Hi From Jersey City

[Emily C.]

Hi, I've been investing in real estate since 2007, all in Jersey City, NJ. I have experience as a landlord (I self-manage), some light re-habbing and recently got into flipping. Looking to connect and share info with other real estate pros. I'd especially be interested in hearing from anyone in the downtown Jersey City area!

Edit to add some additional detail:

My first property was an apartment used as a primary residence, unfortunately bought at the height of the market in 2007. Sadly, this property still has not returned to its original value, despite being in a prime downtown Jersey City location. But, on the positive side, this is how I first became a landlord (needed more space, so moved and found a renter).

I bought my first "intentional" rental property in 2012. It was a two-family in semi-decent shape. I rehabbed one unit while living there and the other was rented. It is now fully occupied and generates about $1800/month cash flow.

My second property is both primary residence and rental (two-family). I've done quite a bit of work while living there and now the rental pays all the carrying costs for the building.

My third property was a fixer that I got a good deal on in 2013. It needed a lot of interior and exterior work, but was in a prime neighborhood of downtown and was a unique place. I thought it would take 6 months and would be used as rental when done. Haha, after a year and a half it was finally complete and by then the market had risen so I decided to sell. Kind of an accidental flip. It was an amazing learning experience though.

Now I'm at a bit of crossroads, trying to decide to just keep on landlording (not nearly as exciting as the flip and I'm kind of sick of tenant headaches), go for another flip (so much work), or something inbetween...?

Looking forward to hearing from others!

[Amit Patel]

Emily - Remember that to do a flip profitably, you have to get in and get out and get it sold QUICKLY. It is exciting but remember that you are paying taxes on all the profits.

If you can do flips profitably, you should be able to use the extra profit from the flip as equity in your building and then get financing. For example if you buy a 130K property and put in 70K in construction, carrying cost, etc. =200K basis and it's worth 250K market value, you would have a profit 50k. Take out 12K commission-4K closing=34K profit. After let's say 30% taxes, you keep roughly 24K.

If you finance, you can get a loan for 175K and only putting down 25K into the property and will have the full 50K in equity.  Assuming 7K Net, you can hire someone to take care of issues for the 2K and you will net 5K a year on 25K down, which is 20% return for a year for all your hardwork. If you can do this 20 times you have 100K in income and $1,000,000 in equity.

I know the numbers may be off here and there but work out what a normal flip will make and do the math. We keep a building super and I have a partner that does to make sure taxes are paid, rents are paid, etc. and work with the accountant. I do earn less, but I scale much easier and look for properties, etc. rather than worry about tenants.  I think if you can do the flip to add value and then just hold on to it and let someone else manage the tenant stuff, you may get the best of both worlds.

I am only in this business 2.5 years and may be totally wrong on some aspects of the flip as I haven't officially flipped but just rehabbed from scratch so would love to hear others chime in :)