Hello All
First time investor here and have been on the hunt for a property for the last year. Most of the units I have looked at don't seem to work out, Im trying to be cashflow positive or neutral so I can continue to save and get into my next property. I have a few points I want to hit "is this a good investment" and some SEC 8 questions.
Fully occupied 6 unit SEC 8 in a NJ shore town (1) 3BR (3) 2BR (2) 1 BR. According to the owner document they pay water/sewer (6,200/yr) and gas/electric (7,800/yr)
SECTION 8 QUESTIONS
The current owner provided a document with individual rents totaling 7,900/mo (waiting on actual lease paperwork to confirm this) stating that all units were at 1-bedroom rates. They also included a list of what these rents should be based on using the current market 1/2/3BR rates total gross at 9,900/mo (Going to hit the HUD site to confirm this). I know there are caps on rental increases so what does this mean to me? Can I increase these rents to improve my cash flow?
The area is up and coming and I know the town is looking to "clean things up". There are high-end homes popping up on a regular basis and they are closing down the shore motels and run-down buildings in the area. How does having a SEC 8 occupied building affect me as Im hoping to make this a long-term hold. What are the upside/downside long-term effects when all of the homes in the neighborhood change from beach bungalows to million-dollar homes?
Im assuming there wont be much to "fix" to make it rental ready as SEC 8 has requirements to maintain things and are inspected regularly. Thoughts?
INVESTMENT QUESTIONS
Does this look like a good first step into the real estate world? It's showing negative cash flow now and the hope would be to get the rents to where we can break even at the least.
https://www.biggerpockets.com/...
Ive also been looking into the Florida market condos (Naples and Miami) as another avenue....is that a better route to go?
I will probably have more questions, but this is at least a start. There is a walkthrough next week and I have my lender and lawyer in place but just want to get some feedback here.
