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Hi All! Looking for some thoughts/suggestions on my current investing situation. I currently own a duplex here in Central NJ that I have been househacking for over 4 years now. It has been amazing for me, allowing me to save and have a very low monthly housing expense. The area has appreciated at an insane rate and I have about $170k in equity, conservatively speaking. If I were to move out and rent my half, I would collect $1800/month after PITI, roughly $900/month pure cashflow after all expenses, making the Return on Equity a little under 7%. I have money saved up to buy another primary and have been looking for other duplexes, tri's and quads. I work fully remote but my goal is to pursue house flipping/home building on the side once my monthly living expense is closer to 0. What is holding me back is whether or not to continue to buy rentals in NJ. I've heard some horror stories about the eviction process here, and I have been lucky enough to not have had to deal with it, but I do not want to press that luck.

Should I consider cashing out on my current duplex and moving to a more landlord-friendly state? Or is the hype overblown about owning rentals in NJ and I should take it with a grain of salt?

Thanks for reading, looking forward to hearing your thoughts.

Shawn Mcenteer · Answer

Well said @Peter W.  High demand give us as landlord a lot of control.  At the end of the day tenants will do everything in their power to avoid courts knowing very well it will make life very tough for them moving in the future.   Attract quality tenants, avoid warzones and majority of wacky laws have very little meaning

Samuel Diouf · Answer

Hey Giovanni, I know a lot of investors in NJ who have chosen to invest elsewhere and are glad that they did, but I also know some of them still have large portfolios in NJ that are doing well. It will really come down to what your long-term goals are and what route you think would get you there the fastest.

Shawn Mcenteer · Answer

Hi @Giovanni DiBlasio I have been house hacking for over 10 years in new jersey.  I am yet to have an eviction.  My mentor has been investing in NJ for over 30 years, he has 1 eviction and it was from a tenant he acquired with the property.  If you do the proper work upfront and know the areas with more favorable laws (NJ is very town by town)  I do not see land lording being an issue.  If you have the ability to house hack again going OOS is essentially restarting the process from scratch.  From the dozens of house hacking properties I closed on last year everyone is at a break even point minimum.  Most are increasing rents $100plus this year.  For myself I have clients moving out of one my units.  I will likely raises rents over $500 once they do, on another property I am adding a creative element to increase cash flow over $5k with out me lifting  a finger. Huge income state means potential for high paying tenants.  The fact of the matter is you have success here in NJ, you have equity which ultimately gets you to freedom over cash flow (I know this becuase I literally purchased businesses from the equity in my HH) it seems like you are rocking right now so repeat what you learned and get better.

Joe Villeneuve · Answer

You need a plan.  A financial real estate plan, with financial steps where each step leads to the next one.  To do this, you start with your financial goals, and work backwards.  This plan will tell you exactly what to do next, and beyond.

Nadeem Alamgir · Answer

Hey Giovanni, I grew up in NY, NJ/NY are tough states for landlords if things go sideways, especially with eviction delays. A lot of investors in your position choose to leverage their equity into more landlord friendly markets where cash flow and protections are stronger.

Whether you hold or sell depends on your risk tolerance, but if your goal is to scale or flip long term, moving your capital to a more predictable market could make things easier.

Peter W. · Answer

I would live where you want to live, not necessarily where you think real estate laws will be most favorable.  Even in landlord unfriendly states (I invest in upstate new york), it won't be a huge issue provided you do a good job documenting everything, know the law, build a thorough lease on what is and isn't allowed, screen your tenants, keep your building habitable and safe, and run your business professionally. For New York State ((not rent controlled), I found that the laws were in line with how I thought I should be operating my business anyways.  I will say, I budget an extra 2% of rent to turnover costs in my underwriting, because I know if I have to evict it will require paying someone to serve the tenant (I think twice) and will probably take nearly 5 months, and I'll probably need a court order to garnish wages.

What you'll also find, is that in states where housing is in short supply, the tenants *need* to be good tenants, because it is a pain in the butt to find a new place and if you get evicted there is a decent chance you end up homeless or with a slumlord.  When they leave, they are going to need a good landlord reference for the next place.  The last tenant I placed was crying with joy because I was willing to lease to her, because she was desperate for a house that would fit her 3 generational family (and 2 dogs) in the same school district where she had been for the past 10 years (had to move because owner was selling the place she lived previously).  I just wouldn't invest in the warzones in a tenant friendly state.

JooYung Choi · Answer

Hey Giovanni,

Sounds like you have a solid first deal / house hack there, congratulations.

I currently invest in NJ & Out of State.

I mainly buy and hold for the appreciation in NJ. Every year or so, I move to my next property to house hack utilizing a 5% down conventional loan, only buying properties that I believe have strong appreciation potential. Of course, the property taxes and the high purchase price make it challenging, but I've been taking advantage of the strong MTR demand in North Jersey so the math has been mathing.

I invest out of state to target more cash flow with STRs / MTRs. Luckily, I also work a remote W2, so I am able to venture out there to set it up and renovate, etc.

I have not gone through an eviction, and I am praying that I never will. We have a very strict tenant criteria and always do everything we can to make the best informed decisions. I don't think the fear of an eviction should deter you from investing in NJ. I strongly believe in the power of NJ appreciation and I know my future self will thank me greatly for it.

Jason Valentini · Answer

Recently went through the process of evicting a tenant in northern NJ. First time and did the paperwork myself, had them out in about 3 months. Not to say all eviction processes will be the same, but just wanted to give you my experience.

Marc Winter · Answer

Since you work totally remotely and you want to house-hack, move to your ideal/dream location.  You know, that place where you'd really like to live.

If you're happy where you live (and work) you will do well with your investing.  If that's NJ, then stay there.  If not, 'Green Acres'...

Bernice Retzloff · Answer

Hey @Giovanni DiBlasio!

Sounds like you’ve done an awesome job setting yourself up with that house hack, and sitting on $170K in equity puts you in a great position. Your concern about New Jersey’s landlord laws is valid. It’s not just hype. While you’ve had a smooth experience so far, things can get tricky fast if a tenant stops paying, especially with how slow the eviction process can be. If your long-term goal is to bring your living expenses down and eventually get into flipping or building, it might be worth looking at cashing out and moving your money into a more landlord-friendly market. Somewhere like Memphis could be a solid option! Properties are still affordable, cash flow is stronger, and you’re not dealing with the same legal headaches. You could potentially spread that equity across multiple rentals, build stronger monthly income, and reduce your overall risk. Happy to talk through some options if you want to see how that could play out!

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