Anyone doing multifamily investing in South Jersey?

Question

Hey just wondering if anyone is having success in southern NJ with multifamily rentals? I'm currently looking into this as part of my strategy, is the cashflow worthwhile considering the taxes? Also what areas are you investing in? Thanks in advance!

Account Closed · Answer

Finally a SJ thread!  Collingswood is a great area but like all the nicer areas, Taxes have a lot to do with determining cash flow positive or not.  It comes down to the sale.  @Ashley M. should take pride in what you're achieving!

To get the cash flow coming in gotta get the good (hidden) deals or go find the house that needs alot of work when it comes to the "A" rated areas.  I would assume foreclosures would be your best bet in Collingswood area to getting a solid deal from a CoC ROI point of view.  I rent out a townhouse in Cinnaminson for $2100 but didn't buy it as an investment property initially (primary residence at the time) so cash flow doesn't exist bc Taxes, HOA, and other expenses.  I'm looking to un-load this within the year.  To @Joe Sadusky 's point, staying away from the A rated areas is best from a Cash Flow pov.  I personally have no problem with working in the B or C rated areas (ie. Oaklyn, Pennsauken, Mt. Holly's of the world).

Joe Sadusky · Answer

Yeah its a historic town with older houses.

The main street in town is really nice- brewery, restaurants, diner, shops. Overall, Mt Holly is on the rise.  Town kinda has had a bag stigma- but overall its a nice place to live and I enjoy living here. Properties are being fixed up flipped.

Property taxes are not horrible.  I have a large Victorian twin, 2750 Sf, nice sized property. Taxes are $5000.  My two rentals in Edgewater Park are also large twins and the taxes are around $5,000.

Its not Moorestown or Mount Laurel- but its also not bad.  I get great cashflows in both towns.  I dont focus on investing in A graded towns. Usually a lot more expensive to buy into and not nearly the cash flow that I can get.  I have a very comprehensive tenant screening process. As long as you get quality tenants in your properties... its a win in my book. The school systems are nice and there is a healthy rental market.   I've also kinda found a niche market in the large twins and have been able to set and collect top market rent.

Account Closed · Answer

From my point of view not being a realtor, I often do what @Bud Evans suggested.  I'd go on zillow to see properties sold and rent within an area.  With Zillow you can toggle both filters on to view at the same time which is probably an underrated feature.  As I save up additional capital/reserves I often go online and create my own use cases to keep getting better and better at analyzing.  Of course much more goes into it behind the numbers but have good high level analysis shows if you're wasting your time or not.

Also @ Everyone, I'm always open to networking and growing my connections here in SJ as I plan to make another purchase later this year.  One of my goals is to find a Mortgage Broker who has an REI mindset that would listen to my big picture plan and understand that every purchase won't necessarily be independent of one another.  If anyone in SJ has any recommendations of such a connection please share!

Thanks!

Charlie Hampton · Answer

I have a duplex in Salem, for cashflow only.  I don't plan on having any appreciation there unless someone finds oil near by.

Bud Evans · Answer

I use the MLS.  I've networked to establish contacts with several realtors in different areas.  When I'm looking to buy, I get the comps for resale and rental prior to making my decision.  A quick way to check - look at (dare I say) Zillow for rentals in the area and recently sold sections as a quick desktop analysis.  I'm now going for my REA License in NJ so streamline the process.

Good luck!!

Ashley M. · Answer

I have a duplex in Collingswood and am living in one unit am renting the other. Taxes are high but rents are high too. Rent from the one unit covers the mortgage and taxes, and we have excellent tenants currently. I don't think you'll have huge cashflows in the nicer areas unless you can invest in a triplex or quad.

Bud Evans · Answer

Love this thread! Especially the SJ aspect taxes -v- cash flow. I'm working on doors #6&7 right now.  I've gone to contract on a duplex in Oaklyn.

To Ethan's Point, finding the "right" price in South Jersey depends a lot on the taxes in the area.  You also have to consider how much work you do on your property affecting the taxes on that property.

For example, $76000 paid, $50k renovations, ARV $190k when the currently assessed value is 90k. When the township does an assessment, you can probably expect a tax hike.

Joe Sadusky · Answer

@Michael Hartman

Michael Hartman · Answer

Is there a quick way to determine market rents in a particular area to determine the cashflow when looking at properties? Prob a noob question, but what the heck! All these responses from everyone are great, thanks for helping out!

Michael Hartman · Answer

@Joe Sadusky my nephew was born at the Virtua in Mt Holly, seemed pretty nice there. Mostly older houses right? How are the taxes out there?

Anyone doing multifamily investing in South Jersey?

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