Is this deal worth it / what else should I take into account
Hi, my name is Tom, I am new to the forum and real restate investing. I'm looking at putting in an offer on a multifamily home in NJ. I'm sure I can lock it in this week as the seller has not listed it and is trying to avoid scaring off his current tenants (he's looking to retire) . The home has three apartments and a garage that are all occupied ( on Month to Month / the tenants have been there for years). I intend to get this on an FHA loan at (with 3.5 down ) . It cash flows well for the limited amount of money that I will be sinking in to acquire the property. The tenants cover all expenses besides water. The home has a new roof, water heater, and natural gas connection.
I have gotten the comps for the area , and have factored in the upgrade in which the owner has done to the property , I feel he is asking for about 5k-10K over. I won't be getting much of a deal up front , but can avoid the covid demand from fleeing New Yorkers and bidding war that is happening here in new Jersey for Multifamily homes.
Seller is asking for 375k , Unit 1 1200 , Unit 2 1400, Unit 3 1000 , garage 550 month .
Property Taxes 8,000 yearly
Water about 150 month .
Any advise is greatly appreciated.
Thanks ,
Tom
Most Popular Reply
@Tom McCabe Congrats! Sounds like a great opportunity for you to get into investing. I would add maintenance, reserves, and insurance to your expenses and factor a percent for vacancy to get an accurate picture of your cash-flow. Also don't forget your MIP (Mortgage Insurance Premium) when using an FHA loan.