how to search for an investment property?

Question

What to take into consideration when purchasing investment property? I am looking for an investment property in NJ, price range 320k-400k.Advice and recommendations are highly appreciated

Jay Thomas · Answer

Thinking about grabbing an investment property in New Jersey with a budget between $320k and $400k? Cool move. Here's the drill. First things first, check out what's buzzing in the local scene – target areas where people are keen on rentals and there's potential for growth. Scope out amenities and crime rates for that neighborhood vibe. Now, property types: single-family homes bring in more cash but need more TLC, multi-family setups offer variety but can be a bit of a juggle, and condos or townhouses are budget-friendly but might have some HOA quirks. Money-wise, think about tossing in a bit more upfront, get that mortgage green light, and don't forget to budget for all those closing costs, rental income, and regular expenses. Have a chat with a tax pro to navigate the money side. Lastly, define your investment strategy, whether it's fix and flip, buy-and-hold for long-term income, or short-term rentals like Airbnb for potentially higher returns with more intensive management.

Shawn Mcenteer · Answer

hi @Tom Hall cash flow is tough to find in todays market unless you are open to major renovation.  To be honest thats kind of how its always been in new jersey.   Finding a property that needs work in NJ tends to be the way to go if you want a shot at cash flow. Equity gains tend to be much more likely

Ethan Gidcumb · Answer

Hey Tom, I would like to piggyback off of what Shawn Mcenteer mentioned. A great investment property could be one that requires very low renovations, this way you could negotiate for a deal and it could be an easy flip into a buy and hold. Once you have a property that you can rent out, you could utilize long-term financing. If you can find financing through a conventional bank, you will save money on closing costs compared to a hard money lender. However, if you or the property doesn't qualify for long-term financing through a bank, you can utilize a DSCR loan through a hard money lender. I hope this helps and good luck in your investments!

Sunny A. · Answer

I think you can find good deals on multi family properties in South Jersey in that budget.

Joseph Guzzardi Jr · Answer

@Tom Hall you need to narrow down your location and buy box. Single fam vs multi? Fix n flip vs buy n hold. Narrow your location to a county at a minimum, preferably a city/town. What exactly is it you are looking for in an investment property? How are you funding the deal and understand the pros and cons to this? Happy to assist guiding you on this.

Theresa Harris · Answer

Property taxes of $1K especially on a $300-400K property is pretty good where I am.  I'd expect to pay double that in one area where I invest and triple in another.

Decide what type of home you want (single family, duplex, etc) and then look at good locations (ie family areas, lower turnover) and start running the numbers.  I'd look for at least a 2 bed, 2 bath, ideally 3 beds, 2 baths.

Devin Peterson · Answer

What is your strategy? Do you know your market well? It all depends on a myriad of compensating factors.

Alecia Loveless · Answer

@Tom Hall To find investment properties I’ve located my target markets and then I follow the MLS obsessively every day for any new listings. I do drive around those neighborhoods some to see if there’s any properties I want to contact the owner directly to try to find an off market sale on.

I’ve been finding that my best deals lately have been the value add ones, either those needing repairs or those being mismanaged.

The mismanaged ones have proven to be more difficult for me because all of my tenants have been so great to work with and the ones in the mismanaged properties have been allowed to run amuck for long periods of time and give push back once there’s rules and expectations in place and tend to become more needy as they try to figure out their new position on the totem pole. For me these have been slightly larger buildings, 5+ units so it didn’t make sense to just evict everyone and start over leaving me with no income starting out.

The deals needing repairs are generally easier for me because I have a great team put together with a wonderful contractor who can get anything done. My only problem is that I can’t clone him. I could easily buy 5X the amount of properties if they became available if my contractor was available to work on more than 2 at a time.

Basit Siddiqi · Answer

I look to purchase in an area that is cash-flow positive and has a positive population growth outlook.

Tom Hall · Answer

it is more like buy and hold. In todays market it is impossible to have cash flow so i am not hoping for that. I am seeing some properties in Sayrevelle NJ or near it.  I found this neighborhood somehow close to the city and affordable. However I am worried if the value ever  goes up more then 5-6% per year. Considering property taxes is almost 1k i don't think there will be a lot of people interested in purchasing property there, but that's the case in whole NJ.I don't own a primary, recently sold a property and would like to invest back in real state

how to search for an investment property?

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