I live in New Jersey and am a new investor (getting into wholesaling to generate cash and then doing a buy and hold strategy). I am considering investing in an area that is a C minus (that is my estimate of the grading) - Clementon NJ. I am looking for thoughts from experienced investors (based on my thoughts below).
I drove by the property - the units look well enough taken care of. The area isn't awful but is known for some crime and drug activity, and is a lower income working class neighborhood. It isn't a "war zone", but there is crime and the schools aren't well regarded. The population is holding steady over the past 10 years - no growth but no contraction.
Current landlord:
-Bought the property for $40K in 2016 and it and others around it have significantly appreciated since
-Claims he is selling because he is moving and getting older
-Property is occupied on a month to month and he claims they would consider a long-term lease. Has tenants in the property who he claims are "great" and "always pay on time"
Note: I have not yet toured the property or asked for proof of on time payment from the current tenants
My analysis on the deal is this:
Target purchase price: $105K (current investor is asking 125K which is too high based on comps)
Current monthly rent: $1,450
Expenses: which includes mortgage, taxes, HOA, and 5% for repairs, 5% vacancy, 5% capex (HOA does cover outside)
Monthly return: $324/month
