Newbie looking for 2-family to house hack in Jersey City, NJ

[Kit Williams]

Hi Everyone,

I decided to join the BP family as a pro after the newbie webinar. I've got to say that I am very excited not just because of the financial possibilities REI can bring me but that I am learning a new knowledge with so much resources readily found here in BP.

I am looking to get my first 2 family to rehab and house hack in Jersey City or Brooklyn and rent the other unit out. My budget is 500,000 sales price; 10-15% down payment. I can get private money for the rehab cost but I need to find a good deal first. So I have been doing some research focusing in Jersey City and spent hours looking at properties. I tried using the rental calculator in BP to analyze the deals. However, they all turned out to be very bad deals. I guess it's because the properties are very expensive to start with, and the rent of one apartment is not enough to break even.

So I started to look at distressed properties on zillow/realtor. I gathered that distressed properties are those listed as fore-closure or by auction. I am just wondering if it is wise to even consider fore-closure/auction when I just starting out? I understand there are a lot of legal procedures involved. But it seems that only these deals are cheap enough for me to rehab it and rent with my budget. Or should I simply just look out-of-state?

I have tons of questions in my head and I am reading so much to find answers. I think it is just easier to post here and really be part of the community. Welcome all opinions.

[Ryan Paltridge]

Hey Kit,

Welcome to the BP family! I live and work in Jersey City and still think their is a lot of room for growth, but depends what part of the city you are looking at. Downtown is a desirable place to live, but its very saturated in terms of investments. Prices have risen drastically and its becoming harder and harder to find deals there that cash flow. Small 25x100 lots are going for millions of dollars now. Heights has seen a lot of investment in the past few years, in addition to bergen-lafayette which has thousands of rental units being developed currently. Investment is slowly creeping into greenville section, though there are parts I would not recommend walking through, as it can get pretty rough. 

Ive been to the foreclosure auction for Hudson County, and there are deals to be had. With that being said, i've seen investors get in bidding wars for properties and overpay. All depends on the day, investors, and what area the specific property is in. 

Hope this helps. Please reach out if I can help you in any way!

- Ryan