Rental Property Investor · New York, NY · Member since 2016 · 11 posts · 2 votes
Hi all, here it goes.
I currently work in NYC and it has been my dream to invest in an area where I can commute into work and live in part of the duplex. The only close to practical scenarios that I have found are in Nassau County and Jersey City- Journal Square specifically. Of course, I would leverage an FHA loan but unfortunately I was not able to make the numbers work/did not want the taxes to crush my bottom line and so ultimately I looked to Raleigh NC for my first investment where I now have a turnkey property.
As I continue to look at the numbers in these areas, under the assumption that both units would be rented out so that I can have an accurate perspective of the profitability, it seems that in all cases I can not even break even. My question is this, does anyone know of a situation/individual that was able to invest in Nassau County or Journal Square for an entry price of under 350K where they are able to breakeven/generate a cash flow?
I have done my due diligence, but would love to hear any perspectives concerning anyone who has invested in the area, is in a similar situation, or can simply speak to these areas.
Contractor · 08234 · Member since 2016 · 253 posts · 178 votes
10y
Hi Tom,
Nice to meet you! Do you plan to drive to the city or another way? Because if you come a little further down in Jersey to Burlington county you start running into deals that can work. And the Hamilton train station is pretty close which goes right to New York Penn Station.
Let me know your thoughts,
William Lees Jr
Keller Williams Realty
Flipper/Rehabber · Jersey City, NJ · Member since 2012 · 204 posts · 109 votes
10y
@Tom Volpe - I can't speak to Nassau County, but I know that it can be done in this neck of the woods. "Journal Square" is a pretty loose term -- it's not always a quick stroll to the PATH. In some cases, it's a 15-20 minute walk because there's only so much inventory in close proximity to the PATH.
In most circumstances, it requires some work on the buyer's part -- buying a 2-, 3-, or 4-family, and renovating the units to increase rents. If you're left with a 2-bedroom unit for yourself, it'll only help your cause to rent out that bedroom, too, though the lender can't count that income.
One of the biggest issues I've seen around here is that there are so many buyers like yourself looking to purchase a small multi near the PATH (or even near a Light Rail station). In addition to that, there's significant investor demand. Often, sellers will take $15k or $20k less than the highest offer (usually FHA) in favor of an all-cash offer from an investor. Definitely makes it more difficult to break in here.
For a turnkey property that's renovated and rented out, you'll be hard pressed to find something in your price range if you're set on Journal Square. If you're open to something near a Light Rail station (from which you could connect to the PATH), I may have some other recommendations for you that are a bit more attainable. Best of luck!
Rental Property Investor · New York, NY · Member since 2016 · 11 posts · 2 votes
10y
@Ryan Goldfarb that was beyond helpful. Thank you for taking the time to answer that as complete as you did. It is no surprise that other investors are looking for this exact situation, and that sellers are more interested in all cash offers. To that point, I would be interested in multi-families that are near the PATH train. I am not limited to only duplexes, more so in the Nassau comparison just because of affordability.
Are you familiar with the entry prices into this market? Say multi families, with a 5-15 minute walk from the PATH train?
Rental Property Investor · New York, NY · Member since 2016 · 11 posts · 2 votes
10y
@Account Closed I would not be driving into the city, as parking isn't all that practical and a fortune! For times sake I probably would not look too much further then outside of Journal Square as any flexibility would be proximity from the path train.
Investor · Huntsville, AL · Member since 2015 · 149 posts · 80 votes
10y
@Tom Volpe....just to clarify, you are looking for a duplex in nassau to live in, or to rent out both units? It kind of seemed like you said both and I do not want to give you an ill informed answer
Rental Property Investor · New York, NY · Member since 2016 · 11 posts · 2 votes
10y
@Chris Mignone Looking back I certainly could have been more clear, apologies on that. Any investment will be owner occupied. I fully plan on moving in and utilizing an FHA loan for purchase.
Flipper/Rehabber · Jersey City, NJ · Member since 2012 · 204 posts · 109 votes
10y
My pleasure, @Tom Volpe. I saw this property hit the market the other day at $559k. Decent sized 2-family home that's a short walk to JSQ. At that number, though, your cash flow is almost certain to be negative.
If you look at the PATH map, the stops that precede JSQ are Hoboken, Newport, Exchange Place, and Grove Street. Real estate prices at each of those stops are astronomical, so it's natural that it would begin to gravitate toward the next target, especially with all the large scale development in the pipeline for the area. Journal Squared has topped off already and will be completed within the next year or so. As such, people looking to buy homes are faced with the choice of a 2-bedroom condo in Hoboken or Downtown JC versus a more spacious 2-family in a rapidly developing area like Journal Square at the same $550k price point, and, many would claim there's more room for appreciation in that 2-family home than the condo.
In my opinion, this is the dynamic driving the hype around Journal Square. Those who don't buy the hype -- or at least want to temper expectations -- would argue that much of the "upside" is already priced into Journal Square listings these days.
I am looking to do the same thing but having a tough time finding a place where the numbers work. I also recommend that you look a little farther out on the Path train or Light Rail. Prices are just too high to make sense with walking distance of the closer Path train stops. Would love to connect and share thoughts