Multi-Family Investment - NJ or Queens

Multi-Family and Apartment Investing
5yFollow

Multi-Family Investment - NJ or Queens

Ben Mathew
Member since 2021 · 2 posts · 2 votes

Hello Bigger Pockets Community. New to this site & multifamily investing. I am looking to purchase a 2-3 family home at around 650k -750k. Will not be house-hacking but looking to buy & hold. 

Current areas of interest at New Jersey (North Bergen, Union City, JC) or Queens. Would appreciate any feedback & recommendations on locations to narrow my search. Thanks!

1Reply
30 views

Most Popular Reply

Alexander Szikla
Real Estate Agent · New York City · Member since 2020 · 818 posts · 639 votes
5y

Why not house hack? You only need to live there for 1 year. 

If you can get a 4 unit and a basement, that would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield.

Personally, I am very bullish on New York and NYC itself. Sure it suffered due to COVID, but you want to buy when there is distress. I think all the folks who moved away are already getting bored and already coming back. Plus, the vaccine is getting rolled out which will curb the spread tremendously. Now is the time to buy. NJ by comparison is very pricey. 

I'm comparing yields for the record, not absolute dollars. 

Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. Nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.

Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.

If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!

3Reply
See this reply in the discussion

8 Replies

Jump to latestLatest
  • Aneury Evangelista
    Investor · New York City, NY · Member since 2017 · 27 posts · 15 votes
    5y

    Hi Ben and welcome! How about the Bronx? We've had some good luck there recently. 

    0Reply
  • Alexander Szikla
    Real Estate Agent · New York City · Member since 2020 · 818 posts · 639 votes
    5y

    Why not house hack? You only need to live there for 1 year. 

    If you can get a 4 unit and a basement, that would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield.

    Personally, I am very bullish on New York and NYC itself. Sure it suffered due to COVID, but you want to buy when there is distress. I think all the folks who moved away are already getting bored and already coming back. Plus, the vaccine is getting rolled out which will curb the spread tremendously. Now is the time to buy. NJ by comparison is very pricey. 

    I'm comparing yields for the record, not absolute dollars. 

    Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. Nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.

    Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.

    If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!

    3Reply
  • David Da Silva
    Real Estate Agent · Jersey City, NJ · Member since 2017 · 69 posts · 56 votes
    5y

    Hi Ben,

    I work heavily in Hudson county and specialize in multifamily investment properties (I invest there myself as well). Let me know if you need help with anything there.

    1Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    I would partition that amount and invest to BRRRR in Philadelphia instead. I am in Northern NJ and the number are not good on all investment rental right now. They are all priced at the top and the rents are comparatively low. If you can get near 1% in NJ, it's a miracle with the high taxes. I do like areas of Westchester and Long Island for what you want to do, but with 650-700k and you don't want to house hack, you could BRRRR three properties in Philly and potential pull windfall appreciation.

    [email protected]Podcast Guest on Show #667
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    1Reply
  • David Da Silva
    Real Estate Agent · Jersey City, NJ · Member since 2017 · 69 posts · 56 votes
    5y

    I would have to respectfully disagree with that input Johnathan.

    NJ does have high taxes, but the rentals are phenomenal in terms of income. I don't look at 1% or any % in terms of income, because that rules loses importance in more expensive properties (.9% of a 700k home is $6300 of monthly income).. 

    One of my rentals (2 Fam in North Bergen) is Bringing in $2500 per month in rental income per unit ($5000 total) with only $450k invested. The mortgage is only $2900 with PITI all in..

    Another of my properties in East Orange is bringing in a whopping $6k per mo (3x Units at $2k per mo) on a $3k mortgage. You just have to find the deal that makes sense. NJ is bringing in a record number of NY buyers, and most importantly, NY tenants. These are all young professionals in their mid 20s to mid late 30s that are high income earners and make for high quality tenants.

    Rents are at record highs here, I can literally break down the numbers for any of the 5 counties here in NNJ and show how much value add is on the table. The only issue in NJ is Inventory - that's the challenge I face as an Agent and Investor on a day to day basis.

    2Reply
  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    North Jersey has treated me well and it continues to win for my clients.  @Ben Mathew What it comes down to is your comfort level and what you are willing to do.  Before I can offer you a direction or a path I would like to know more about what it is you want from your investment, whats are you looking to achieve? 

    973-975-3895
    House Hacking New Jersey563 Reviews
    WebsiteView Page
    0Reply
  • Rich O'Neill
    Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
    5y

    @David Da Silva, I am sure you do well with your rentals, but it's just a different strategy. For the same $450k I own 5 properties bringing in $6,600 gross with the same amount of PITI, and I am spread across 5 separate income streams meaning if one tenant leaves I am only down 1/5 of the rental income, not 1/2. It is also easier for someone getting started to get into for their first few deals. Less appreciation though. Just a different strategy is all. I probably have more headaches than you and will likely not get quite as much appreciation.

    As my portfolio has grown I have looked to get into properties closer to your math to reduce headaches. 

    @Jonathan Greene the rental numbers in philly are pretty nice. I like the suburbs of philly even more since you generally don't deal with quite as much BS from the city and you can get similar/better numbers. The city seems to be very against landlords and development right now, and that is not a battle I feel like fighting when the suburbs offer some great alternatives. 

    2Reply
  • Jimmy O'Connor
    Real Estate Agent · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes
    5y

    Hey @Ben Mathew! You would be surprised on how much more you can get for that purse if you zoom out to other territories. I just had a closing for a 9 unit in the better part of Norristown PA that had a price tag of 500k without a crazy amount of work to do to it. @Rich O'Neill is right on point with the lower barrier of entry with more cashflow, but yeah the appreciation may not be as aggressive. From my understanding of Jersey, North Bergen is one of the best suburbs in the state, which likely makes it one of the most competitive. Is there a reason why you are looking to get into multi family investment there?

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free