this?  If not, what would need to change for you to buy it?