Multifamily Properties in Southern NJ (Camden, Gloucester, Burlington Counties)
Collingswood, NJ · Member since 2013 · 29 posts · 17 votes
Has anyone bought (within the last year or so) a multi family ( triplex - quad) property in the Camden, Burlington, Gloucester counties of southern NJ?
I'm looking to acquire but as a newbie to the market and the area (been here about a year) - the inventory of available small multi family homes seems pretty sparse.
I haven't but perhaps @darren
@Darren Sager or @Steve Wilcox have
Hello Lafontant,
We have bought two multifamilies in southern NJ in the past year.
As you said, the market isn't very big, and a lot of that has to do with that current landlords don't want to let go of what they've got. Even if the rent is lower than market rates and they're not managing it properly, they tend to make money in the long run, especially if the mortgage is paid of. So that makes it harder for people like you and I, who want to buy smaller multifamilies.
But there are deals out there, and the best thing about buying in urban southern NJ is that you often get properties that have maintenance issues and have below market rent. That sends up red flags for most people, but I see deals.
For example, in our of our properties, we've raised rental income by about 20%. We accomplished this by raising rent on current tenants (it's still below market) and improving units as they became vacant. There's still room to go higher in rent, and we we able to get discounts for deferred maintenance.
As for larger apartment complexes, those do come on sale as well. We've shied away from those until now, because southern NJ isn't always friendly to bigger landlords. There are tons of little fees and regulations that accumulate and drive up expenses/time commitments. It's not that it's a bad idea, you just need to have a pretty good team in place well before going into a deal like that, and smaller multifamilies is a great way to do that. In fact, Collingswood is a pretty good area for small multifams. Ours are about five minutes from Collingswood and are dramatically affected by goings-on there.
Browsing Zillow/Trulia is a reasonable way of finding small multifamilies, we found one of ours through Zillow and the other through our RE agent. If you want, I can send you his contact information.
In fact, if you do want to get into a bigger multifamily, perhaps we can work together. It would be great to have a professionally managed 20+ unit building that brings in money. It seems like being a slumlord is not something you're going to do, so it's great that we're on the same page with that.
By the way, be very, very careful about buying properties in Camden city. It's still a warzone. There is talk about gentrification in the area, and it might be starting to happen, but at the moment, the risk factor is off the charts, and we're not getting into it at all.
@Account Closed
Thank you for the response. PM me your contact information. I work in Philadelphia...perhaps we could grab lunch or coffee.
Yes - my end goal is to provide quality housing to working class families. I won't get on my spill about the shrinking middle class, but this is something I'm passionate about and would like to earn money. Also re: Camden - I'm not afraid of a war zone as I spent time living in Newark NJ and despite it, still graduated, obtain bachelor's and master's degrees - so I'm always a bit sensitive when people describe cities as a "war zone" . But I definitely understand there are some pretty bad parts of Camden. And I would NOT want to put a family that want's to provide quality housing to their children in a war zone, however if it is a safe area (even if it is low income or working class) but safe. Then those areas I am comfortable with.
To your point - I definitely would not be a slumlord - as it's very important to me to be an agent of change to help turn around communities or stabilize them at least.
The truth is that I now live and work in Florida, however the rest of my team is firmly within Jersey.
As for Camden, there are some decent areas, I suppose, but in general, I don't feel safe in the city. I have driven through it several times and there are only a couple of areas that I feel okay with getting out of the car in. I'm still skeptical of investing here, because that a property is located in Camden is a huge red flag to many people in the SJ area. It's just got a huge stigma, even if the particular part of the city is okay.
I'm more than happy with sticking to the Jersey side of the greater Philadelphia metropolitan area. I've also looked into expanding into Philadelphia proper recently (lots of gentrification going on near Temple) so there are definitely possibilities in SJ and PHL itself.
As far as turning around communities go, I'm mostly in this game for the money, but I think there's a lot to be said for my strategy... buy somewhat neglected properties from somewhat neglectful owners, do some rehabilitation and rent increase, treat tenants with respect (but be firm with rules/late fees) and that's sure to do a lot for the general health of a community.
Makes sense Ajay. That's the key in the beginning is to make sure I align with investors who share a similar sense of purpose as me (triple bottom line impact). Socially responsibile investing that is profitable but not SOLELY focused on the money.
In past business ventures I've had to turn away investors who only pushed for higher returns . I do want a good return on my investments, but if there's a way that I could shave a few basis points or percentage points off my return (so that it is still profitable) AND I have a positive impact on a family, community,...then I'm more than willing to do so.
I understand it limits my potential partnerships but after going to b-school with a bunch of folks who were solely focused on maximizing shareholder profits at all costs... ehhh I'll pass. That's not me.
So I've been searching for individuals who have a true passion for turning around working class communities or at least stabilizing them. IF they don't, then I probably shouldn't partner with them because there may come a point where we diverge on our business strategy.