REI in New Jersey?

Question

Hey all,

Newbie here.

I’ve been renting since college, but now that I have some cash saved I think it’s time to start building equity (and stop throwing away $7k a year). My goal is to purchase my first property within the next year or so. I am pre-qualified for an FHA loan.

Goals:

• Supplemental income
• Eventually growing to a retirement plan

Positives:

• Excellent credit: ~800
• Zero debt – no student loans or long-term credit card
• Able to save ~$1000 per month
• Nearby universities, cities, and beach towns make properties more rentable (?)
• Room to grow in company/career

Issues:

• Little investment capital (~$20k)
• New Jersey’s relatively expensive real estate market, especially Monmouth county
• Yet to purchase primary residence
• Salary not the highest - only 2 years into career

My Plan:

I’m looking for at least a 3 bed, 1.5+ bath single family (or multi- but they seem scarce around here) home in the high $100s (low $200s would be pushing it) range in the Monmouth County areaof New Jersey.  I can afford ~$1,400 monthly payment (including everything) on my own.  I plan to rent out the two (or more) rooms to help pay the mortgage/expenses.  My plan is to build equity in that house until I can afford to buy another investment property and continue to rent out the first property. Time will tell from there.

Any advice for me as to narrow my search area (i.e., what to look for in a neighborhood)? My criteria are pretty vague.

Any recommendations for local mentors/realtors?

Thanks a lot!

Account Closed · Answer

I've always believed that investing.  In real estate is one of the best ways to build wealth.  I've been an investor since my 20s and now as a real estate agent working with investors there are opportunities out there for everybody.

Your price range is somewhat limiting however that really depends on the towns you're willing to live in and making sure you choose the property that rents easy. When using an FHA loan you'll get beaten out by cash buyers pretty frequently, unfortunately. I don't want to be Debbie downer but you would need to look into town that aren't so competitive.

This is more of a conversation and I'd be happy to have that with you just give me a call. 301-655-3122

Mark Scarola · Answer

It's not a bad idea in theory, but there are some things to consider. For instance, do you want to have roommates if you can't get a multifamily (especially if you plan to stay down the shore)? As you get older you might be less likely to say yes. If you're the landlord you might not want your tenants in the next room either.

You could potentially flip a few properties to build up some cash and then use that to purchase a buy and hold property. You could also buy a property that needs only minor work and live in it yourself. Then do the repairs, have a place to live for a few years, then sell for a profit and move on. Of course there's always the option of partnering with someone to make your cash go further.

​REI in New Jersey?

REI in New Jersey?