So, my plan to start out in investing was to invest where I currently live in the Bloomfield NJ area in a multi family house and house hack for a couple years. Those couple years, I’d be putting money away for a single family home and move out of the multi family. Then id rent the unit that I previously lived in.
From there I’d go on to live in that single family and build the RE portfolio.
However, it seems like this year especially, the cost for multi family houses in the Bloomfield area have skyrocketed and I can no longer get started in October as planned.
I'm wondering if it would be a good idea to skip the multi family house in this area, and move out to a cheap area of NJ with a mortgage way under budget, and then use the extra wiggle room I have in the budget to put money away for REI.
The Lake Hopatcong area seems incredibly affordable and not too far out of the way. What am I missing about that area? I’ve seen some people complain about a heroin problem on other forums, but that doesn’t scare me too much.
@Ryan Allen can't speak to Hopatcong as a long term investment, but what makes you think you can't stick to your plan of house hacking a multi-family in the Bloomfield area? Values have definitely increased in both single family and multi, but the key to house hacking success in my mind is determining your goal budget for what it'll cost while you live in one unit and then to consider whether the place would cash flow from day one if you never moved in. I see plenty of opportunities for house hacking in and around Bloomfield still.
I may still be too inexperienced analyzing deals, but from what I’ve seen in Bloomfield - I’m unsure if I can afford to invest yet. When analyzing 6 months to a year ago, there were multi family houses galore in the 350k range, but looking now it seems as if they’re all dried up.
I am only analyzing on Zillow, though, which I know isn’t the ultimate resource for finding great cash flowing deals.
@Ryan Allen I also looked at multi family deals and agree that the cost has sky rocketed but if you are looking to house hack, living in a multi and renting out the other unit might still cut your living expenses in half if not more (considering the low rates right now). You might not cash flow for a few years while living there, but if it help you pay less in expenses, it might be worthwhile. Not sure what your living expenses look like now but just my general thoughts.
You aren't getting near a $350k multi in Bloomfield right now, so you are spot on. If anything was listed at $350k, it would either go for $450k or need $100k in renovation and have holdover tenants. Even Belleville is above the threshold and there are too many investors looking for the same thing. Hopatcong won't be the same on appreciation however and you will deal with more rural issues for some, like septic. I am not saying you can't get in Bloomfield, but house hacking in Bloomfield right now is $450k minimum and for newer investors most of the deals that you think will look good will require too much rehab or be hiding a skeleton.
@Ryan Allen Lake Hopatcong is a great area. I sell real estate in that area. It has the same amount of issues as any other suburban/urban area. Plus unlike other rural parts of this area you can find public utilities which is a huge plus. Feel free to reach out, more than happy to help you out.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you