All Forum Posts by: Amit Patel

@Michael Abate

Michael - In many areas of Jersey, the 1-2 Families will NOT cash-flow positive. The basic math just doesn't work because of a few high costs that can't be absorbed by renting out 2 units.

1. Taxes (My per unit taxes on a 4 family are 3K a unit while on my 8 family, they are 2K a unit)

2. Water is high , regardless of units in NJ

3. Maint/management costs ( 6% on bigger properties where as 2-3 units they want 10%)

Many people are buying and living in one since its lower than renting and you are building equity. Also, people are buying for appreciation. Right now, due to the higher values, people are holding out and not enough inventory in many areas as well like Jersey City so this is driving up prices. My advice is to keep looking and make sure the numbers work for you if this one doesn't work. Personally, I'd suggest you look at 4-family if its in your price range as that will give you the sweet spot where you can start seeing a decent return.

@Yisroel Kaufman

look  up Ibrahim Hughes on here he was very helpful to me and really knows this area 

I would avoid New Brunswick as the cap rates are not great and the town sucks to deal with as a landlord. All the better housing is closer to downtown and very expensive anyway. There is no guarantee that the transit village will go through as its been talked about for a long time and requires huge funding from the state which may not come forward. However, if it does, I don't think it will take away much as down town New Brunswick is popular more due to the restaurants and proximity of train station and I don't see anything changing.

@Raj G. said.

Typically people convert the first floor into a duplex using the basement because the cost to do it is low. This is also done if there is attic space based on the design of the house. Essentially you are getting very cheap living area per square foot.  If the area is huge, you can get a variance based on size - For example I had a space that was commercial but not in a commercial area and they let me convert it to residential very easily through zoning. However, it was 2,000 square feet and I had to through zoning and planning board approval and took several months and had to hire a zoning lawyer (just the legal stuff cost about $9,500 in legal fees and city fees and application and deed update, etc. and that was using a cost effective lawyer). I essentially argued that 2,000 sq. feet was too big for one place so they should let us make it into two and they let us. Now My place was already 4 residential + 1 Commercial and I turned it into 4 residential + 2 more residential so its a bit different for zoning. Bayonne zoning is a bit different and from what I've heard they are really trying to promote more building. My suggestion is to find the best architect in town and ask him and he will recommend a good zoning attorney in town and you can speak to them for free initially and he will tell you if its worth taking on. PM if you need any more assistance once you get this info.

@Account Closed

For what you want to buy, it will be REALLY tough in NJ unless you want to go into areas such as Trenton (at least from my experience).  It's not only taxes but water/sewer are really high in NJ. When you have maintenance or repairs, the costs are generally higher as well due to higher labor rates. My suggestion would be to either pool your money with other folks and buy a higher unit multi-fam where the per unit taxes will end up being much lower. For me the sweet spot is a minimum of 4 units but it all depends on the location and price.  If you decide to buy out of state, just keep in mind to make sure you can get good management as you will not be able to go there if there are issues (unless you do PA or other places nearby).  

All this being said, if you can find a rehab gem or something similar, you can certainly do well. Due to how competitive NJ is and how low the cap rates are this is what I have to do if I want to earn 9-10% returns in hot areas such as Jersey City. There are properties out there but you will need to buy cash and you will need to go through a ton of properties to find that one gem. PM me if you have any questions.  

@Account Closed  Thanks.. looking into it now

@Sumana Som 

the FOR RENT sign can gets more calls than online ads ( depending on the area ).

Not sure if you have tried this yet. To avoid getting people who can't afford it, you may want to put the monthly rent on there and a description.  You can also make the tenants pay for the screening if you are concerned (assume your price point has renters that will do this).

@Summie S.

I need some Coin Operated Laundry and Electric dryers (no gas hookup in basement).

I have looked at Lowe's etc. and PC Richard and they all sell this Whirpool brand that has horrific reviews across the board and the stuff they sell has horrific reviews. I just don't want to add an amenity that will end up becoming a maintenance hassle for my super (and ultimately me).

Thank you in advance for all your input.

If you can give me brands and even models , that would be great and suggestions on where to purchase (though I realize this may be tough if you are not in NJ).

http://www.reallycheapfloors.com/engineered---800

Make sure you look at the First Quality or Blue Label grades. Cabin grades is not usable and builder grades often have some issues with pieces that will increase you install cost.

If you do like something you can also request a sample. If you are doing pricing, make sure you figure out the freight with them as well so you don't waste time if it won't work with freight. Again, the caveat is that they worked well for me for larger order and to make sure you order samples if something looks good.

Try Chen Depot in Jersey City or in North Brunswick Best One Kitchen Cabinets.

For hardwood flooring -its tough. You have to look for deals and get them. There are mills in VA and other places where you can buy bulk and it will be cheaper but it only works if you have like 4 thousand square feet at a time due to high shipping costs. I was able to get some really good hand Shaw scraped Oak for $2. Cheapest elsewhere was $3.25. My suggestion though is to just stick to sales locally and find the best deals there. Whatever you buy, make sure you do a good test and check that it won't get scratched up and look like *&@#$# in 2 years. I get samples and key them, scuff them throw stuff. For the mid-end apartments, I've switched to the Luxury Vinyl instead of hardwood and this costs about $2/sq. foot and is easy to put down and have gotten great reviews from renters. Looks like hardwood but very resilient, waterproof and easy to clean.