All Forum Posts by: Christopher Bell

I'm looking to continue to grow my portfolio and want to network with a few SJ Wholesalers, Retiring Landlords, Agents, and people who may know their neighbor wants to sell their ugly house :)

Just reaching out and want to say hi - and if you know of any deals I'm happy to try and work on acquisitions.

Have a great day! I wish I could make a few local meets but they're held on weekdays. I'm from South Jersey but live near Baltimore. If anyone would like to do coffee/drinks on a weekend when I'm in SJ visiting family I would love to get together!

I'm looking or Buy/Hold in any condition

Thanks!!!

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Originally posted by @Mike Bonadies:

Hi @Christopher Bell congrats on getting this far down the road with your first investment. I'm from South Jersey and I know the area very well as I have my own portfolio of properties.

First off, @Mike D'Arrigo is spot on. It doesn't make sense to look at a cap rate for 4 units and under. CoC return is much better. No financial institution is going to look at cap rate for a 4 unit and under. They look at DSCR and ARVs.

What area of South Jersey is this? That will help us evaluate the Purchase Price better and the external conditions that could affect your rental. On the surface level $147K for one single family house seems steep. Most of the landlords I work with try to be in a fully rehabbed rental in South Jersey for 75k to 80k or less a door. You also don't have and miscellaneous fees factored in. In NJ you have to get a yearly CO and a CO inspection every time you turn a unit. Furthermore you normally have to register as a landlord. These are small fees but they do have an impact. The general cost is about $75 to $150 per a CO + landlord registration which is about $50. Also expect to fail your first CO inspection if you are new to the area. There are little-isms with each town that they enforce in the inspection so your first year repair costs may be a bit higher but then they will go down as you understand the township better.

Now with that said if you are looking for passive income the higher-end neighborhoods that are still somewhat "rentable" are closer to this price point. You should have a nice pool of strong tenants to pick from.

Overall I think its a lackluster deal if you are trying to buy multiple units over the course of one to three years and you can do more with $36k. If you want very low headache passive income this could be a relatively decent.

Mike, Thanks for taking the time to respond!

This property is in the Cherry Hill NJ area - 08002. Thank you too for the input about the inspections and registration as a landlord - I was not aware of those so definitely appreciate it! The idea was to have relatively low headache and passive income. My plan is to buy 2-3 more additionally past this unit. My idea was to hopefully acquire 1 by the end of the year and work on the other 2-3 for next year. I wanted to put one into motion as a BRRR and maybe find 1-2 more that are somewhat turn-key next year. What particular area of South Jersey do you primarily work out of? I've mostly looked in the Camden/Gloucester/Burlington area as I grew up in Moorestown and just recently moved away from Cherry Hill.

I see that you're from Washington Township. That is where my wife and in-laws are. I'll be in that area 5 of the next 6 weeks as well as 10 days over the Christmas/New Year holiday. Pleasure speaking with you too! I'd love to connect and keep in touch!

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@Brent Paul

Thanks!!!

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@Erik Stewart Erik, the HELOC is a great suggestion I could definitely explore that. Also, I'm whole are you saying this is a bad deal?

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@CJ M. Thanks for the input! Forgot about a Capex included too

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@Dennis M. The $36,500 includes the closing costs on the property as an FYI. It’s in a pretty desirable area and market value is around 175-180 so I’m also considering equity on the back end as well. I’ve seen many say 8-12% cash/cash is doing well. Thanks for the input though!

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@Justin Elliott

Justin, here’s what I had. I’m not 100% sure that I have my calculations correct either. Starting out there is some confusion on which calculation compute the debt services, taxes, down payment, total invested etc and which computes what. I appreciate your help

Income

Down payment/closing - $36,500

Annual Income - $19,800

Expenses - $14,370

Debt Service - @ 3.89% - $6,480

Taxes - $5,400

Maintenance - $600

Insurance $900

Vacancy 5% - $990

Cashflow - $5,430

Cash/Cash - $5,430/36,500 = 14.9%

Am I incorrect with some of the calculations?

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@Dan Milinazzo

Dan, thanks for the advice! I will be managing the property myself so I’ll be able to keep a lot of that income. My goal is to begin building a portfolio of properties and ultimately work my way into small apartments with 1 address and more doors. A lot I’ve researched says early on I need to generate cash flow and equity. Eventually utilizing the pay down on this and various other properties to leverage the funds for the small apartments.

Hopefully, this is the first of many. I looked up a GRM and it came to about 7.5%. I also factored vacancy, maintenance, etc in the mix and still yield about $300/$350 net a month so I guess it still seems like a pretty decent deal. I've listened to a lot of BP Podcasts and many say if you even make $100/mo it's worth exploring.

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Hey BP!

Looking to buy my first rental property. It's in the South Jersey market and want your input on the deal

Single Family Home, Purchase Price $147,500, located in South Jersey, rent is 1600-1700 and is mostly turn key. Taxes are 5,400 a year. 3/1 1100 sq. 20% down on the loan my month expense with mortgage, taxes, is $1,075. Cash up front is about $36,500. The recent comps with slightly more updating have sold for 180ish so instant equity in the home. What are your thoughts on the deal? I'm looking to rent it out and being my first of what is to hopefully become many it may yield some decent cashflow to start.

Thanks for any input BP! When I calculate everything it's about a 15% Cash on Cash return - but cap rate is low at about 4%. What's more important for me to look at on this type of home?

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All Forum Posts by: Christopher Bell

Christopher Bell has started 8 posts and replied 34 times.

Post: South Jersey Investor - Looking To Grow

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