All Forum Posts by: Ryan L.

Reach out to Fasil Khan. He is with Keller Williams in Wyckoff, but is a Paterson native and knows the area well. 

Hi Dilelvi, 

You should contact @Fasil Khan.  He is a great guy,  and knows Paterson from several perspectives.

Ryan

I invest in Paterson, although in vacant land, a small commercial building, and tax liens at the moment.  My wife is from there and a large part of her family still resides there.  You can't write off the entire city as "bad", which is why local market knowledge is important.  Neighborhood investing is extremely important here.  As a rule though, the 4th Ward (North of Broadway to River St) and the north side (north of the Passaic River to the Prospect Park/Haledon/Hawthorne border) are the highest crime areas.  Secondly, the north side floods horribly as well.

Daniel, you can PM me if you wish.  I know Paterson inside and out as both an investor and from a law enforcement prospective.  Your numbers can make sense depending on where you are buying in the city.  I suspect if you are talking about flooding then the property is along River St or most likely the north side.  If the on the north side, I would seriously look at the numbers again because your numbers are extremely high.  North side got hit really bad by flooding about 8 years ago and is also one of the worst areas for crime.

@joe martella is right on the money.  I just went through this a few months ago.  My attorney was able to speak with the tax office to get the amount through date and they allowed him to pay the taxes.  In this case the seller didn't use an attorney and just used my attorney to draft the sale documents and allowed him to make the payment to the town.  

@Matthew Shay I'm marketing  it myself.  So far It's on Zillow, Craigslist, I have a 3'x 8' FOR SALE banner posted on the property, and I'm sending marketing materials to area commercial contractors, medical commercial contractors, urgent care chains doing business in NJ, and the same for dental.  In my marketing materials I make it clear I'm open to partnering in some way such as a ground lease or other ideas; I'm also advertising it with owner financing.  Taxes are about $2200 a year, although, I'll likely fight the assessment somewhat.  I'm hoping to sell it within about 6 months.  I have a lot of room in the numbers to come down in price and still make a nice profit and I own it outright.  As for analysis, Zillow and loopnet are the best when it comes to land numbers, it's not as easy to comp as homes are.  I also worked off the assessed value.  Lastly, the prior owner purchased it for $40,000 back in 2006 so all in at $12,500 I'm confident I'm fairly safe on my purchase price.

I'm finally ready to post about some initial success after hundreds of hours of forum reading, podcasts, local RE meetups, etc.

The deals:

1) 75 x 95 lot in Paterson, NJ with a billboard.  The lot has never been developed as it's basically a cliff with a plateau sandwiched between a two family house and a boarding house.  It was taken back by the city for taxes and I purchased it at auction in March from the city, but didn't close until this month.  It was not a tax certificate sale, rather city owned property sold with clean title.  Purchase price was $15,400 including auction company commission; all in $17,400 with attorney, title insurance, and other closing costs.  As for the billboard, now that is the interesting part.  The board is owned by a large corporate media company who paid a monthly ground lease to the prior owner of roughly $100 a month.  We are in the process of obtaining the original lease, transferring lease payments, and negotiating a new long term lease as the rent is below market.  The property is ideal for advertising as it's across from the Paterson Great Fall National Park which has been doubling attendees since becoming a National Park several years ago.  The long term plan is to draft an easement in perpetuity for the billboard and then sell the property which can be built on.

2) .5 acre undeveloped commercial parcel with 200' or highway frontage on Route 46 in Budd Lake, NJ.  This property and #3 came about after looking through Craigslist Ads.  I met with the owner regarding property #3 and while talking back and forth he mentioned that he had another property (this property) which he was losing due to a tax foreclosure.  We struck a deal of $10,000 including the payment of the back taxes of $7800 which netted him a little over $2000.  We are all in for about $12,500.  We came down to the wire on this one and closed in about three weeks with only about two weeks to spare before the foreclosure was final.  The prior owner paid $40,000 for the lot in 2006 and I estimate it to be worth $45-$65,000.  The game plan for this property is to flip it or sell it with owner financing with a down payment covering most of my costs.

3) 25x47 lot with 400 SF Masonry garage in Paterson, NJ.  This property was listed by the seller on Craigslist for $30,000.  We struck a deal of $25,000 with the owner holding back $5000 on a note for 60 months at 0%.  The seller financing was more so I could get experience with it and I just figured I throw it out to him and he was amenable to it.  The property is not in a great area, but it's a solid building with a completely fenced in yard (8 foot corrugated metal fence) behind the building with an additional 300' of storage.  No water or electricity and would be for storage only.  What I like is that the doors can be converted back to 9 feet high which allows for commercial vehicle access.  The long term plan for this property is a storage rental.  Rental rates for contractor storage is about $400-$450 per month for this size including back yard and loft storage.  We close in about two weeks.

I'm feeling pretty good about these three properties and am looking forward to the learning process unique to each property.  I'm not much of a fix and flipper at heart and was looking for alternative property niches.  I'll be happy to update the post as things progress and welcome any feedback or questions.

Aaron, although I've only been to the Bergen County Sheriff sale once, I'm told the Passaic sale is similar with certain subtleties.  I have one friend who purchased and flipped a townhouse in North Haledon which he bought at the Passaic auction and did very well with, but he spent 6 months prior attending regularly and doing his due diligence before he ever bid.  Why not stop by our local meeting next week on 7/3 at 7:00 pm.  It's hosted at the Panera Bread in Paramus (770 Route 17, Paramus).  The group moderator attends both Bergen and Passaic regularly and can give you some insight.

Daria,  I'm not sure if your mother's desire is to remain in Paterson, but if it is, the new senior complex (Freedom Village) at 69 Straight St looks very nice and the builders seem to have put in some nice features, the website states apartments start at $1100.  I'm in Paterson a few times a week and do some investing there, in fact at one point I was working on a way to buy the property (car lot) across the street from the complex (deal never got off the ground), so I've seen the outside in person.  Just a thought.

@Wayne Brooks and @James C. Thank you both.  This was exactly the kind of insight I was looking for.