hard time choosing the right area for multiunit in NJ :(

16 Replies

I am a new investor, very motivated by all of the podcasts on bigger pockets and of course wanting to get much more involved with meeting members and being more active. I am currently actively searching for a multi unit in NJ. It seems that anything I find ends up being sold to offers that are at least 2-3x the asking price. Very frustrating. I was initially looking in Newark area. Now I am thinking maybe Tom’s River or a more rent stable area but I’m afraid it may not rent as fast as Newark. So I’m not sure what to do?

I wouldn't go down to Toms River. It's a dead market in the winter.

Personally, I'm eyeing Dover, NJ right now. Properties are cheap (for NJ) and I believe the expansion happening in Parsippany right now will lead to higher property values in surrounding area.

Originally posted by @Andrew B. :

I wouldn't go down to Toms River. It's a dead market in the winter.

Personally, I'm eyeing Dover, NJ right now. Properties are cheap (for NJ) and I believe the expansion happening in Parsippany right now will lead to higher property values in surrounding area.

Thanks Andrew, we love parsippany for summer getaways, I will check it out for sure

 

Definitely agree with everyone on the Tom's River investment. Newark, the Oranges, Montclair (watch out for high taxes in Essex), Jersey City, Union City, North Bergen-those are some of the hot spots. I'm not sure about 2-3x asking, but these will go fast. Key is to get in to look right away and make a strong offer. Look at properties listed a little below what you can afford so you have the flexibility to bid higher and stay with the competition.

@Tamir Nachum Couple times a month we have people post saying how frustrating the area is, myself included. You need more than motivation. Patience, networking and education and more patience. Look back thru some of the older threads within the last year to get an understanding on how other people's frustrations are being echoed. Good luck!

Originally posted by @Jessica Zolotorofe :

Definitely agree with everyone on the Tom's River investment. Newark, the Oranges, Montclair (watch out for high taxes in Essex), Jersey City, Union City, North Bergen-those are some of the hot spots. I'm not sure about 2-3x asking, but these will go fast. Key is to get in to look right away and make a strong offer. Look at properties listed a little below what you can afford so you have the flexibility to bid higher and stay with the competition. 

Thanks for the advice Jessica, in this particular strong market the offers will definitely have to be stronger

I guess that’s a good thing

 

Originally posted by @Mark F. :

@Tamir Nachum Couple times a month we have people post saying how frustrating the area is, myself included. You need more than motivation. Patience, networking and education and more patience. Look back thru some of the older threads within the last year to get an understanding on how other people's frustrations are being echoed. Good luck!

Hi Mark

I agree with you. How do you suggest I get more education and Networking? Anything more specific? 

@Tamir Nachum Outside of the forums, reading the books everyone recommends, podcasts, going to RE meetups in our area, and networking, not really.

The biggest area lately I've gained knowledge and education from was finding my current realtor. He's passed on to me a lot of good information since my offer has been accepted. The caveat to that being I've learned the most since I've been in the process of closing on my first duplex. So the old adage is true, find someone who's more successful than you and try and latch on. Get to the meetups. Be ready to go through 5 or so realtors as most are not investor friendly. 

Originally posted by @David Wrenn :

Check out the "Botany Village" area of Clifton.  You can still get in at reasonable prices and don't have to pay Essex County taxes.

Yeah but you'll have to pay Passaic County taxes which aren't cheap!

 

Tamir, congrats on taking the first step, which was realizing you want to become a real estate investor. To add to what others have written here, I would also recommend narrowing down your scope a bit by tightening your criteria. That should help improve your focus and reduce frustration. If you cast too wide a net, you'll just get pulled all over the place. I suggest trying to narrow your search down to just a few markets (cities), having a max price point, etc. And if you're looking in markets where everything gets sold way above asking, perhaps you're looking in the wrong markets.

Also, your approach would differ if you're looking for a purely investment property (to buy and rent), or one to "house hack" (live+rent).  

