Any suggestion for starter investor in Jersey City/Hoboken?

6 Replies

Hi there - Planning to start my first investment property. JC/Hoboken, 1B or 2B condo is my primary choice being closer to where I live so easy property management. However, the cap rate is relatively low. 

Wondering anyone here have invested in these areas can share how you did? 

Should I still look into this market or move on to other states with higher cap rate? 

Thanks!!

Cap rate does not apply to properties under 5 units and certainly not to a condo so don't use that calculation. Your HOA is going to be VERY high in JC/Hoboken and you would want a condo over a coop. Your in-price is so high for a 2 BR condo, if you aren't going to live there, I would be looking at 2-families in JC in the more developing areas.

I have many investor clients that only own condos in NYC and/or JC. They were either originally owner occupied at one point or purchased all-cash as investments. Yes, you can look elsewhere for lower expenses and higher cash flow, but my clients like condos around here because they are easy. A and B+ class properties with A and B+ class tenants. I vet the tenants, and handle any repairs and turnover, so there is no property management. Most of my condo clients are OOS and some are out of the country (and have never even seen the condos in person). 

Originally posted by @Jonathan Greene :

Cap rate does not apply to properties under 5 units and certainly not to a condo so don't use that calculation. Your HOA is going to be VERY high in JC/Hoboken and you would want a condo over a coop. Your in-price is so high for a 2 BR condo, if you aren't going to live there, I would be looking at 2-families in JC in the more developing areas.

 Make a lot sense. Thank you Jonathan!

Originally posted by @Jason Lee :

I have many investor clients that only own condos in NYC and/or JC. They were either originally owner occupied at one point or purchased all-cash as investments. Yes, you can look elsewhere for lower expenses and higher cash flow, but my clients like condos around here because they are easy. A and B+ class properties with A and B+ class tenants. I vet the tenants, and handle any repairs and turnover, so there is no property management. Most of my condo clients are OOS and some are out of the country (and have never even seen the condos in person). 

Thanks Jason! Yes, easy management is the reason why I looked at these areas. Then it seems for NYC/JC condo, using mortage as leverage not really an option as the rent will not be able to give positive cash flow? 

@Die FU you can find condos that break even at about 40% down but that doesn't take into account any vacancy or repairs. You'd want to put more down and then at that point my clients prefer to do all cash. It all depends on your budget and comfort level.

Originally posted by @Jason Lee :

@Die FU you can find condos that break even at about 40% down but that doesn't take into account any vacancy or repairs. You'd want to put more down and then at that point my clients prefer to do all cash. It all depends on your budget and comfort level.

Thanks Jason for the insight - very helpful. Revisiting my budget.