I'm wanting to get started by investing in New Jersey

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I'm wanting to get started by investing in New Jersey

Jesse Runyon
Member since 2018 · 4 posts · 1 vote

Hey guys, here's a little about me. I've been listening to biggerpockets podcasts and lurking in real estate investing for about a year. I'm 25 years old and I currently just left my job in home improvement, specifically kitchen and bathrooms to go out on my own. Even though I don't have 100% traction right now, i'm able to do this because I still live at home and have very few if any, expenses. I've saved mostly everything I earned and I'm ready to get started.

I live in Central Jersey and I'm wondering the best strategy for me in my current situation. I was looking at South Jersey, specifically the Deptford/Sicklerville area to invest because the homes are cheap and it seems like a decent renting market being close to Philly. I'm open to trending areas and suggestions nonetheless. 


I understand house hacking is the way to jump start getting into this, mostly because it cuts out the mortgage expense from your life. But, if i'm still living at home rent free, is this still the best strategy for me? I know how to do the work, and I'd be ecstatic to do the work and put in sweat equity as long as it would pay out.

This is my first post, so I'm sorry if I left anything out. I just feel like I need a little guidance to get the ball rolling. I'm really excited to get started and living a better and happier life.

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  • Stephen Kappre
    Real Estate Agent · South Jersey · Member since 2017 · 252 posts · 143 votes
    7y

    Welcome. Question ... are you paying cash for this property or doing hard money? If you recently quit your job and started out on your own, getting a traditional mortgage could be difficult if at all possible. You could look into an FHA loan possibly with a cosigner and purchase a 1-4 unit property. If you are house hacking and the property needs substantial work, cash or hard money is most likely the only way to go. Congrats on getting started. Keep posting and asking questions!

    0Reply
  • Tom O'Donnell
    Member since 2019 · 8 posts · 2 votes
    7y

    Welcome @Jesse Runyon! I'm in a similar situation where I am living at home and working towards a house hack. You're already on a great path by saving a large portion of your income for investing. If you are looking to acquire a property with a conventional loan you will need to show proof of income. You mentioned you just left your previous job, which could make getting conventional financing much tougher. W-2 income is two years worth of tax returns. Are you able to keep your current job while you invest in your first property? It's much easier to qualify and pay for unexpected expenses / rehab expenses this way.

    0Reply
  • Jesse Runyon
    OP
    Member since 2018 · 4 posts · 1 vote
    7y
    Originally posted by @Stephen Kappre:

    Welcome. Question ... are you paying cash for this property or doing hard money? If you recently quit your job and started out on your own, getting a traditional mortgage could be difficult if at all possible. You could look into an FHA loan possibly with a cosigner and purchase a 1-4 unit property. If you are house hacking and the property needs substantial work, cash or hard money is most likely the only way to go. Congrats on getting started. Keep posting and asking questions!

    I was looking to finance. I am still making just as much if not more being self employed then I was working for this company. If this is an issue, I could still do this with a cosigner correct? Why is it that cash or hard money is the way to go for a house hack that needs work? You can't finance with an FHA loan?

    0Reply
  • Jesse Runyon
    OP
    Member since 2018 · 4 posts · 1 vote
    7y
    Originally posted by @Tom O'Donnell:

    Welcome @Jesse Runyon! I'm in a similar situation where I am living at home and working towards a house hack. You're already on a great path by saving a large portion of your income for investing. If you are looking to acquire a property with a conventional loan you will need to show proof of income. You mentioned you just left your previous job, which could make getting conventional financing much tougher. W-2 income is two years worth of tax returns. Are you able to keep your current job while you invest in your first property? It's much easier to qualify and pay for unexpected expenses / rehab expenses this way.

    Thanks man! I was looking to stay away from a conventional loan to not tie all my money up. I was thinking house hack, move out, cash flow and use more money for a down payment for a live in flip or repeating that process. I'm sorry if my post was misleading, but I still am working, just for myself. I'm not sure if you caught that and you're still saying it will be difficult for proving my income while I'm self employed.

    0Reply
  • Fasil Khan
    Real Estate Agent · Elmwood Park, NJ · Member since 2015 · 151 posts · 36 votes
    7y

    @Jesse Runyon Great that you are working and your skill set is very helpful. I suggest few things determine what your cash is available for downpayment (dp,) closing costs, rehab, do I want a partner or not, am I willing to use hard money or not, and get an approval for a loan. Possibly conventional, FHA, 203k or etc... 1. When am I looking to get this investment property by 2. Get finance & cash lined up 3. study the market in and out 4. find the right partners (realtor, loan officer, title, attorney, inspector,) most likely if you use a realtor and/loan officer who specializes in investors they can set you up with the right partners......

    Hope his helps... Good luck and welcome 

    0Reply
  • Jesse Runyon
    OP
    Member since 2018 · 4 posts · 1 vote
    7y
    Originally posted by @Fasil Khan:

    @Jesse Runyon Great that you are working and your skill set is very helpful. I suggest few things determine what your cash is available for downpayment (dp,) closing costs, rehab, do I want a partner or not, am I willing to use hard money or not, and get an approval for a loan. Possibly conventional, FHA, 203k or etc... 1. When am I looking to get this investment property by 2. Get finance & cash lined up 3. study the market in and out 4. find the right partners (realtor, loan officer, title, attorney, inspector,) most likely if you use a realtor and/loan officer who specializes in investors they can set you up with the right partners......

    Hope his helps... Good luck and welcome 

    Thanks for the reply Fasil. I've thought about it and I think BRRRR investing may be the way to go for me. I'd like to use my cash for down payment, closing, rehab (Potentially lended through family member). As of right now I don't think I want to get involved with a partner (referring to an investment partner) until I'm at a point where I believe I need one. I think conventional loan is the way to go with this strategy. What are the requirements to quality for a FHA or 203k or both together?

    0Reply
  • Fasil Khan
    Real Estate Agent · Elmwood Park, NJ · Member since 2015 · 151 posts · 36 votes
    7y

    @Jesse Runyon FHA some requirements but not limited to:

    • FICO® score at least 580 = 3.5% down payment.
    • FICO® score between 500 and 579 = 10% down payment.
    • MIP (Mortgage Insurance Premium ) is required.
    • Debt-to-Income Ratio < 43%.
    • The home must be the borrower's primary residence.
    • Borrower must have steady income and proof of employment.

    FHA is good loan however, in this market finding a little harder to get then accepted not impossible just competitive right now. Yes, you are correct by saying going for conventional is better.

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