south jersey duplex investing for cash flow

[Joshua Wileczek]

Hi all,

First time real estate investor here. I'm looking to get involved in a turn key duplex in south jersey selling for 140000 and currently rented for 850 per unit. The unit has been on the market for 2 months. Taxes on the property are 4600 per year. My plan is to put 10000 down on the house. When I plug the numbers into a mortgage calculator accounting for taxes and PMI and budgeting 150$ per month for repairs I'm getting an all in cost of 1300 per month. Do these numbers make sense for someone looking to invest For cash flow in a relatively passive manner. If not does anyone have any suggestions on how to refine my search a little? Am I missing any key factors in my evaluation? Much thanks in advance!

[James Masotti]

@Joshua Wileczek - You're missing a number of factors you need to take into consideration.

Your monthly budget should include all of the following on top of mortgage, PMI, and taxes:

Repairs - $160

CapEx - $160

Vacancy - $136

Property Management - $160

Insurance - Somewhere between 50 and 120 a month depending on your coverage and agent.

In that regard  Here's how the numbers would break down

Rent	$ 1,700.00
Mortgage/Taxes/PMI	$ -1,150.00
Repairs	$ -160.00
CapEx	$ -160.00
Vacancy	$ -136.00
Property Management	$ -160.00
Insurance	$ -75.00
NOI - aka..cash flow	$ -141.00

Based on this math it doesn't look like a good investment to me..and is the reason why in spite of living in Southern New Jersey, I don't actually invest here :)