Camden, NJ Investments
Rental Property Investor · Brooklyn, NY · Member since 2017 · 37 posts · 8 votes
Hey BP fam!
I've been reading and soaking up knowledge for quite some time and I'm completely ready to dive in. I have looked into a few markets but I now have my heart set on Camden, NJ. The barrier of entry seems reasonable and the city seems to be on the rebound within the next few years or so. Camden actually reminds me of Brooklyn, NY which I was born & raised.
My current interest is to buy & hold either a multi-family or single family for cash flow. I am looking for professionals that are familiar with the Camden market and can guide me along the way. Are there any newbie investor friendly realtors that specialize in this market? How should I acquire financing to purchase this first property...should I finance through a bank? or go through hard money lender using the BRRRR method? I don't plan on relocating to the market as my family & I are pretty settled in the Brooklyn area and are unwilling to transition our 5 yr old out of her new school so house hacking would be out of the question.
Any advice is appreciated!
Hello Inemesit and Paul:
Greetings from Camden, NJ. It's great that you both are interested in the city. It's been in the news a lot lately. There is opportunity but I would say proceed with caution. There are quite a few investors who are members of the South Jersey Real Estate Investment Association https://www.sjreia.org/ who are actively investing and could give you some insights into the dos and don'ts in the market. Consider joining if not just for the networking opportunities.
A good place to start in looking at places like Camden is to identify the path of progress going through the city. I would suggest looking at the redevelopment plans for the city, you can find them here, http://camdenredevelopment.org/Plans.aspx. The city is pursuing an Eds and Meds strategy for redevelopment. They've invested greatly around Rutgers University, Cooper Hospital, Virtua Hospital and Our Lady of Lourdes. Neighborhoods adjacent to these facilities are a good bet, but there is a strong speculative environment right now. Off market deals may be your best bet.
Camden is a city of neighborhoods. So when talking to real estate pros, investors and residents use the neighborhood name in your discussions. Here is a map with the neighborhoods and their names - https://www.neighborhoodscout....
If you're looking to take on some risk, strong neighborhoods away from the Eds & Meds include: Cramer Hill/Pavonia, East Camden and Parkside.
If you want to go off the deep end on risk, Fairview, North Camden, Waterfront South & Central, Bergen Square, Morgan Village, Whitman Park, Centerville and Gateway are some of the choices for deep discount/high risk/high maintenance - fix and flip or buy and holds.
On bank financing, your going to run into some trouble. With the speculative environment, properties are prices with the future in mind, not the present. Thus properties will not appraise. Cash is king in this environment.
I hope this helps.
Best,
Ray Lamboy
Real Estate Investor
Camden Resident
Hi Inemesit!
I'm a newbie as well so I'm not sure if I can help too much. I'll share a few thoughts.
It may be hard to find a lender willing to finance cheaper properties, especially if they will need repairs. It may be worth your time to save enough to buy in cash and refinance later.
I'm curious about what you are seeing that makes you think Camden is turning around. You very well may be right, but I haven't seen that myself.
If you're planning on living 2 hours or so away, I assume you're planning on using a property manager. It may be wise to reach out to property managers first to see where/what they are willing to work with before you decide to buy.
In any case good luck and let us know how it goes!
Hello Inemesit and Paul:
Greetings from Camden, NJ. It's great that you both are interested in the city. It's been in the news a lot lately. There is opportunity but I would say proceed with caution. There are quite a few investors who are members of the South Jersey Real Estate Investment Association https://www.sjreia.org/ who are actively investing and could give you some insights into the dos and don'ts in the market. Consider joining if not just for the networking opportunities.
A good place to start in looking at places like Camden is to identify the path of progress going through the city. I would suggest looking at the redevelopment plans for the city, you can find them here, http://camdenredevelopment.org/Plans.aspx. The city is pursuing an Eds and Meds strategy for redevelopment. They've invested greatly around Rutgers University, Cooper Hospital, Virtua Hospital and Our Lady of Lourdes. Neighborhoods adjacent to these facilities are a good bet, but there is a strong speculative environment right now. Off market deals may be your best bet.
Camden is a city of neighborhoods. So when talking to real estate pros, investors and residents use the neighborhood name in your discussions. Here is a map with the neighborhoods and their names - https://www.neighborhoodscout....
If you're looking to take on some risk, strong neighborhoods away from the Eds & Meds include: Cramer Hill/Pavonia, East Camden and Parkside.
If you want to go off the deep end on risk, Fairview, North Camden, Waterfront South & Central, Bergen Square, Morgan Village, Whitman Park, Centerville and Gateway are some of the choices for deep discount/high risk/high maintenance - fix and flip or buy and holds.
On bank financing, your going to run into some trouble. With the speculative environment, properties are prices with the future in mind, not the present. Thus properties will not appraise. Cash is king in this environment.
I hope this helps.