Another important consideration:  Have you been pre-qualified yet?

Originally posted by @Max Vishnev :

Tamir, congrats on taking the first step, which was realizing you want to become a real estate investor.  To add to what others have written here, I would also recommend narrowing down your scope a bit by tightening your criteria.  That should help improve your focus and reduce frustration.  If you cast too wide a net, you'll just get pulled all over the place.  I suggest trying to narrow your search down to just a few markets (cities), having a max price point, etc.  And if you're looking in markets where everything gets sold way above asking, perhaps you're looking in the wrong markets.  

Also, your approach would differ if you're looking for a purely investment property (to buy and rent), or one to "house hack" (live+rent).  

Another important consideration:  Have you been pre-qualified yet?

Hi Max

I’m working with an Investor, yes

 

@Tamir Nachum  

Im a investor in Newark and Irvington, and I def understand your frustration. my conclusion is the market is alil bit crazy hot over there and people out bidding themselves out of profit, just go to the essex county auction and you'll see how many houses are back on the auction block being forclosed on by hard money lenders. I personally only deal with flips in the area and with newark anything is possible from window break ins to stolen copper pipes that you just placed 2 weeks ago. so i like to leave atleast 50 to 75k profit on a property and finding that right now is extremely hard but yet possible. 

Toms river, how ever is a much better area in my opinion because u can do a flip from december to jun which is pretty much the average time on a flip anyways about 6 months and hit the hot summer market and sell within a day or 2 

Granted all of my flips in newark would sell in 1 day, 10k to 15k over asking no matter what the season is but in my opinion those days are over very shortly. and trust me u don't want to own a house in newark (certain parts) vacant for very long.

Also being a contractor and investor i heard some horror stories in Newark with people renting.  I think for the same 200k youll be spending on a newark multi-family your better of looking into woodbridge,perth amboy,clifton ,toms river.  just make sure your taxes are good and you still cash flow positive.

Newark 2016 id tell you to buy all day long, Usually i was paying around 30k to 55k for what ever home i wanted multi or single now same homes going for 145k to 210k. (MIND BLOWING THING IS, PEOPLE ARE STILL BUYING)

Originally posted by @Hanna Ryeng-Pezzillo :

@Tamir Nachum 

Im a investor in Newark and Irvington, and I def understand your frustration. my conclusion is the market is alil bit crazy hot over there and people out bidding themselves out of profit, just go to the essex county auction and you'll see how many houses are back on the auction block being forclosed on by hard money lenders. I personally only deal with flips in the area and with newark anything is possible from window break ins to stolen copper pipes that you just placed 2 weeks ago. so i like to leave atleast 50 to 75k profit on a property and finding that right now is extremely hard but yet possible. 

Toms river, how ever is a much better area in my opinion because u can do a flip from december to jun which is pretty much the average time on a flip anyways about 6 months and hit the hot summer market and sell within a day or 2 

Granted all of my flips in newark would sell in 1 day, 10k to 15k over asking no matter what the season is but in my opinion those days are over very shortly. and trust me u don't want to own a house in newark (certain parts) vacant for very long.

Also being a contractor and investor i heard some horror stories in Newark with people renting.  I think for the same 200k youll be spending on a newark multi-family your better of looking into woodbridge,perth amboy,clifton ,toms river.  just make sure your taxes are good and you still cash flow positive.

Newark 2016 id tell you to buy all day long, Usually i was paying around 30k to 55k for what ever home i wanted multi or single now same homes going for 145k to 210k. (MIND BLOWING THING IS, PEOPLE ARE STILL BUYING)

Wow, this is an extremely detailed thread, thank you  I love the honesty and I can’t believe prices were that low  I have to do more research because I really want a nice area where my tenants will enjoy living for a long time and I know jersey has plenty of that,  I want to rent for the long haul. So I have gotten a lot of advice as far as location from different people and I have to keep doing my research and inquiring  

Thank for the time and detailed post!