Where would you invest if you were in my situation (Live by Nyc)

[Andrew Giunta]

Most of the books I read and people on forums like biggerpockets are either investing in low priced markets or buying homes for a long term appreciation play. Im in Bergen County NJ and cap rates are abysmal. If you got a mortgage you probably wont even break on 95% of the properties I have been looking at.

Single family plays are near impossible here, the land and taxes are just too expensive. Im not looking to flip but rather buy and hold. I dont want to be a 3 hour flight away from my properties as I would like to at least be within a 4 hour drive if something went horribly wrong. I would use a property manager as well.

Eventhough im in a better position than most to invest (500k cash) it seems like most markets anywhere near me are either dying but have decent hypothetical returns or are way too far out of range for investment. I would love to hear what someone would do in my situation if they were just starting out. Ive been staring at properties for half a year now, but I just don't know where to start. My goals arent appreciation plays, I need to get at least a 6.5%-7% cap rate with appreciation or if higher than that I could care less about appreciation.

Where would you personally invest if you were in my shoes?

[Kevin Hill]

I think the market in Bergen County right now is over inflated. If you are in real estate for the long haul, I would park my money on the sidelines for now until the market turns. Keep looking for the right deal in the meantime, but be patient. Buy low and it's very hard to find those good deals right now. It's too much of a seller's market and we are experiencing low housing inventory levels. There is increased competition from owner occupants on properties that are listed on the MLS, who are often outbidding investors. There are a lot of signs that we are nearing the end of another real estate up cycle. We hit the bottom of the market in Bergen County back in the 1st quarter of 2011, so it's 7 years later of rising home prices, it won't last forever. Just like the stock market, the real estate market is cyclical.