Hackensack, NJ Condo Purchase-Anatomy of the Deal

Here in North Jersey and across the US, it has gotten harder and harder to find any deals for investors off the MLS. However, I just closed on this 1 bedroom condo in Hackensack for an investor buyer client. 2% rule is almost impossible here in Bergen County, and 1% isn't even easy, but my client got a good deal on this one.

• Property Type: 1 Bedroom Condo
• List Price: $159,000
• Purchase Price: $145,000
• Financing: Conventional Mortgage with 20% down
• Square Feet: 800
• Current Rent: $1350
  Market Rent: $1650-$1700
  HOA: $400
• Taxes: $4324
• Days on the Market:149
• ARV: $215,000
• Unit sat on the market so long because the unit isn't in great shape, tenant made it difficult to show (could be only shown during a 2 hour window on Sundays), and the seller would only sell it with the tenant in place. It had 2 other deals fall through. My client was willing to close with the tenant in place since she purchased the property about $25-$30k under the market value.

There is already a Section 8 tenant in place. Her rent is currently $1350, but we spoke to the case manager for Section 8, and the new landlord can raise her rent to $1450 with no issues. The plan is to keep the tenant for the short term month to month. After she moves out, renovate the condo (needs about $25k to update the kitchen, bath, refinish the floors, and paint). Then find a new tenant at market rent of $1650 to $1700.

Because of the under market purchase price, buyer already has instant equity. After renovations are complete, she is going to do the BRRR strategy and pull out her original down deposit. She could also decide to flip the property after renovations. A recent, renovated unit sold for $215,000 in the building.

This is her 2nd investment condo purchase and already looking for the next deal to add to her portfolio. 

I think off-market deals are the best options for investors in North Jersey with the COVID increase in demand and lack of inventory, but the MLS can still be an option. If you are willing to do what others won't, there are still some deals to be had still.