Brooklyn, NY · Member since 2016 · 74 posts · 15 votes
Hello BP....I'm looking to purchase property in Newark, NJ...I'm from NYC so for me, this is right next door. Can anyone let me know what neighborhoods to stay away from? Thanks.
Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
9y
Ugh. More blind leading the blind on Newark again.
At least @Account Closed and I can agree on one thing, he's one of the few that recommends investing there. Highly disagree that when it comes to buy and holds it's great. If you have experience in Newark it will help, but anyone coming and investing there as their first time I don't believe it's a good option. You need to be weathered a bit before venturing into this space.
I've asked an attorney to confirm that rent control in Newark controls all rentals, including 2 family and single family homes. Waiting a response.
Houston, TX · Member since 2016 · 7 posts · 2 votes
9y
as for Newark NJ, I have an Apartment in Newark (am currently in Newark as we speak) it depends what you want. You want working professionals who work in Financial District, Lower/mid class families, or straight up ghetto. There is money to be made here. I'd check out Harrison first. Then the iron bound section or close to downtown. Avoid anything west of Mccarter Highway. That's all still very ghetto.
Acquisition Manger · New York, NY · Member since 2016 · 23 posts · 15 votes
9y
@Account Closed would you say you have lost interest in investing in Queens, NY all together or just focused on less saturated areas currently ? I'm actively seeking deals in Queens and maybe its my greenness when it comes to being a REI but I'm optimistic about finding a few deals in this market soon with the actions I've taken.
Rental Property Investor · Ramapo, NY · Member since 2016 · 243 posts · 108 votes
9y
@Allyssa Compton, sounds great, thanks for the tip and I'll let you know. I knew it was a Hispanic neighborhood. No hablo español but it might be easy for me to learn as I do speak French. Could be a good 'edge' to have in the investing sphere :)
New Jersey, NJ · Member since 2015 · 327 posts · 137 votes
9y
Gilbert Joseph when I said saturated I mean by saturated investors competing against each other. There's just too many investors and rookies in NYC. The sellers here are much smarter when selling there homes than other markets that it does not leave much room for profit.
Aside from that, homes here are too high to consider buy and holds so the only options are flips and develops. Flips is much harder because everything here in NYC cost high in terms of renovation even if you manage it yourself. I'm lucky as a military veteran that Home Depot and lowes provides me with 10% off on all thier materials and store credit of $60k total with no interested 1-2 years so I was able to use that as advantage and just use my own money for the labor.
The list goes on but one incident that really woke me up was my last flip. In this Market NYC in queens or Brooklyn or Bronx there is ZERO room for errors. I made the perfect plan sheet and estimated this flip to take 6 months in and out and as a contractor I was positive it would work out. But when it was time to upgrade the electric meter, The electrical company coned took 8 months. I had no control over them and they play politics because it's a union job and they need to serve the millions other resident at turtle pace so I got stuck selling "for sale by owner" to save on commission due to the holding cost on the MLS and that 6 months took 16 months and only $15k profit.
You will here many investors with joy of owning units and 20 plus properties lol I laugh at that because of their market, try owning at least 4 free and clear in NYC by yourself and I will respect that. This is a millionaire market and to succeed at a normal pace you will need to come in with huge capital and experience. Others might suggest using hard money crooks which is great in thier market but not NYC cause one little error like neighbor calling 311, city stoping your work, sub contractors trying to steal from you or even your attorney being lazy to process your paperwork and etc cost time and money and NYC is not forgiving.
That's why I push for NYC investors to look for Newark or other cheap markets because a mistake there would cost you money but in NYC it will cost you time.
Time is more valuable than money.
Investor · Montclair, NJ · Member since 2016 · 1 post · 3 votes
9y
I noticed that several people from New York are interested in investing in Newark but have some concerns about sketchy neighborhoods, undependable tenants, etc. I moved to New Jersey from Dallas, TX 3 years ago and had the same fears. Surprisingly, I lucked up by running into a real estate investor at a barber shop who specializes in the Newark market. His team renovates whole neighborhoods by buying low, fully gutting and renovating, and selling turn key properties to other investors looking to hold for cash flow.
Long story short, I ended up buying a fully renovated three family that provides me with great returns. (12.5 CAP, 22% Cash on Cash). I was most worried about finding good tenants, but the sellers actually helped me get 3 section 8 tenants within 1 month of my purchase. 95% of my rent payments are covered by their vouchers, and so far, this model seems to be working great for other Newark investors I have come to know. I think Newark is great if you find people who know the area well.
@Taron Jackson and @Scott Pyrcz reach out if you want some good contacts that are experienced in the Newark market.
Acquisition Manger · New York, NY · Member since 2016 · 23 posts · 15 votes
9y
@Account Closed thank you for that in depth breakdown I understand and appreciate your points.
I am aiming to acquire a multi-family home in queens as my first property and house hacking it. I have thoroughly researched what to be aware of when using that method, what are your thoughts about this approach in a this market ?
