New Jersey Real Estate

21 Replies

I am new to real estate, After doing some research, I’ve been wanting to jump in head first. However, I have seen things that turn me off such as NJ having the most foreclosures in the nation. Also, NJ leads the nation in property taxes and are expected to go up. I would like some insight. What are NJ investors doing to make up for these bumps on the road? What’s the hottest type of real estate in NJ ? (Rentals, flips, buy/hold)

I don’t have any issues here. It is a tenant friendly state if you are doing rentals, but if you properly screen them up front you should not have too many issues in that department. I have always used 25/40 debt to income ratios. Taxes are high but rents are also high as well. There are tons of opportunities all over the state. I started investing by focusing on the markets close to my house. We have done well here.

If you don’t own anything consider starting by buying a fixer upper duplex. It will give you money to offset your mortgage payment. You will also have the opportunity to increase the value by renovating the units and raising rents. FHA you can qualify for up to a four family.

Good luck.

If you are interested in flipping houses, the fact that NJ has the highest number of foreclosures in the country is a good thing, there are many vacant and distressed (read: cheap to purchase!) properties still available in NJ, some have been vacant for ten years (since the recession) and are just coming to market now. Or you could rehab one and keep it as a rental, BRRRR method. Yes, property taxes are high, the market is pretty flat for high end properties now, they seem to have hit a ceiling price wise. More people move out of NJ every year than move into it b/c of taxes, traffic, other factors. So the rental market may be stronger than the homebuyer market in some areas, especially anywhere with commuter lines to NYC (bus, train).

Originally posted by @Mike P. :

What is the 25/40 ratio, and where in jersey if I may ask are you buying ?

Looking to purchase in the Camden county area.

Originally posted by @Gary Mawson :

I don’t have any issues here. It is a tenant friendly state if you are doing rentals, but if you properly screen them up front you should not have too many issues in that department. I have always used 25/40 debt to income ratios. Taxes are high but rents are also high as well. There are tons of opportunities all over the state. I started investing by focusing on the markets close to my house. We have done well here.

If you don't own anything consider starting by buying a fixer upper duplex. It will give you money to offset your mortgage payment. You will also have the opportunity to increase the value by renovating the units and raising rents. FHA you can qualify for up to a four family.

Good luck.

 Thanks for the feedback! I'm looking into to this now! What county did you get started with? Do you recommend going into a deal a management company?

I am in Passaic county doing a house hack, and not currently using a property manager. Im thinking of investing in PA taxes are way to high here !

@Mike P. 25% is rent to monthly income. 40% is total debt including rent divided in monthly income. If they don’t have any debt I’ll make some small concession if 25% is higher. It is just a good place to start.

Luis Camden county has a lot of opportunity. There are a lot of investors there too. Camden specifically along the waterfront neighborhoods are going to have some upside over the long term if you are willing to hold onto it and it cash flows.

I am in Monmouth county, but I don’t think that it matters where you are. There are opportunities in every town as long as you buy the property right.

Originally posted by @Mike P. :

is Camden a safe area? I use to hear it was pretty rough!

Just closed on a 2 unit and a single in Camden (with a client of mine) ... it can certainly have it's rough sections ... and like any area in any town, one street to the next can be a considerable difference. If you are going to invest there I'd advise you to get to know the area really well. I grew up in a rough town so I will go (stupidly) just about anywhere. But I confess there were some tense moments here and there. Stories for another day. :) 

Originally posted by @Jennifer Petrillo :

If you are interested in flipping houses, the fact that NJ has the highest number of foreclosures in the country is a good thing, there are many vacant and distressed (read: cheap to purchase!) properties still available in NJ, some have been vacant for ten years (since the recession) and are just coming to market now. Or you could rehab one and keep it as a rental, BRRRR method. Yes, property taxes are high, the market is pretty flat for high end properties now, they seem to have hit a ceiling price wise. More people move out of NJ every year than move into it b/c of taxes, traffic, other factors. So the rental market may be stronger than the homebuyer market in some areas, especially anywhere with commuter lines to NYC (bus, train).

Excellent point! The BRRRR method sounds fantastic. Have you had any success with this formula?

