Buy & hold investing in NJ impossible? Anyone from NJ investing outside of the state?

44 Replies

Hey Everyone!

I have been actively listening and learning on bigger pockets for about 6 months. Since then i have been looking for buy & hold properties in my state of New Jersey AKA Dirty Jerz lol

After running a ton of numbers on hundreds of properties it is really hard to find a cash flowing property because taxes and home values are soooooo high!

Anyone from NJ investing in NJ for buy and hold or any of our neighboring states like PA or CT?

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*reasonably

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NJ can be quite lucrative.  Finding deals is far from impossible.  The biggest issue is that NJ has a higher barrier to entry than most areas and to me that's good.  Keeps those who want but can't out of the market.   

There are many people that I know of investing up here in buy and holds in the Hartford County Connecticut area that come from NY and NJ.

Look in cities, not a town like Sparta.  Cash flow ~poor neighborhoods.   Capital gains ~pricey homes.

Sparta is my primary residence not where i am looking to invest.

But i have been looking in Newark, Elizabeth, linden, Jersey city, fort lee, weehawken, union city but taxes are crazy. Might find a decent price on the property but barely makes financial sense because the taxes are so high. 

@Mike Moreken

I don't think you'll find much cash flow opportunities in Ft Lee, but the 1st 4 cities you mentioned should have plenty of available opportunities for buy and hold.  (Newark, Elizabeth, Linden, Jersey City)

Like others have said, if you want to cash flow you have to look at poorer neighborhoods. If you want appreciation then look where home values are very strong. A poor town near you would be Dover. 

@Mike Moreken

I have looked at Paterson it is definitly a rougher area in many parts but is probably on par with place like Newark. 

Originally posted by @Brian Fernandes :

Hey Everyone!

I have been actively listening and learning on bigger pockets for about 6 months. Since then i have been looking for buy & hold properties in my state of New Jersey AKA Dirty Jerz lol

After running a ton of numbers on hundreds of properties it is really hard to find a cash flowing property because taxes and home values are soooooo high!

Anyone from NJ investing in NJ for buy and hold or any of our neighboring states like PA or CT?

 I wouldn't say its impossible. I grew up in NJ, and my parents have been very successful with rentals there. They didn't read a single real estate book or spend a second on an internet forum, either. You are just at the peak of the market, which makes it a lot trickier.

@Darren Sager

 Thats interesting, so you're saying since nj prices, taxes, etc are high in general, the little guy even though they want to cant break into RE game easily.  I guess that's true but I never thought of it like that.

Any advice to break the barrier?  

Hey Brian, in my opinion I see a lot of the buy and hold guys buying in the following areas...

Jersey City, West New York, Paterson, Newark, Plainfield, Elizabeth

With the exception of Hudson County where foreign money is outbidding the smaller guys, there's still plenty of cash flow opportunities in the other areas. 

I live in NJ and I couldnt find a good deal to start. Not even in a cheap area. I ended up buying in PA. Now that I have more experience I am starting to find NJ a bit more attractive, since the rents are slightly higher than PA.

May be one option especially in north nj near NYC area is to try airbnb. More work but potentially more reward.

Hey Rafael,

Thanks for the response.

How is investing in PA working out for you? Do you see decent cash flow?

And what areas did you invest in?

Cheers,

Brian 

@Rafael Floresta

It has been good. But what is good for me, might not be good for you.  I invest in lower end neighborhoods. The average property cost, after repair, 70k. It rents for 1k, tax and insurance for about 300, and mortgage around 300. 

I built in PM costs, but I self manage. I get around 300 cashflow per property, not counting capex in the future.

I usually buy them distressed, and put new roof and WH, most of the time either a kitchen or a bathroom. Every house is a different story. 

I personally don't own property here but I do work for a gentleman in the Atlantic City area and he now has 9 buildings totalling 25 units. I found out his strategy is to buy either short sale, foreclosure or any deeply discounted property. He only buys 2-4 unit buildings never a single family. He the rents them to mostly welfare individuals getting Temporary Rental Assistance (TRA) through the state, it pays 100% of the rent including  the deposit.  He is about to buy 2 more buildings and recently quit his casino job. By the way he is one of the few people I saw that did not lose a single property during the market crash in 2008-2009.

So NJ does have  but and hold deals. Try not to look at certain areas an  get turned off, but the low income areas are lower in taxes and full of renters, also think outside the box, you'll do fine. Give me a holler if you want further insight so 0791Wilson'[email protected]

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@Brian Fernandes There are plenty of REAs in NJ to go to which can give you a better understanding of what comes with investing in different areas, especially the lower entry NJ areas. I personally don't invest in Newark or Patterson, but know of plenty of people do so very well there. It all depends on your risk tolerance and how well you manage it.

I do invest in cash flowing properties in PA and did so because of the funds I had to start with. Over there, I had a great contact who had already established the area and lenders. We have a regular occurring meetup in the Wilkes Barre area if interested.

@Rafael Floresta What area are you investing in PA? You're more than welcome to come our meetup. Love to learn about your area as well.

@Rafael Norat I invest in Delaware County, PA (the name is confusing, it is actually PA, no DE). It is a hike to go to a meetup. 2 hours for me. 

I met a realtor at a SJREIA meetup who said she refuses to buy and hold in NJ.  She only landlords in Philly.  We are down in Gloucester/Camden County area so luckily Philly is only a 15 min ride over the bridge.  I am currently trying to raise capital through a flip or two in NJ to eventually buy and hold.  Not sure which side of the river the buy and hold will be on.  @Rafael Floresta have you changed your marketing in NJ to find properties that will cash flow better than your PA properties?

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