After copious amount of research and listening every BP podcast and video I am an trying to analyze my first deal. My fiance and I are entertaining a property in Hightstown NJ, but are having trouble which what factors should be a higher priority. Some of the questions and concerns we have are:
1-To start off, does anyone know about the trajectory of the town from either being from or around the neighboring area. We are relatively new to the area (less than 1 year), and I know BP preaches invest in the areas you know. Not knowing much about this town specifically it neighbors areas like Princeton, Windsor, and Monmouth Junction which probably all qualify as A rated neighborhoods. The town has a questionable new construction of a downtown center/condos that we will be contacting the township on.
2-This property, relative to others in the price range, is aesthetically and structurally much less work than others. However, is it is on the worst street in right near downtown and a bunch of very nice restored Victorian homes. There are some neglected duplexes across the street, and the property borders a parking lot for a local church. In this case does the house trump the immediate location or vice versa?
3- I am not sure if we can directly talk to the owner, but he or she is currently renting it out to a tenant. I would love to ask the reason for selling, and will try to get an answer. It has been on the market for 100+ days.
We are pre approved and looking to live in and flip or BRRRR. I am assuming a BRRRR strategy would be more advantageous because of the immediate surrounding area. Any takes on some of this information and questions would be greatly appreciated.
@Travis Thompson ... First, congratulations on doing your homework and, especially, on taking some action now! Great job!
I can comment on questions 2 and 3.
2. I personally, give a lot more weight to the area than to the property. I'd rather buy a house that needs work (something largely within my control) that is in a nice area than a nice property that is in a sketchy part of town (that I don't have a lot of direct control over). I am sure there are exceptions to this. My preference is to pay a fair price for a great house in a great location rather than pay a great price for a fair property in a fair location.
I suspect there are others that feel very differently.
3. If it is currently listed for sale in the MLS and you've signed an agreement with your agent to have them represent you, you should check that agreement. In our Exclusive Right-To-Buy Listing Contract agreement here in Colorado, you agree to have the agent represent you and all communication to go through the agent. If you were here, I'd suggest you ask your agent to see if you can find out from the seller why they're selling. My experience suggests you rarely get a good answer to that when going through your agent to their agent to the seller.
If you're not in an agreement or your agreement does not restrict your ability to contact the seller directly, then go for it. Sometimes being able to talk directly with a seller will significantly open up options for you.
Also, if you're considering the live-in BRRRR model, you may also want to consider buying a nice property in a nice neighborhood with little or nothing down with the Nomad model. It may allow you to get a better property (at a fair price) and achieve a similar goal of having little to nothing in the deal if you want to ultimately want rentals.
Hope that helps, congratulations and keep working at it! You got this!