Hello Luis,

I'm from Mercer County and there are plenty of opportunities all over the state.  The slow foreclosure process is yielding quite a bit of opportunity for us investors.  And that's not going anywhere any time soon so rest assured if you are in that side of the business you'll have plenty of inventory.  My company is doing well with auction properties.  I could go on and on lol but in Camden County there are plenty of auction properties that become great deals for the patient investor.

I own 7 properties in Mercer Co. Trenton is cheap and has great cash flow but little if any capital appreciation. There are areas of Trenton I would buy in every day and others where I stay away from. Other areas of Mercer Co such as Princeton are too expensive for buy and hold properties. Terms determine cash flow and whether a deal is good or not. Try for seller financing or private money with terms that work.

Good luck

Originally posted by @Stephen Kappre :
Originally posted by @Mike Parietti:

is Camden a safe area? I use to hear it was pretty rough!

Just closed on a 2 unit and a single in Camden (with a client of mine) ... it can certainly have it's rough sections ... and like any area in any town, one street to the next can be a considerable difference. If you are going to invest there I'd advise you to get to know the area really well. I grew up in a rough town so I will go (stupidly) just about anywhere. But I confess there were some tense moments here and there. Stories for another day. :) 

 We'll have to discuss this a bit more at one of the upcoming South Jersey meetups.

@Luis Valdez I have seen clients find success with the Camden City market, and Camden County in general.  While NJ is a tenant-friendly state it is not difficult to get a non-paying tenant evicted.  One of my clients in Camden is aggressive at evicting non-paying tenants and usually can find a new tenant within two weeks of the eviction being completed.  With the large amount of construction happening in Camden the property values could see a decent rise in the near future.  As @Stephen Kappre  said it is important to know exactly where you are buying in Camden as it can be a rough area.

Feel free to contact me with any other questions on the area. 

I don’t have a property manager, per se. I have a general contractor. My tenants know to call him, not me, with a maintenance issue. I collect my own rents. My tenants go to the bank and deposit it themselves.

Originally posted by @James Masotti :
Originally posted by @Stephen Kappre:
Originally posted by @Mike Parietti:

is Camden a safe area? I use to hear it was pretty rough!

Just closed on a 2 unit and a single in Camden (with a client of mine) ... it can certainly have it's rough sections ... and like any area in any town, one street to the next can be a considerable difference. If you are going to invest there I'd advise you to get to know the area really well. I grew up in a rough town so I will go (stupidly) just about anywhere. But I confess there were some tense moments here and there. Stories for another day. :) 

 We'll have to discuss this a bit more at one of the upcoming South Jersey meetups.

 Hey James, when & where is the next meetup?

Originally posted by @Jonathan Herron :

@Luis Valdez I have seen clients find success with the Camden City market, and Camden County in general.  While NJ is a tenant-friendly state it is not difficult to get a non-paying tenant evicted.  One of my clients in Camden is aggressive at evicting non-paying tenants and usually can find a new tenant within two weeks of the eviction being completed.  With the large amount of construction happening in Camden the property values could see a decent rise in the near future.  As @Stephen Kappre  said it is important to know exactly where you are buying in Camden as it can be a rough area.

Feel free to contact me with any other questions on the area. 

Thank you @Jonathan for your feedback, are there any available multifamily units that are up and coming?

Originally posted by @Luis Valdez :
Originally posted by @James Masotti:
Originally posted by @Stephen Kappre:
Originally posted by @Mike Parietti:

is Camden a safe area? I use to hear it was pretty rough!

Just closed on a 2 unit and a single in Camden (with a client of mine) ... it can certainly have it's rough sections ... and like any area in any town, one street to the next can be a considerable difference. If you are going to invest there I'd advise you to get to know the area really well. I grew up in a rough town so I will go (stupidly) just about anywhere. But I confess there were some tense moments here and there. Stories for another day. :) 

 We'll have to discuss this a bit more at one of the upcoming South Jersey meetups.

 Hey James, when & where is the next meetup?

 Send a message to @Justin Eaton and ask to be added to his mailing list so that you get notified. He'll also post it in the events section on BP as well as on the meetup.com group we have setup.