Hello BP community!! Im a new real estate investor in New Jersey that's really starting to Love the idea of real estate and the different avenues that real estate entails. In specific I've become keen on the idea of long term rentals and I've been position myself to acquire my first property through reading as many books as I can get my hands on, watching podcasts, and saving roughly 30k to get ready for my first purchase. I want to invest in a property in New Jersey so I can handle the property management (at least for now) to save as much of the cash flow as possible and just learn about the process of repairing properties. I would appreciate anyone who has some insight in this market or any advice for someone who's ready to take the first endeavor , thank in advance!
Hi @Patrick Cadieu how can I help? NJ is a great place to invest, it seems like you understand a little bit on how to make it work. Self managing tends to be the smart way to go in order to protect your cash flow in NJ.
@Shawn Mcenteer thanks for the response! Im trying to get a feel for the market and where would be a great place to set up a rental for the long haul. I'm not exactly sure where is a hot place for rentals at the moment without it breaking the bank, I know that can be a tall task with the market we are in. Im leaning toward something thats a fixer upper but hesitant because I don't want to get into something that needs a lot more work and I'm in over my head. would appreciate any advice you could lend on this, thanks!!
@Patrick Cadieu its all relative terms to what you consider a lot of work or not and what you consider to be breaking the bank.
Hey Patrick. I am in North Jersey and also looking to start out in real estate investing. If I can ever help I'm any way do not hesitate to reach out. We can figure this out together.
@Michelangelo Felix same here man, let me know if theres anything I can help you with! Im located in Monmouth county so if you ever need advice in this area don't hesitate to ask!
@Patrick Cadieu sounds good! I'm in Passaic county but pretty familiar with Bergen and Essex county as well.
If you are in Monmouth County, focus around you if you plan on self-managing to reduce your time. If the price points are high in your town, keep going one or two towns over in all directions to find one where price vs. rental looks good. You should not be looking at a major fixer-upper for a long-term hold on your first deal, that will fail. If you don't know what you don't know yet, you need to find something that is closer to turnkey if possible, with future value-add possibilities. You also have to be very careful of what you are buying and who (renters) you are buying into. You need to see the leases and confirm the payments and make sure all tenants are paying. If you can get something that is even cash flowing ok in NJ right now that's good as long as the tenants are solid for your plan.
@Jonathan Greene I was looking more outside of the Monmouth county area just because prices tend to be a little high in my area and I think I can get a better bang for my buck outside. I was planning on self managing to gain experience and also cut costs. As far as finding a fixer upper I was mainly looking for a property that is more cosmetic repairs like flooring, carpet, paint...etc. Like you said taking on something major is definitely out of my scope and experience and will be avoiding properties like that for now.
Why don't you house hack via FHA in NYC, Hoboken or Jersey City right now. If you can get a 4 unit and a basement, that would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield. This gets even juicer if you can split your unit with a roommate.
Lending limits are higher in NYC, but you do not need too much equity to get started. And the returns on a small equity check can be tremendous!
Moreover, the FED has printed so much money (~25% of all dollars in existence were created during COVID). This has been reflected in real estate nationwide except NYC which is a laggard. NJ has done well however, so maybe you want to look where there is more distress.
@Alexander Szikla I've considered house hacking because of the flexibility of terms that you can get with a primary multi unit dwelling but I've been primarily putting my focus SFR. Never close minded to ideas with regard to multi unit space. I haven't really looked into the Hoboken/ jersey city real estate primarily because I don't know much about the real estate there and have figured that multi units there can be quite expensive. I'm always open to new ideas/ perspectives.
@Patrick Cadieu there are very few rentals available in Ocean County. Supply/Demand !
Personally for self managing I think you should be close so you are able to quickly respond to anything emergent.
Some towns, Ocean Gate for example, the CO for rentals requires you to live in the same county as your rental, if not you have to have someone who lives there to be listed as the manager on the rental application... be sure to look into those rules before you start deciding on towns to focus your search
@Kimberly Carver yeah thats what my thought process was as well. Im looking to be within an hour drive of the property but maybe a little more if the right deal presents itself. I didn't know there was rules like that but I appreciate the heads up and ill be on the look out! do you have any advice for somebody that trying to kick off their investing career?
Why would you focus on SFR? It is much less efficient as far as scaling expenses (i.e. property taxes, insurance, etc.)
@Alexander Szikla Focusing on SFR just because they're more abundant and I feel like I can ascertain a SFR more easily but I could easily be wrong. I'm always open to different points of view!
@Michelangelo Felix and @Patrick Cadieu... I have a few rentals in Hudson County, and have been living here for almost 14 years, also I grew up in Ocean County. Def let me know if I can help work through any ideas/scenarios. Getting started can be daunting, but it is also soooo exciting. Additionally, I am a mortgage broker and private lender, happy to answer any questions
@Christene Martin yeah I would love to pass some ideas through you and hear any insight you may have!! My biggest challenge at this time is feeling confident that I found a property worthy of renting and then progressing from there.
Hey @Patrick Cadieu Welcome to BP and congrats on beginning your journey to financial freedom! I bought my first investment property at 26 y/o and like you, I read all the books — Rich Dad Poor Dad, The Millionaire Real Estate Investor, Build A Rental Property Empire, BRRRR, The Book on Rental Property Investing, to name a few — read all the blogs, articles, forums, etc., listened to the podcasts, watched the videos, you name it. Google was my best friend ha. But there came a time...
My advice, continue educating yourself and never stop. Analyze every property that comes your way in your desired market— learn market rents and values, craft your own ROI spreadsheet, keep running the numbers and checking comps. Practice this as much as you can in the beginning so when the time comes to buy you are ready and confident. Do this but do not hesitate to take action and use all that knowledge. Period. Choose a niche/strategy, double down on your criteria, then hit the ground running. Best way to learn is by doing and in most cases from failing. Don't let that stop you. You're young, ask yourself what's the worst that can happen… You have time on your hands which is everything. Surround yourself with the right people who are where you want to be. Ask a ton of questions and learn from their experiences and better yet learn from their failures so you are two steps ahead. Get after it and get to work with this attitude and you will be more than fine. I will leave you with one of my favorite quotes by neo-Confucius philosopher Wang Yangming "To know and not act, is to not know." Let that resonate.
Sounds like you have a great plan @Patrick Cadieu . If I were you, I'd go to as many local meetups as possible. Start to get your name out there! You can meet wholesalers, and have them add you to their cash buyer's list. Also, go to Facebook groups and connect with wholesalers there. Wholesalers can find properties below market value and offer great deals.
@Jeffrey Donis thank you for the advice!! I'm just staring to see how resourceful this can be and I'm definitely keeping an eye out for any groups or local meet ups in my area.