Cash out or HELOC to begin multifamily investing in northern NJ?

8 Replies

Hi everyone!! I've been listening to podcasts non stop, flipping through forums, and scouring the mls day after day. I want to begin my investing journey by purchasing a small multifamily in Northern NJ and house-hacking for a short period of time until I can complete the BRRR process and move on to the next property. I would be able to invest anywhere from Elizabeth, NJ and north (because of my work commute). I currently have a home in Haskell that i owe $189,000 on and would appraise for somewhere around $260,000. I am still paying PMI on my home (bought for $212,000).

My idea is to refinance to remove PMI. At that point, would it be smarter to cash out refinance or get a HELOC to get some cash to invest in a small multifamily?

I would love to connect with local brokers so I can get a good idea of my options and what would work best for me.  Also, I would love to be able to help out any other investors by running numbers or anything else they need so I can gain some experience!

Any advice/connections would be very appreciated! Thanks everyone :)


You might check with your CPA before doing a HELOC. If I understand the new Tax law, you can no longer deduct the interest from the HELOC. But, sometimes, you have to do what you have to do to get started.

What do small apartment buildings go for in your area on a per unit basis?

If you are able, I would encourage you to look at 5+ units.  The financing on 5+ unit buildings look at the income from the property rather than the income of the buyer.  If you buy 4 or less units, traditional financing will be subject to your debt to income ratio. 

Why not both? Do a refi for the portion that is your existing mortgage and then add a HELOC on top for the balance. The HELOC amount will fluctuate as you spend and repay. But the primary mortgage stays the same with equal monthly payments and no PMI.

Hi @Bethany Weinmann ,

Aren’t those podcasts great! I’m not to far from you and would be happy to help if I can. Previously investing out of state, I didn’t think it was possible to cash flow smaller properties in Northern NJ. I was wrong! It’s not quite as easy as some other markets but it’s very doable, especially if you’re willing to get a little dirty.

My main profession is Financial Planning and We also have a number of lenders we work with as well as hard money.

Let me know if you want to talk.


Hello Bethany, 

In regards to your home you could get your current primary residence formally appraised and present it to the bank who's holding your mortgage. If your primary residence does indeed exceed 20% in equity you can then request them to drop the PMI from your payments.

The best way to get the formal appraisal might be to call your lender and ask them what they will accept as an official appraisal and then work with them to get that scheduled.


On your other topic, I too live in New Jersey and am in the process of remodeling my existing home and then putting it up for sale in March 2018 so that I can free up my debtability to purchase my first multi-family in Northern Jersey (closer to work) which I'll be "House-Hacking".

Good Luck !!  :-D

love bigger pockets im in the same path 25 about to look for a 3 or 4 unit muti fam to house hack and buy another under my moms name to have two but im worry about the property tax affecting cash flow and most cash flow that are good are in D class areas am i wrong?

Hi @Bethany Weinmann , I have an awesome lender I work with, he has helped me with all my deals in Northern New Jersey, he always finds a way or a program that works for whatever the circumstance is. Be careful getting a HELOC or doing anything before talking to a lender because it can affect your ability to purchase or qualify once it is done. Let me know and I can share his contact info. Best of luck!

@Mario Gonzalez , awesome to hear you are looking to begin investing! Make sure you talk to a good lender and share your ideas, specially one that is familiar with real estate investing as they can guide you to the best lending strategy to take when trying to purchase more than 1 property.  Let me know and I can also connect you with the lender I work with.

@Bethany Weinmann , we are mostly in Sussex and Morris County but recently looking at some potential projects in Essex too

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