Newbie investor in New jersey
Hi new memeber and investor here. Father of two with a full time job. I currently own single family i live in now for thr last 6 years and im ready for my first investment property. I live in orange nj which is really expensive to get in right now so I've been looking at other markets in NJ and even other states Alabama, Pennsylvania, Florida. Any advice on staying in new jersey for my first investment small single family or multi family, or advice on remote investment property in other markets outside of new jersey. Im open to any good ideas or advice. Im ready to get the momentum going. I also have my real estate liscense currently in referral status and would like to reinstate it. Sorry for the long post lol
Tony Freeman
Hey @Tony Freeman welcome to BiggerPockets and congratulations on doing the work!
“Live where you want, invest where it makes sense” as they say!
We have a very similar situation, 2 small kids, two full time jobs, and invest in the Midwest. We have a portfolio of single family homes and are growing that.
If you are open to a house hack (duplex, tri, quad - live in one unit rent out the others), that might be a good option for you to get started investing locally in addition putting you in a situation where you may have not rent/mortgage. That said, may not be a good option for you with two kids especially if you have a home today.
Have you run your numbers in your local market, things simply do not cash flow?
Might be worth looking at investing remotely. If you do your due diligence and build the right team, it's totally doable.
Happy to share all our tools, tips, tricks, resources, mistakes. Do not hesitate to reach out, connect, and DM me.
Hey @Tony Freeman Welcome to BP. I live pretty close to you and I am also licensed in NJ. I invest in NJ and Onslow county NC. If you ever want to talk about either market please feel free to reach out. Here is a interesting creative way to get into a multi in NJ. so i know your area pretty well there are a good amount of laundromats in your area. I owned and operated one but sold about 6 months ago. I was trying to buy the building it was in but it didn't work out the owner didn't want to sell. I had two scenarios to purchase the 3 unit mix use building. Since it was a 3 unit building and the commercial space was less then 51 percent of the building SQFT I could us a 3.5 % down FHA loan to move into the top unit. Now the laundromat is still cash flowing and the rent that it was already paying is now just going into the equity of the building. commercial rents are also considerably more expensive then residential so it really helps with your DTI. This scenario was because I already owned the laundromat. The other option was to get a SBA loan. From my understanding as long as the loan is for over $350,000 or more and it is secured by some tangible asset. like a building you can put 10% down and purchase the laundromat and the building and not live in it. This way you can have a business that if purchased right can be pretty hands off and instead of just a regular operational expense now your rent is building you equity. you typically buy a laundromat for 2.5-3.5x its net profits before taxes or owner pay outs. so if the laundromat made $50,000 a year you would purchase it for $150,000. lets say the building was worth $700,000 your deposit would be $85,000 plus closing costs. you would then own a building that is being payed for by the laundromat and other renters and business that cash flows $50,000 a year. Granted it will depend on how the SBA loan is structured. If its a 10 year loan you probably wont see any cash flow but would be building tremendous amounts of equity each year. Might not be applicable to what your trying to do but the more tools you have to make a deal no one else sees the better off you will be. I wasn't able to pull this off but its a solid strategy that I will be trying again in the future.
Hi @Tony Freeman North Jersey has worked great for me and my family. There is lots of opportunity depending on your comfort level and what exactly it is you want to do. House hacking has worked well for me and my clients over the years, even in todays market it is a great way to go. Have you considered house hacking a multi family? My wife and I house hacked with 4kids and 2 dogs around North Jersey so with a family yourself it may be a good option for you.
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Real Estate Agent New Jersey (#1326442)
- https://shawnmcenteer.exprealty.com/
@Tony Freeman Hey Tony welcome to BP. Currently investing in the 2-4 unit space in NJ myself. Happy to answer any questions.