looking to buy my first rental in NJ. tips on where to invest.

[Valerie Joseph]

I am a newbie. I am looking to buy a multifamily to house hack.  I am currently renting in the central jersey area. my difficulty is not knowing where in new jersey, which city to invest. I want a good neighborhood, good tenant. the property tax are so high. North Jersey tax and price are ridiculous. south Jersey is a little better. I was told that Delaware County, Pa is good on rental. So now am all over the places. Not sure where to begin looking. thank you 

[Vaughn Smith]

Replying to an old post here, but the answer may help someone out. Here are some preliminary things you should think about when selecting your rental market for people interested in getting started:

-Budget: I mean a real budget, not how much you'd like to spend, but how much can you actually spend think about budget in terms of purchase price, down payment (20-25% of purchase price), closing costs (budget in an extra $10-12k), due diligence/inspections (budget $1-2k) and cash reserves (6-12 months of mortgate payments)

-Property condition: Do you really want to do a renovation? Most new investors want to take on a renovation project to force appreciation, sometimes it isn't necessary to do so or they really don't have the stomach for it, which is ok, you can find properties that cashflow without the need of a renovation, you'll just have to search a bit longer or in an area other than where you initially intended to invest. P.S. not all renovations lead to changes in property value or increases in rental income that warrant the work 

-Partnership: If you're looking at C&D locations but they terrify you, or you're looking in an area where your budget doesn't seem to match the inventory, maybe your first deal should be a JV. Theres nothing wrong with partnering with a likeminded investor to help to reach your financial objectives, this doesn't mean you'll need to partner on every deal, portfolios take time to build its ok if a few deals in your portfolio are JV deals and eventually if you decide to go into commercial deals you'll see the need for JV deals may increase. If you partner with someone else, the increase in buying power may open up entirely new doors and help you choose locations that you couldn't buy into before

Hope this helps