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Newark Multi-Family Investing or Primary Ownership

Let’s take a look today at multi-family investing in Essex County.  I am noticing more and more that prices are beginning to level off in the Newark multi-family market.  There are a lot of short sales, some REO, and other traditional sales out there.  No need to get into a bidding war on a listing that has multiple offers.  There are bigger fish to fry.  Multi family homes make great income producing investments and have been a staple in some of the wealthiest investors in New Jersey’s portfolio.

I’ve recently come across several Newark multi family homes for sale that appear from the pictures to be in great condition, some newer construction, and some older.  I’ll take one in particular that look good to me.  See numbers below:  (We handle purchases and assist in selling via listing the properties in Newark with our thorough international marketing strategies)

4-Family Home:  Located off South Orange Ave in Newark:  100% Occupied

Asking Price:  $199,000

Purchase @ $199,000 – 30 Year Fixed Mortgage at 5.25% for investor financing.  Less if owner occupied.  Let’s look at the higher rate for investors for conservative sake.

Principal Amount:         $160,100

Monthly Mortgage Payment:                                  $884  +/-

Annual Real Estate Tax: $5,200 Annual  or              $433 per month

Insurance:  $1,500 Annual or                                 $125 per month

Mortgage, Reserves & Escrow Debt TOTAL:                $1,442  per month

Rental Income @ $850, $875, $875, $900:            $3,500

Less Expenses & Debt                                       $1,442

Monthly Surplus Income:                                 $2,058

Annual Surplus Income:                                  $24,696  (Positive Cash Flow)

Capitalization Rate:                                            12.4%

The nice thing about purchasing multi-family homes that are already occupied is that your lender will offset the mortgage debt with the current rental income, which will give you more leverage with your Debt To Income ratio.

So there you have it.  That is just one example of a how the numbers can work out if you are looking for investment property or are looking for your own home that could off-set your mortgage. 

Be sure to contact us if you are looking to buy or sell multi-family home(s) in Newark or anywhere else in Northern Jersey for that matter.  We are in it to win it, just for you!

  

 

 

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