New Jersey, NJ · Member since 2015 · 327 posts · 137 votes
9y
Gilbert Joseph house hacking is good, just need patience in this market. To find a multi family deal anywhere in queens that requires some work is $300k and up. Sellers know the market here all too well.
What most investors do, they purchase single family and just rent out the basement while taking their chances with city for having an illegal basement apartment. This is the New York way of house hacking.
Acquisition Manger · New York, NY · Member since 2016 · 23 posts · 15 votes
9y
@Account Closed thanks for the input, have been submitting offers and direct mailing for some time now so like you said I'm just being patient as well as persistent.
Realtor · Bayonne, NJ · Member since 2015 · 111 posts · 16 votes
9y
@Darren Sager spot on. In my opinion unless you live there and know Newark then stay out and invest in a market that you do know. Its best for beginners to buy something that they would actually live in.
Agent / Investor · Newark, NJ · Member since 2015 · 95 posts · 60 votes
9y
Over the pass 2 years I Have had a lot of calls from potential tenants from Brooklyn because they are being priced out of Bk ,I only deal with section 8 tenants so I turn them down
Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
9y
@Omar Ismael here's some of my feedback as to investing in Newark, taken directly off their website:
Q. WHAT IS THE RENT REGISTRY? A. Landlords are required to register with the Rent Control Office the amount of rent they receive from each tenant. This information is then available to the public for verification purposes in order to ensure that landlords are not raising rents more than permitted under the Rent Control Ordinance. B. If a landlord incorrectly registers the rent (e.g., if the landlord registers more rent than actually received from the tenant), the landlord is subject to a fine of up to $500 per instance. Until the landlord registers a tenants rent with the Rent Control Office, and is compliant with the Rent Control Ordinance, the landlord is not permitted to raise rent. Q.
WHAT DWELLINGS ARE EXEMPT FROM THE CITY OF NEWARK UNDER RENT CONTROL LAW? A. Existing owner-occupied one, two, three and four family dwellings are exempt from rent control. B. Substantially rehabilitated one through three family dwellings are exempt for five years (if they were previously vacant for 18 months) or one year (if occupied), and if the rehabilitation exceeds 50% of the dwelling’s value. (note: landlord must apply for and receive a certificate of exemption from the Rent Control Board). C. All newly constructed dwellings of four or more units are exempt from Rent Control for 30 years, as per State statue; however the Landlord must also apply for a certificate of exemption in order to verify their exemption status. D. All public housing is exempt from rent control.
So, to be clear, I called up the Rent control office and confirmed with them that all rental units in Newark, NJ where the landlord does not occupy the residence (up to 4 units) are covered by this ordinance. Single family, 2 family, it doesn't matter because: You have to register your rentals. You can't raise the rents a penny unless you do. And once you do the raise is based upon the CPI index and other factors. Even if you have Section 8, you're bound by the law.
Anyone advising you otherwise from what is stated in the law for Newark in my opinion is not giving the right information out. No names need to be mentioned.
I will say it again. Newark, NJ in my opinion is NOT the place for a first time investor to start their investing career. It's difficult to navigate through this law and hence why some long term investors I know have issue with the city. It can be a very good place to invest if you have years of experience and know the ins and outs of it (I really like the Ironbound section). But beware because either way you have to register your rentals and you have to abide by the rent control law.
Investor · Linden, NJ · Member since 2016 · 190 posts · 116 votes
9y
@Darren Sager i have to admit that i was totally oblivious to the new rent control law. I did know that i could no longer raise the rents 5% annually like in the past. With that said, i think the new rent control law is one of the least things to worry about when considering investing in Newark. This year i forgot to register again and they sent me an email as a reminder. I responded with the documents and that was it. i definitely WOULD NOT advise anyone to invest in newark but if the price and the neighborhood is right and you do have the temperament and patience, it can be a good starting point. I started in Newark and the lessons i learned were invaluable in my continued investing. Now when i buy in other towns, it is a piece of cake. Like i said earlier, i would not advise just anyone to invest in Newark unless they are aware it can be very challenging.
Rental Property Investor · Ramapo, NY · Member since 2016 · 243 posts · 108 votes
9y
@Omar Ismael are you seriously going to sell them all? You didn't know about the rent control law? Wow. My takeaway is I better make sure I research all the local laws before I buy anywhere.
Agent / Investor · Newark, NJ · Member since 2015 · 95 posts · 60 votes
9y
Moshe I love investing in Newark Nj, I am aware of these rent control rules , they don't affect my bottom line . I live and invest in Newark Nj . The ROI I am getting here would be very hard to get in another town . I am gonna be investing in Newark until the runs me out
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
9y
Anyone who paints a broad stroke against Newark either has no real experience living there, or is lying for the sake of getting a laugh.
Springfield and Irvine Turner hasnt been dangerous in at least 10 years (since Sharpe tore the projects down). And no city is all hood. Please stop lying about my city along with my fellow Newarkers Scott. Newark has a lot of good hard working people living in it.