Paterson, NJ (075 01-44) - Does anyone invest in this area?

Question

Hey BP community,

Angel here - I'm a rookie real estate investor in the Northern New Jersey area. My business partner and I are looking at a few properties in Paterson, NJ and we would like to get someones take on the overall real estate market as of today.

My analysis:

• - Prices are heavily inflated due to the current sellers market but to my understanding.. the prices on houses in the area have been increasing over the past few years now.

• - An 'opportunity zone' for the state of New Jersey that has attracted small business investors and a large pool of real estate investors as well.

• - Most homes don't seem too developed... which leads me to think... appreciation is mostly because of the land the home sits on, not the home itself.

• - Playing to my last point, pretty competitive of market real estate (which can result into bidding wars on investment properties.)

• - Medium home value range is in the $340,000 range (My guess based off of a few deals I analyzed but would love to hear everyones thoughts!)

• - With it being the largest city in Passaic County, it has a population of about 145k

• - I grew up not too far from Paterson (Hudson County) and I've heard some quite unpleasant things about the city (could be a bit rough in certain areas)

Given the overall market, we believe for the right price and area; Paterson can be a lucrative area to invest in.

Would anyone like to add to this analysis? Any investors in the area who can pass on some REI wisdom?

Much appreciated!

-a

James Lloyd · Answer

My fiancé lived near St. Joseph's hospital for over a year, and I got to explore the city a bit as a result (go to parks, drive around, etc.). @Jonathan Greene and @Paul Daniels have already pointed to the primary problems with the city. I'm sure if an investor spent some time in finding a decent block or neighborhood to invest in, then he/she could find some half-way decent rentals, but I would not invest without having someone investigate the neighborhood first. Some parts of the city are no-go zones.

I would agree that the prices in Paterson are inflated given the status of most of the structures (a lot of dilapidated buildings). I think the landowners are waiting for a gentrification developer to come along and pay inflated prices. I don't know if its a competitive market because there are a lot of properties that spend a lot of time on market from what I have seen.

If you do visit Paterson, go to the Great Falls, it is a really nice park/waterfall.

Jonathan Greene · Answer

There is not scalable growth for buy and hold investments in Paterson because it has never been able to get upgraded the way it wanted to. Everything is block specific as in you could have a good value on one block and bad values on one just a couple away. Prices are too high for flipped properties and they will go into foreclosure when the market turns. Similar to Newark, there are parts that are better than others, but such a big city lures in investors and then they don't even want to go be a landlord for the reasons @Paul Daniels said.

Paul Daniels · Answer

We have done work in Patterson and the city is a disaster. The Building Dept is very difficult to work with. They are so understaffed half the time they do not show up for Inspections and never answer or return calls. Our properties were broken into on a regular basis , we dealt with squatters as well as some other nonsense. The money made at the time was not worth the headaches. It would have to be a tremendous opportunity for me to work in that area. ￼

Gary Mazzarella · Answer

I find it hard to invest anywhere in NJ . I buy rehab an sell in AZ, the climate for business there is so easy to work in . No ridiculous inspections from the towns or c/o issues to deal with . Take your money and look out of state .

Joseph W. · Answer

How about riverside ?

Paterson, NJ (075 01-44) - Does anyone invest in this area?

Paterson, NJ (075 01-44) - Does anyone invest in this area?

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