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Ansel Ueshiro
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Best neighborhoods to househack in Northern NJ

Ansel Ueshiro
Posted Jul 7 2022, 19:38

I'm looking to identify the best neighborhoods in North NJ to invest in a multifamily home to house hack. First time buyer with a 450k max budget looking to purchase in the next 6-9 months.

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Kevin Manafi
  • Realtor
  • New Jersey
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Kevin Manafi
  • Realtor
  • New Jersey
Replied Jul 8 2022, 07:15

Hi @Ansel Ueshiro, welcome to the BiggerPockets community and congrats on taking the next steps in your investing journey. It's hard to direct you to particular neighborhoods without knowing your specific investment objectives and criteria, but know that $450k for a multi-family in prime areas of Northern NJ will be hard to come by today.

I'm an investor and investor-agent specializing in Northern NJ (Bergen, Hudson, Essex, and Passaic counties). I'd be happy to connect and chat more about your investment goals.

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Anastasia G.
  • Lender
  • NJ NY PA CT GA FL, Puerto Rico
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Anastasia G.
  • Lender
  • NJ NY PA CT GA FL, Puerto Rico
Replied Jul 9 2022, 15:00

 Hello, Welcome to the real estate world and...reality... 😁 I would agree with @Kevin Manafi that with the budget of 450k is going to be tough in North Jersey Market unless you are open to do 203k/renovation. Work with an agent to narrow down the areas, also, I would work on a monthly maximum budget allowed for your type of financing; Max budget will include taxes; Get cozy with the mortgage calculator and make sure you run scenario before you see the property; 450k to me does not mean a lot - we do not know the tax amount, the program/rate, how much you are putting down etc.. First time homebuyer does not always mean low downpayment..Depending on your comfort level with how much you are willing to put down I would look to see if buying down a rate is an option to increase your buying power

Not a lot of consumers know but there are conventional programs with 5% down for 2 family with no private mortgage insurance/reduced mortgage insurance - which might give you higher buying power. Some program have property location restrictions, FHA is not the only program available. Take a look at an example of 450K First Time Homebuyer programs in New Jersey we work with. Feel free to reach out, would be happy to give you a second opinion.

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Jean Carlo Vilalta
  • Rental Property Investor
  • Essex County, NJ
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Jean Carlo Vilalta
  • Rental Property Investor
  • Essex County, NJ
Replied Jul 9 2022, 16:25

Welcome to investing in the area! As someone currently under contract on a duplex house-hack in Northern NJ, I'd ask: How you are setting your 450K maximum budget? Have you been pre-approved for that amount? Are you figuring that because you have a percentage of that saved up as a down payment? 

If you are house-hacking and therefore owner-occupying, you have loan options available which allow down to 3.5% down. What type of financing are you seeking? I recommend you reach out to a handful of loan officers in the Northern NJ area and they will help you pin down what your options are, as you may be eligible for more than 450K or may have more creative financing options at your disposal based on your situation and buying criteria.

All of that said, there are options in that price range in our area, but you'd be sacrificing things like quality of the neighborhood or amount of renovations required on the home after purchase. You can run a search on Zillow or Redfin with a price maximum and see where those properties are coming up. Something to consider in your property analysis is flood insurance costs, as some neighborhoods in Northern NJ are in or close to flood zones that would require additional insurance and therefore raise your monthly costs. The BP calculator can help you determine what a good deal looks like. The folks at the "On the Market" podcast from BiggerPockets recently shared this house-hacking calculator as well.

Some more information would help us provide a bit more insight, but this is a place to start!

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Dylan H.
  • Rental Property Investor
  • DC MD VA
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Dylan H.
  • Rental Property Investor
  • DC MD VA
Replied Jul 9 2022, 16:49

I lived in Morristown for a while, based on that I'd recommend Westfield, Piscataway, Woodbridge and maybe Cranberry or Elizabeth

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Replied Jul 9 2022, 18:08

Dylan H:

Real estate in Woodbridge and Piscataway are no longer inexpensive. With a good Realtor that understands creative real estate perhaps, you might find a house in your price range.   Homes in Cranberry and Westfieldis are way out of your price range and both have a very high tax rate. 

Good Luck,

Bob 

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Ryan B.
  • Rental Property Investor
  • New Jersey
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Ryan B.
  • Rental Property Investor
  • New Jersey
Replied Jul 21 2022, 07:51
Quote from @Anastasia G.:
Not a lot of consumers know but there are conventional programs with 5% down for 2 family with no private mortgage insurance/reduced mortgage insurance - which might give you higher buying power.
I'm no longer a first time home buyer, but do you have additional details about these programs? I'd like to recommend them to others. I was able to get a 5% down conventional (with PMI) for an owner-occupied duplex back in 2020 through a big bank, but my understanding is that they haven't been offering these kinds of deals as of late.

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Anastasia G.
  • Lender
  • NJ NY PA CT GA FL, Puerto Rico
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Anastasia G.
  • Lender
  • NJ NY PA CT GA FL, Puerto Rico
Replied Jul 21 2022, 09:13
Quote from @Ryan B.:
Quote from @Anastasia G.:
Not a lot of consumers know but there are conventional programs with 5% down for 2 family with no private mortgage insurance/reduced mortgage insurance - which might give you higher buying power.
I'm no longer a first time home buyer, but do you have additional details about these programs? I'd like to recommend them to others. I was able to get a 5% down conventional (with PMI) for an owner-occupied duplex back in 2020 through a big bank, but my understanding is that they haven't been offering these kinds of deals as of late.Hell

Hello! Absolutely! would be happy to connect! we work with few programs, and for Two Family we have more than one FHA option :)

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Vaughn Smith
  • Investor
  • New Jersey
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Vaughn Smith
  • Investor
  • New Jersey
Replied Aug 2 2022, 08:03

@Ansel Ueshiro I'd suggest a few steps to help you get started (if you haven't done these things already)

1) Have a clear expectation of what type of area/tenant you're interested in, $450k in northern NJ now typically places you in a C- area, the property will probably have non paying tenants or you may end up with a small property in a nicer area where its tough to cash flow.

2) Look outside of Northern NJ if you head further south or west you'll find better value 

3) consider non traditional house hacks, perhaps you use part of the property you hope to buy as a STR instead of searching for a multi family

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Shawn Mcenteer
  • Realtor
  • Boonton Township, NJ
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Shawn Mcenteer
  • Realtor
  • Boonton Township, NJ
Replied Aug 11 2022, 15:09

@Ansel Ueshiro house hacking is really about coming up with a strategy which varies client to client.  Most of the time the best returns I find to be in Essex county but it depend on the individuals needs. I am closing on house hacks all over the state.   6-9 Months isn't to far off, I would start planning now.  A few tips I always recommend for first time house hackers are:

Convetional financing, avoid FHA its not worth the trouble. Lenders offer low money down conventional for multi family owner occupants

be open minded to renovating

the more liquid cash the better (not for down payment, for Reno)