Deal Analysis - PA Investor in NJ

[Joe P.]

Hi all! I recently sold my SFR that I was renting out - it was my first home I decided to keep to "get into the biz" but the numbers just weren't working. I was able to get some proceeds from that sale and I'm ready for my first purchase.

I found a property in NJ (I am in PA - Philadelphia) close to me, and the numbers seem almost too good to be true. I hesitate to give away too much info so I will provide some raw information that I think should be helpful:

Purchase Price:  $120,000

Financing:  Conventional 25% down at 4%

Yearly Taxes:  ~$4500 (thanks NJ...)

Units:  2 (one 3BR and one 2BR)

Area Rents:  ~$1000 for a 2 BR

I've run the numbers at $2000 per month for both units ($24,000 annually) and a 10% vacancy rate...$21,600 in NOI

The mortgage would be around $1000 per month for PITI (perhaps even slightly less)...$12,000 in TOE

• Cash flow is $800 per month
• CoC Return is 32% (!!!)
• Cap Rate is 8%

Unless I'm wrong, this seems like a no-brainer deal with great numbers as an investor, no? What am I missing?!