Is it possible to get a good cap rate in New Jersey?

[Christopher Cordero]

I'm super new to real estate investing so please go easy on me :)

My wife and I went around some open houses for duplex units today in the northern New Jersey area along the PATH train line (Harrison, Newark, East Newark, Jersey City). We came across one that was really fabulous and wonderful and we strongly considered maybe getting an FHA loan to buy it, but before doing so, I sat down to crunch the numbers.

Turns out, the property taxes in New Jersey is really high... for this one particular property, the pro forma annual taxes in the listing was $16k.  Assuming I could rent out one side of the duplex at a monthly rent of $2500, the property taxes would eat into the gross income pretty heavily, and after considering maintenance costs and debt service, it was just clearly a bad deal for us.  I worry that this is going to become a recurring story for us as we look around New Jersey.

How are other NJ investors dealing with this?  Have all the good deals in the area evaporated?  My wife and I are still pretty new at this so maybe we're just not good at finding deals that make sense yet.