House-hacking in NJ with a Duplex/Triplex

8 Replies

Hey guys,

I am new to the forum—I appreciate any and all help! I am set to graduate from The College of New Jersey this December and my mind has been wondering about the future... preferably where I want to live and how I want to begin my real estate investing career. I am set to begin work in January, and the job is fully remote, so I do not need to be in any set location. However, I am born and raised in NJ and would prefer to live somewhere in the state. My goal has been to house-hack, preferably with a duplex or triplex. Anyone know of a specific area of NJ for me to begin my search? My initial thought was to search in Northern Jersey (closer to NYC), as COVID has sparked a work-from-home movement and people move out of the city...but I am open to suggestions, and would love to be pointed in a general direction ideal for duplexes/triplexes. Thank you all!

@Ryan Solomon where you should go in NJ will be determined by what you can afford to do, and how risk adverse you'd consider yourself.  Without knowing those thing any recommendations will be purely speculative.  

@Ryan Solomon, Welcome to BP. First Thing, Prequalify and See what you can afford buying wise via House Hacking and you can back into the New Jersey Community you can afford. Let me know if you have any questions. Regards Joe Scorese

@Ryan Solomon - Hi Ryan! Reach out to Joe Scorese. He's an awesome lender and investor. Also look into joining SJREIA or other REIAs in North Jersey.

I and several friends have rentals around TCNJ and Rider. You could always consider buying a big house and rent all the bedrooms except one to students or local working professionals at $550-600 per bedroom plus split utilities. There are several 6/3+ properties available which would essentially be paying you to live in your own house. ($3300+/mo rent on a $2000 or less mortgage). After one year you can move to a different house and keep getting owner occupant loans. The only downside is you need to qualify to buy the whole house, unlike a 2-4 unit where a mortgage lender can factor in the 1000-3000/mo extra rent expected towards your total purchase price. Overall I've found the too big house concept as described by Craig Curelop in house hacking book as the highest ROI. 2-4 units are harder to find, often hard to tour because of existing tenants not wanting to show the house, and often older construction.

You don’t necessarily have to do this around tcnj. If you pick something close to transit, you will probably find enough professionals to fill up the house, especially if you furnish it.

I live near Ewing now if you want to tour any after you get your prequalification letter. You may have a family member who can help you buy too as a co-owner on your deed.

@Joseph Scorese Appreciate the input! I have some time (as I have yet to even get my first pay check), but I will definitely prequalify first. However, I do have one question... after my first year of employment my salary will increase by roughly 30% (conditional on passing licensing exams, etc); would you recommend me wait until my salary increase before I prequalify? Will I have more opportunity that way? Thanks

@Natalie Schanne Awesome insight! Thank you! I am currently renting an off campus house at The College of New Jersey, and I know there is great potential in that area! Rent / head or rent / bedroom makes the investment much more profitable... my recent concern with off campus housing is that COVID has made off-campus student housing much less desirable with online schooling, etc. It is probably too soon to tell, but have you noticed more vacancy than usual? And if I go the other route, and look at the too-big house concept in areas of NJ close to transit, are there specific towns that you would recommend me to research? Again, can’t thank you enough for the help!

@Ryan Solomon - I’ve had lower vacancy and higher rents because the kids on campus were kicked off because of the covid restrictions for the on campus housing. (1/2 occupancy). They’d been renting a 10 person townhouse at $1200/mo each. I expected $550-600/bed and got $650/bedroom plus $300/person for double occupancy. So they’re saving money and I’m recouping my investment.

As far as a too big house elsewhere, my first too big house was in the suburbs of Washington DC so you can really do this model anywhere. Just be 5-10 minutes to major offices, grocery stores, etc. Avoid anywhere with well water, septic, and oil heat. Check zoning laws which may affect how many people you can have living in the house, especially if you move out and are no longer owner occupying. Housing appreciation is correlated with award winning school districts (where do families fight over properties to live?). I prefer to buy ugly foreclosures / REO, estate sales, etc. The best areas will have very limited foreclosure opportunities right now. I'm not sure if New Jersey got better with its laws, but I bought a house that was vacant for 4+ years after the bank repossessed it. I got it under contract the first week it was on the market in 2018. The water off was listed 12/13/2014 on stickers. So sometimes the governmental process isn't fast

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