[Calc Review] This Deal looks SOLID, but you decide!

[Adam Scheetz]

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Quick Synopsis in addition to the linked report.

1. SFH. 3/2. 1388 sq.ft. Great community. Good clean neighborhood. REO.
2. Asking $89,000
3. Rent $1600-1700
4. ARV: $195,000- $210,000 Conservative Estimate.
5. Estimated Rehab: $50,000
6. Taxes: $5150
7. Insurance: Conservatively-$125/mth
8. Built in 1995 so E&P are solid. 
9. Needs rehab, not a full gut, but moderate rehab to Drywall, floors, kitchen and possibly bathrooms also.
10. Nice neighborhood plot, middle income area, well kept homes

I'm looking at a renovation loan through an experienced and trusted lender who is very familiar with 203k/FNMA Home Style Renovation/Etc loans.

This area is expected to appreciate someone in the ball park of 4-7% this year with the influx of some new job growth drivers and attractions that are bringing people in. 

Please let me know what you think.

[Adam Scheetz]

@Michael P. @Kyle Neff

A lot of the drivers are based on Atlantic City and those drivers strengthen the outer suburbs. There are four casinos two of which have been recently renovated. Taj Mahal and Revel Casino are undergoing huge remodels. The hard rock casino and hotel, As well as the ocean resort Casino and Hotel are going to be big drivers for that area.

The South Jersey Business Survey quarterly survey is a quarterly survey of business establishments put out by the federal reserve bank in Philly. It reported that 47 percent of businesses expect an increase in activity during the first quarter. The survey also reported that in the next six months there is expectation that new hiring will increase 38%, 59% increase in sales, and 62% increase in activity.

The real estate market is also showing growth with an increase in median home price by 10%, Average time on market decreased by 17%, And sales increased by 15%.

Long story short the Atlantic City economy was once a huge if not the biggest economic driver in New Jersey. It took a hit and had started to bounce back Even before casino game started moving back in. But to be perfectly honest the casino and the nightlife game are the primary contributors to why activity on the boardwalk and why additional attractions are all making their way to Atlantic City.

As an investor, I could just as easily look in Atlantic City itself if that was my play. But it’s not. As a buy and hold, potentially flipping, I’m more interested in the outskirts and suburbs of Atlantic City where I feel like families would gravitate towards, viable foreclosures are more present, and lower purchase prices are available. In the future I may very well consider rentals as an Airbnb closer to AC.

[Kyle Neff]

@Adam Scheetz

Thank you for the extremely thorough response! You are right - if it were that easy to find all the economic data in a "one stop shop" method, everyone would be doing it! I appreciate how detailed you are with the factors in your market and how they are specific to NJ. I will likely use different indicators for Cleveland, Cinci, etc. Let's keep in touch!

[Kurt Kwart]

Originally posted by @Michael P.:

What’s west of AC, empty space and then Philly? (Joking) What are the drivers?

Lots of commuters.  With no traffic you can get from AC to Philly in 45 minutes and NYC in under 2 hours. Most people in the 20 mile radius of Philly, on the NJ side, commute in.  Beyond that 20 miles gets into lots of farmland.  Then about 20 miles out from AC it gets more dense.

The FAA tech center is a key airport and airport research center for the govt.  All Airforce One service is done there along with fighter jets that can be in the air quickly.

Most of the "Shore" (beach towns besides AC) are expensive second home markets

[Adam Scheetz]

@Kurt Kwart I didn’t even mention the FAA or Aviation industry there. There is definitely a presence. Thanks so much for your response!!

[Kurt Kwart]

Originally posted by @Adam Scheetz:

@Kurt Kwart I didn’t even mention the FAA or Aviation industry there. There is definitely a presence. Thanks so much for your response!!

Is this the first property you will own? Personally I don't like flipping that much but the first time buyers market is stable here now. That ARV seems a little high (and maybe the rent numbers too) but I don't know the specific area. If it's going to be sold to a first time buyer, keep everything as "affordable" as possible. If you are young and the first deal have you considered house hacking?

[Spencer Faulkner]

@Adam Scheetz

Everything seems legitimate, just make sure you always account for that "uh oh" situation.

[Adam Scheetz]

So quick update. The bank appears to have pulled the listing as a foreclosure. The price oddly has gone from 89k to 193k but no details have been provided. It’s kind of perplexing. My agent is trying to get someone but no joy as of yet. I suppose this is what you get when you deal with REOs banks who don’t have a streamlined process with their properties.

[Niels Bjørn Toppenberg]

@Adam Scheetz

Go for it, but I would up the repair and caped to 8%.

It looks like a great deal - well done and congrats :)

[Paul Stewart]

@Adam Scheetz Did you get flood quotes? 1995 won't be built to FEMA standards get some quotes because that could really effect your cash flow as well. Also heads up in AC you have to pay the city every year for a landlord occupancy certificate.... keep in mind with gauging rent in AC there are so many available properties in the area for rent. The recently built NOBE luxury apartments that just opened is basically empty.

[Adam Scheetz]

@Paul Stewart thanks for the info. I've been avoiding AC for that reason. The market seems flooded with cheap rentals within the city. Speaking of flooded, thanks for the heads up on the flood cert. I know up in Keansburg, the insurance agency i was working with was sure to give me the skinny on FEMA flood mapping for the city areas. I'll be sure to include that in my research. Thanks!