Best,
Ray Lamboy
Real Estate Investor
Camden Resident
@Ray Lamboy I couldn't have said it better myself. I manage quite a few properties in Camden and I can back up everything you have just said. @Inemesit C. You definitely want to tread cautiously when investing in Camden. Here is an example of what I mean...a lawyer that I work with for evictions has a colleague that was delivering an eviction notice in person in Camden and got shot as a result! Yeah....its like that! I am currently working on 2 evictions in Camden for clients of mine and I NEVER show a physical presence when dealing with an eviction....its all done via phone, email and snail mail. i think it is still pretty risky, but like Ray said, there is opportunity but proceed with caution. All the best!
@Ray Lamboy I couldn't have said it better myself. I manage quite a few properties in Camden and I can back up everything you have just said. @Inemesit C. You definitely want to tread cautiously when investing in Camden. Here is an example of what I mean...a lawyer that I work with for evictions has a colleague that was delivering an eviction notice in person in Camden and got shot as a result! Yeah....its like that! I am currently working on 2 evictions in Camden for clients of mine and I NEVER show a physical presence when dealing with an eviction....its all done via phone, email and snail mail. i think it is still pretty risky, but like Ray said, there is opportunity but proceed with caution. All the best!
Thank you so much for your insight!! I am definitely going to do some more research into Camden as there is a lot of possibility there! I will keep you posted.
Great post. I'm also a newbie and have also been curious about Camden. I've done some drive bys and walking around various areas and have gotten a little spooked TBH! Given the roughness of the area, the prices are crazy speculative especially within the key downtown blocks. Also, despite all the investment in the area the majority of people that work at the Hospitals, Subaru, and Rutgers don't live in the area. There was a good article in the inquirer earlier this year on the struggle to see a true turnaround in Camden. A buy and hold investor probably needs a lot of patience and a thick (bullet proof?) skin!
https://www.inquirer.com/business/camden-tax-incentives-new-jersey-economic-development-20190207.html
That said I've been curious about the idea of an extended stay STR strategy catering to longer term business visitors to the hospital and the university. There is no hotel in Camden yet, but one is coming. The key is finding the right property, which isn't easy given the speculation.
For area investors, what are thoughts on Pennsauken for buy and hold BRRR approach? Seems more stable and less speculative than Camden with a high rental pool.
Cheers,
Krissy
@kristin I'm also interested in Pennsauken. I have been going down a deep dark hole of research into Camden, and having live in Brooklyn (Williamsburg specifically) pre and post Renaissance it looks poised to make a big move. But when digger deeper I realized the parallel stopped at the waterfront - which is currently 100% commercial. And if the previous poster is correct, and all the folks who work at the hospital, college and Subaru love further out, then I worry. I don't think Camden will have a real turnaround until that becomes residential. I'm still digging but losing hope. Pennsauken looks like and interesting alternative. Have you done any deeper research there?
@Jason Sinclair I am a Buy and Hold investor and my homes are in Camden. You will probably pay double (or more) in taxes in Pennsauken vs Camden. If you're ok with that then you should probably find good deals in Pennsauken!
Hey BP fam, I'm a new buy and hold investor in the city. Camden born and bred as well. I'm trying to find a hard money lender willing to lend in the city. Does anyone know of anybody?
@Kirk Johnson plenty of lenders willing to lend in the city but your bigger problem is probably loan size. What purchase prices are you looking at?
@Odie Ayaga Yea that's true. When the minimum property valuation for most of them is 150k-175k that eliminates most of the city though, but I already have the property. Got it for 10k renovated it for 14k and it appraised at 80k.
150-170K would work fine. 80K would be too low for most. Are you trying to refi?
@Odie Ayaga Thats my point though, most lenders will do that amount, but most houses in the city are not appraising that high.. Yes I am looking to do a refinance.
Ah I see. It's a little bit of an unusual verbiage for hard money lenders as they don't typical have "minimum property valuations" it's minimum loan sizes. For most it's somewhere between 50-100K. I'm assuming you're trying to refi into a long-term mortgage? Have you tried 1st Colonial?
@nelly r what are you seeing for avg rents in market currently (1-2-3 BR). I ran a couple queries on rentometer and the numbers looked decent ... hitting 1%+ rule.
@Nelly R. reposting last
@Frank Robinson Hey there. It really varies, depending on the specific area and type of property (upgrades). On average: 1 bedroom: $800-900, 2 bedroom: $950-1100, 3 bedroom: $1150-1300+. Again, this really depends on the area and if the home has been rehabbed.
@Nelly R.
The questions I have as a active NJ investor are what is the average multi purchase/ rehab pricing coming in at, are most of the rents section 8 now down there and lastly what is appreciation looking like on these multi family assets?
Looking forward to reply. Thanks in advance
@Inemesit C.
As a very active investor in NJ I would tell you and all the "NEW" investors looking to invest in areas like Camden, Irvington, Newark, Paterson etc...... to tread very lighty!!!
Yes these areas have a low barrier of entry which makes the novice investor excited but be wanted the tenants in these areas are not the easiest to deal with and the rental environment is not for the weak hearted.
I typically tell new investors to place good money in a good environment. As a new investor nothing wrong with buying a up coming area that is already 60-70% coming. Buying when the neighborhood is only at 10-30% is rough so prepare to bury your money for the long long haul.
Best of luck in your deal search!
