Multi-Family Investment - NJ or Queens

[Ben Mathew]

Hello Bigger Pockets Community. New to this site & multifamily investing. I am looking to purchase a 2-3 family home at around 650k -750k. Will not be house-hacking but looking to buy & hold. 

Current areas of interest at New Jersey (North Bergen, Union City, JC) or Queens. Would appreciate any feedback & recommendations on locations to narrow my search. Thanks!

[Alexander Szikla]

Why not house hack? You only need to live there for 1 year. 

If you can get a 4 unit and a basement, that would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield.

Personally, I am very bullish on New York and NYC itself. Sure it suffered due to COVID, but you want to buy when there is distress. I think all the folks who moved away are already getting bored and already coming back. Plus, the vaccine is getting rolled out which will curb the spread tremendously. Now is the time to buy. NJ by comparison is very pricey. 

I'm comparing yields for the record, not absolute dollars. 

Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. Nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.

Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.

If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!