Starting from Scratch in South Jersey, New to Bigger Pockets

7 Replies

Hello BP community,

My name is KJ Kulik and I am a recent 2017 graduate from the University of Rhode Island. I currently work in Voorhees, NJ and commute from home in Moorestown, NJ. Although this situation is favorable for now, I hope to move out in the near future and explore opportunities purchasing my first property (hopefully a house-hack situation). Was hoping for some insight into the area around me (South Jersey/Greater Philadelphia) as I am torn between saving up to buy my first property in the city, or buy local and more reasonably. Wondering if there is good cash flow in any of the areas nearest to me (Medford, Mt. Laurel, Cherry Hill, Haddonfield).

A second topic I would appreciate some advice on, is how to best combat student loan debt when attempting to enter the real estate industry. Obviously no debt would have been the preferred route, but as it so happens (as I'm sure it has happened to some of you) I am stuck with a fairly significant amount of "good" fixed/low interest debt. Wondering if the important thing for someone in my situation is to focus on paying this all off and getting back to zero, or if it could be beneficial for me to save towards that first purchase, while taking longer to attack my loans. 

Really just looking to connect with a bunch of you in the NJ/PA area and form relationships as I go. Please reach out with any pointers you might have for a newbie living at home in South Jersey. Thank you all and I look forward to being a part of the team!

Hey KJ! Welcome to South Jersey.
There are house hacking possibilities. However, you’ll be hard pressed to find them in the areas you’re looking into. That doesn’t mean it’s impossible! I actually came across an amazing duplex perfect for house hacking in a good part of Clementon. I’m a Realtor so I’m always keeping an eye on the market and happen to work with lots of investors even though many agents dislike doing so. @Justin Eaton is having an investor get together next week Thursday in Cherry Hill. If you’re available stop by and it’ll be a great opportunity to meet. Also, I’m hosting free a first time homebuyers seminar tomorrow in Cherry Hill from 7-9pm. Definitely stop by if you have time. All the best!!

@William KJ Kulik Welcome to BP! Congrats on graduating from Rhode Island. I graduated 7 years ago and rented for a couple years in Manayunk with friends (I did and still have student loan debt) I now own a home in Philadelphia in a good solid area. Here is my advice...

- Housing situation - I recommend the house hack approach if you are able to get some of your friends to rent from you to cover the mortgage. First, get in contact with a mortgage broker, I'm sure they will tell you that you need at least 2 yrs under your belt first. It looks like you are living at home, I would stay at home as long as possible to save as much money as possible. I look back at when I rented in Manayunk and I spent about $20k in rent for 2 years. I wish I stayed home to save money. 

- Location - I cover Philly, Delco, Chesco and parts of Montco. Obviously it comes down to the numbers/location and condition of the property. Philly is in the the #1 spot but that will likely come at a higher price but there are deals out there. 

- Student Loan Debt - It depends on how much. Some people may disagree but I recommend not paying it off and saving for that first property. It will be helpful to get in contact with a mortgage broker to see what you would be approved for with the student loan debt. As long as you buy right, you'll be in a better situation if you are able to save for a home and buy a good quality property and live for free.

Congrats on figuring this out sooner than later. I wish I was in your situation when I graduated 7 years ago. Message me with any questions. Good Luck.

Hey @William KJ Kulik welcome aboard! I couldn't agree more with @Tom Doherty about wishing i knew what i knew now as soon as i graduated college. Hell if i knew what i knew now before college i wouldn't have went. I also have a considerable amount of student loan debt. Instead of trying to pay those off, i prefer to pay them as regularly scheduled and combat the payments with cash flow (as long as your student loan interest rates are low). It may only take one or two rental properties for the cash flow to cover your student loan payments. 

I would definitely suggest a house hack via duplex, tri, or quad. In most cases, the rental income will cover at least 50% of your PITI. Also, it will allow you to be an on site landlord and you will gain some valuable experience in that field. In addition, when you're ready to move onto the next property to live in, you can rent out the space you were living in and have a nice cash flowing property that you're very familiar with. Now, if you can find a multi that needs some upgrading, this is where you can really make a good buck because you can force the appreciation (increase the value) by making upgrades to the property. Also, you can use FHA financing which will allow you to get into a property for only 3.5% down, so it may make it easier for you to find and afford a nice multi in the areas you mentioned, which are mostly B+ or better.

I have actually been actively searching for a multi in those areas as well, specifically Haddonfield, so i can definitely keep an eye out for you.  Try and make it to the meet up next Thursday! Hope to see you there and good luck. Feel free to message me as well. 

Justin 

DITTO @Justin Eaton & @Tom Doherty

I am going to throw some numbers a you really quick

Student Loans

government subsidized - 3-5%

Unsubsidized loans - 5-7%

2017 Stock Market Returns

S&P 500 - 23%

Nasdaq - 29%

DOWJones - 29%

Russell 2000 - 16%

Real Estate investments

2% Buy & hold - 6-100%

Their are better options for your money than spending it on low interest loans. If the weight of these loans puts a bearing on your shoulders, then pay them off ASAP.

I would pay the minimum on student loans while house hacking.  

Even if its half a duplex close to transportation. with roommates it might be doable.  I don't know that market, we did shore and philly which worked out. 

Welcome! I’m originally from Medford and now live in Westerly, RI. The problem with the towns you mentioned is the property taxes. I hope you find Somethig and wish you the best!