@Joe Edwards My last 2 rehabs for SFH have been an average of $40-50k. Not sure about MFH because I don't own any. I purchased low so that I can do complete rehabs and know that majority of the home is new (less issues in the future). I do my research and buy in areas that are comfortable for me and that will get higher rents (including Section 8). My properties are near Cooper Hospital, charter schools, and in more family oriented areas. One of my homes I paid $24k, put in about $50k (my choice to do everything new....and tbh, I overpaid for some things), and it appraised for $130k. Not all of the homes will get these numbers, but many will.
Section 8 is big there but not all of my tenants are Section 8. All of my tenants are paying (thank God). It doesn't matter where you invest, vetting your tenants well is key. To be honest, I'd prefer Section 8 at a time like this, but that's just my preference. Investing in areas like Camden yield great returns for me, but also for me the picture is bigger. Maybe I'll get into higher priced, more prevalent areas at one point in my life but for now, I'm good! Everyone has an opinion on these areas. Some are backed by experience and others are backed by what they've "heard". I could go on for days telling you people's opinions on investing in Camden when they've never even stepped foot into the City or know nothing about it! I have friends that are doing extremely well in all of the areas people warn others to "stay away from". Camden, Newark, Irvington, Paterson, etc. We are all not the same. I do what works for me!
@Nelly R. - great insight throughout this thread. In your last post you mentioned Camden, Newark, Irvington, Paterson... did you pick Camden from those markets because you are more familiar with it or did you like it more than the other 4 for other reasons? Thanks!
@Josh Saladino Thank you! I chose Camden to invest because I live nearby (30 min away), used to work in the area, and I'm more familiar with it. Also, homes are much lower priced compared to the surrounding cities (acquisition cost and property taxes), yet the surrounding areas are beneficial (hospitals, Rutgers, Philly is 5 min away, etc). I've never considered the other areas (Newark, Irvington, etc) as they are further up North and I could do just as well in South Jersey. I'm not against other areas though. Again, I have friends that are doing extremely well up there! Heck, I'd even go out of state if the deal is great! Lol
@Joe Edwards My last 2 rehabs for SFH have been an average of $40-50k. Not sure about MFH because I don't own any. I purchased low so that I can do complete rehabs and know that majority of the home is new (less issues in the future). I do my research and buy in areas that are comfortable for me and that will get higher rents (including Section 8). My properties are near Cooper Hospital, charter schools, and in more family oriented areas. One of my homes I paid $24k, put in about $50k (my choice to do everything new....and tbh, I overpaid for some things), and it appraised for $130k. Not all of the homes will get these numbers, but many will.
Section 8 is big there but not all of my tenants are Section 8. All of my tenants are paying (thank God). It doesn't matter where you invest, vetting your tenants well is key. To be honest, I'd prefer Section 8 at a time like this, but that's just my preference. Investing in areas like Camden yield great returns for me, but also for me the picture is bigger. Maybe I'll get into higher priced, more prevalent areas at one point in my life but for now, I'm good! Everyone has an opinion on these areas. Some are backed by experience and others are backed by what they've "heard". I could go on for days telling you people's opinions on investing in Camden when they've never even stepped foot into the City or know nothing about it! I have friends that are doing extremely well in all of the areas people warn others to "stay away from". Camden, Newark, Irvington, Paterson, etc. We are all not the same. I do what works for me!
Nelly that is fantastic! I'm glad to hear you are winning in that market and you understand that market very well. My statement was just being general to all the new investor that hear through the grape vein that those markets are easy because of entry cost and find out the hard way because they end up selling there asset to folks like me for pennies on the dollar because they want out.
But i must say its refreshing to hear that you fully renovate your properties. That is my investing strategy as well. It has proven its self to be a great model for high appraisals, much higher quality tenant demand, great rent numbers and most importantly no major issues with the asset for the 1st 7- 10 years.
@Joe Edwards Thank you! I agree, I'd rather do the work now if I can, rather than have my tenants calling me every other day with issues. That's just my preference and the funds to do so.
The issue I have with some people (not saying you did this) is, they discourage new investors from buying in certain areas because of what they've heard, or maybe they've had a bad experience. This sometimes deters them from investing at all. Yes, these areas are mainly low income, but for me, buying in Camden allowed me to get in the investing game with minimal funds. Everyone doesn't have access to hundreds of thousands of dollars and I know I didn't! My first property was a $35k foreclosure and my bank gave me a mortgage on it (awkward, I know). It's a 2 bedroom, I put about $3-4k into it (paint, bathroom vanity, etc) and it rents for $1000/month. I still own it, my tenants have been there for nearly 2 years and have NEVER missed a rent payment (nor have they been late). Can't say the same for all of them now, but this experience spoiled me and encouraged me to buy more.
If I would have listened to the people who told me to stay away from those areas I would STILL be trying to save up enough to put 20% down on a much more expensive property in a "better" area. The point is, educate yourself, establish a team, get in the game and gain some knowledge/experience. Have a plan A, B, C , and sometimes D! So what if you lose money and have to sell the house! Is that the worse that can happen?! If so, I'll take it! If so, you've learned so much more from that than not doing it at all. Happy holidays to you!