All Forum Posts by: Stefan Tsvetkov

I commute to Midtown Manhattan daily taking the bus through Lincoln Tunnel. Light Rail + PATH is in my mind dramatically inferior for anything say north of 34th Street in Manhattan, and even for lower streets closer to Midtown bus + subway seem to be at par.

My take is taking the bus where the distance to the city is short enough (such as from near 30th street in Union City, or most places in Weehawken) works very well even if adjusting for any volatility/absolute deviation due to traffic.

There is a psychological barrier with buses, where the latter are perceived to be significantly volatile vs subways, though I have observed decent volatility with subways as well. There are some good reasons behind this perception as much any distances traveled by bus above say just 3-4 miles can have significant absolute deviation (traffic delays appear quite evenly spread across the short distance from these towns, not just "getting stuck in front of tunnel")

That said much of Union City/Weehawken are impressively close to Midtown Manhattan from a pure distance perspective (within 3-4 miles) and most of Jersey City except Downtown can't hold a candle to their commute times to there in particular. I think these two towns deserve a much more prominent spot on the NYC metro "commuters' perception map".

I used to live in Brooklyn (as another comparison point) and my commute length and quality improved dramatically since moving to the area.

@Todd James Denman Congrats on executing such a great deal! I am interested in similar projects in NJ in areas with high condo demand / discrepancy between multifamily and condo pricing. 

Numbers appear high level comparable to the ones above, though both purchase price and renovation need to be financed on hard money, significantly increasing the carry costs. Customarily, hard money lenders need a first lien on the property they are financing and would not accept a prior mortgage.

What was your specific lender / approach to obtaining the private hard money? Did you use friends and family for this?

Yes, what @Theresa Harris is pointing is a consideration, as generally for an investment property (or the latter portions of a primary residence, such as in the case of a multifamily) one can deduct pretty much each and every expense (cause it is a business). Not so for expenses that pertain to your owner occupied portion.

That said, to my knowledge mortgage interest is deductible on both primary residence (within certain limits) and investment property, it just gets claimed in different sections of your tax return. Thus, in many cases you may be indifferent as to whether you would pay off an investment property or a primary residence quicker from a purely tax deduction perspective. 

An additional possibly more important factor besides interest rate (which tends to be higher for an investment property) is call risk for the mortgage in the event of a market downturn. 

Generally there are more protections in place in the case of a primary residence. Paying off the investment property mortgage and lowering LTV on it may be safer from a call risk perspective unless the baseline LTV of your primary residence is higher (or say significantly so).

Price growth in JC Heights has been indeed scary reaching to nearly 100% for the last 6 years according to Zillow data (although the latter seems to have a significant upward bias compared to Case-Shiller price index in regions covered by both). 

With most of JC except Downtown being in my view “not nice”, JC Heights has gotten significant  traction as the relatively acceptable Downtown alternative. I always found the latter less visully appealing  than the upper “Latin” towns of Union City, North Bergen and West New York, though my opinion appears to be in the minority. 

JC heights belonging to the large investor-friendly city of JC is though miles ahead of the above in its pure market development (even if may be in a bubble at this particular moment). The latter has reached fruition in a high condo demand in the area with new construction (and even renovated) condos selling for the price of a multifamily in most other areas of Hudson County.

I agree with some commenters here, Craigslist appears to have lost most of its market share to Zillow generating in my case ~10% of the volume of responses that Zillow does.

The sheer volume on Facebook marketplace is though in my case nearly 10x that of Zillow (would mean 100x Craigslist indeed). The quality of the leads may be low as as only some of them represent genuine interest in your property.

That said, I recently had to rent five of my units short term for 3 months and was able to rent all of them through Facebook marketplace. So grateful I learnt about the latter from a friend of mine. I am convinced I would have still been looking for a full set of five tenants had it not been for Facebook marketplace.

Another mention I was recently informed of is Cozy, which syndicates to Realtor.com and which in my cases generates lower volume in line with Craigslist or a bit higher.

@Jason Setzer Yes, meaning they do a cheaper online/desktop appraisal internally pulling comparables electronically and not sending an actual appraiser to the property. Respectively, there is no official appraisal document you receive, just a figure for the value of the property. 

It is a late response, though hopefully this would benefit anyone trying to finance a non-warrantable condo. Fannie/Freddie recently removed some of their earlier requirements as to what is a condo that qualifies for conventional financing. I believe investor concentration was one of the factors positively affected.

I purchased a 3-unit condo building last year, where condos were nonwarrantable on the basis of investor concentration among other factors, at what I consider to be a "package" price. I was able to finance all three units simultaneously on separate mortgages through Bayonne Community Bank (a local portfolio lender in NJ).

Assuming you are willing to part with a 20% down payment, it shouldn't be hard to finance a nonwarrantable condo through small local lenders that hold the loan on their portfolio and do not sell it to Fannie/Freddie.

Weehawken is definitely considered the nicer town and also its demographic is less homogeneous compared to Union City. Commute to NYC is on average slightly briefer for Weehawken compared to Union City, although this would depend on the particular spot you are in.

The waterfront newer construction is in its own league and so are Boulevard East properties with NYC views (even if the latter may be older buildings). The only apples-to-apples comparison between the two towns would be the area up the cliff inland and excluding Boulevard East. This area is greener and prettier in Weehawken compared to Union City and, well, it belongs to a trendier zip code.

From an investor perspective, Weehawken is not particularly more 'investor-friendly' then Union City, nor it is booming with new construction. Its rent control and vacation rental ordinances seem even stricter than Union City. In my mind, broadly speaking Weehawken has stronger appreciation potential than Union City, where its appreciation would come from being an already established nice area with great proximity to the city. More so than investor-driven appreciation/new development.

@Devin Wynn I own two properties in Union City, one of which I purchased primarily as a "high cash flow" property. Union City is definitely not an investor-friendly town and its rent control, vacation rental ordinances are no match for investor-booming Jersey City. Comparatively, there is little condo demand or new construction going on in Union City. I hear obtaining construction permits or dealing with the Building department is a hassle as well. 

The mayor appears to manage the town in a notably "communistic" fashion, supporting lower-income Latin voters (e.g. my house receives four turkeys each Thanksgiving holiday) and discouraging external investment. Property taxes are among the highest in NJ, especially for a town lacking a strong public school system.

Nevertheless, Union City proximity to Midtown Manhattan is truly great, it is a densely populated area, and there is a Light Rail train to the PATH as well. Assuming the cash flow is strong, Union City is definitely not a case where you get a high cash flow though compromise appreciation. On the contrary, the area has enjoyed significant appreciation over the past 7-8 years.

In conclusion, I believe Union City appreciation prospects are solid with its proximity to NYC and population density, though not so much as an area that booms with development and experiences a major economic shift. The latter is reserved for Jersey City in my opinion.