Looking into NJ Multi Family Homes

[Christopher E Renna]

Hi my name is Chris! 

 I am just starting a full-time job in Northern NJ and have recently become interested in multifamily units.  My goal is to purchase a unit within the next year or so.  I hope to live in one of the units while renting out the others.  This is my first time getting into real estate so I'm constantly learning new information everyday from the research (ultimate beginners guide and podcasts) I have been doing.   I do have a few questions regarding multifamily units specifically in Northern NJ since I plan on commuting into work from that area.    

- Does it make sense as a first time buyer to go straight for a multifamily unit partial rental as opposed to a single family home flips? 

- Does it make sense property tax wise?

Thank you for everyone's time!  

[Alex V.]

@Christopher E Renna there are a lot of towns in Northern NJ where MF properties make sense. The more units the better, as the property taxes don't scale 1 to 1 to # of units, i.e. the property tax per door is typically lower with 3 & 4 units. In the NYC area the cash flow isn't great compared with other areas but the appreciation and rent increases over time can make the deals very attractive over the long run.

Flipping houses is an entirely different beast. It's a job more than an investment strategy. It's all about deal flow as opposed to building a balance sheet.

Since you're in the initial research phase I highly recommend reading Set for Life and The Book on Rental Property Investing. Also check out the older podcast episodes with @Darren Sager (E:048) and @Sunny Burns (E:210) for insight from Northern NJ investors.