Using a lender in the same general area as the property will usually work better for you. They know and understand the market better. Keep in mind, if you are looking to fix and flip, traditional lenders may not be your best bet. In that case, a hard money lender or private lender will likely be able to provide more flexibility.
I agree with Jeff Ledyard....go with a bank near the property. Good choice to not invest in NJ....not landlord friendly I hear.
In January, I sold my duplex in Allentown. It is still a sellers market in the Lehigh Valley. David Ribard is my realtor, he sold my property before it was even listed. He works exclusively with investors.
Hi @Christopher Bruno . I'm a Realtor in the Lehigh Valley and the landlord of a multi-family property in Allentown. In my general opinion, since each deal is different, Allentown and Bethlehem both have strong cap rates at more affordable prices than NJ (I grew up in north NJ and have lots of family still there). If you're looking to flip in those areas, investors will statistically be your likely buyer depending on neighborhood (e.g., Allentown is ~33% owner occupied overall). Demographic trends are favorable for long-term buy-and-hold, considering the Lehigh Valley is the fastest growing region of Pennsylvania and Allentown specifically is the fastest growing city in PA.
Let me know if you'd like to hear more.
@Christopher Bruno Welcome to the forum! Great place with lots of valuable insight.
Overall, I recommend you choose a lender that is local to your investment. Most of my clients are out of state and buy in the Lehigh Valley, and they have had good results using the local lenders here. As long as the lender is in-state, and / or does a good number of loan closings in the state, you should be fine. The only time I've had lender issues is with a California based loan company that didn't understand Pennsylvania real estate law. You will deal with your lender primarily by phone / email and send documents to them digitally, so their location doesn't matter all that much.
I think you defeat the purpose of banking local to where you're investing if you do so with a national lender like Wells Fargo. Find a local lender, but find a local community lender
@Joe Tomko I'm not sure I'd call it a bubble, but I do know of sellers doing exactly as you describe. I think your advice of "doing one's homework" applies to every deal you do.
@Christopher Bruno I a certain area's investment desirability has to align with one's particular goals... Is your idea to buy-and-hold to generate cash flow for a specified term? Are you looking turnkey, a place you can add some value, or the shell of a building that needs to be redone and populated with tenants? Residential, strictly commercial, or mixed? Are you aiming at appreciation due to the "path of progress" (which some may label as speculation)? Just some questions that may help you refine what your investment interests might be.