All Forum Posts by: Chris Townley

Hi All,

I'm analyzing a deal for an off-market two family, and was hoping to get some other opinions.

Here are the numbers:

Asking Price: $324,000

Gross Monthly Income: $2500

Operating Expenses: $1467 (Insurance: $100; Taxes: $566; Water: $100; Vacancy: $125; Repair: $200; CapEx: $200; Management: $175)

With 25% down and a 5% mortgage, the property has negative cashflow at the asking price (-271).

I have to lower the offer price to $200k with the mortgage to get a monthly cashflow of $228, which is still pretty tight IMO.

Are people in this market just buying all cash? Without a mortgage at $324k purchase price it cashflows $1033/mo, but the cash-on-cash ROI is only 3.7%, so I can't imaging people are doing this.

Is the seller just asking too much, or am I missing something?

You should talk to @Gregory Tibok, He's a real estate agent and investor who works in New Brunswick. 

@Rich Hupper It's a service that helps real estate investors create websites for lead generation. 

www.oncarrot.com

Do you know who was paying the taxes? Two things I would try is actually talking to a person in the tax assesor's office (if you haven't already) and trying to get a name of who is responsible to pay the taxes, or try talking to the neighbors, maybe they have a contact for a family member of the previous owner.

@Vita Dementchoukova If the property is still available please send me the details.

Did you run it through the wholesaling calculator?

https://www.biggerpockets.com/wholesaling-calculator

@Jasmine Cotes

A great mortgage broker i've used before is Bishoi Nageh at Petra Cephas

Hi @Gurpal Cheema,

I would suggest you read through some of the materials provided by the state on this website http://www.state.nj.us/dca/divisions/codes/offices... Especially the information about leases and evictions. I believe you're supposed to provide them a written notice 30 days before the expiration of the lease telling them to either renew or confirm they're leaving.

Also, it's probably time to bring in a attorney since it seems you've missed some deadlines.

@Account Closed,

Yes, at a 15% cap rate, you would value the property in your example at a lower amount. That is what you're willing to pay for it to obtain a 15% ROR, not necessarily what it is worth, or what the present owner will accept. 

Higher cap rate is better for a buyer, lower cap rate is better for the seller. 

@Jeremy Pace Thanks, I'll check them out.