City of Orange, NJ - Is It Good for Multifamily Investing?

[Mark Dresdner]

Hello Fellow BPers!

I am wondering if the City of Orange, NJ is a good town for multifamily investing. On one hand, there are signs of the town improving and cap rates are decent. However, on the other hand, the crime rate is high and there are many empty buildings. 

Do you have a view on the town's multifamily investment potential -- considering the current situation and potential changes in the future?

Thanks!
Mark

[Janel F.]

I'd say it depends on the numbers and your comfort level in owning the property.
I bought a property in one of THE WORST neighborhoods in Brooklyn. The property cash flowed immediately, continues to cash flow well and has doubled in value in 4 years. It's still one of the worst neighborhoods in Brooklyn. I wouldn't want to live there but my tenants do - and they're not social program tenants. When I bought, my house was the only renovated house on the block. Since then, some of the original neighbors have gone and at least 6 other houses have been rehabbed and sold.

I'm currently looking in east orange because I see some of the same things happening there that I saw happening in Brooklyn while I was still hesitant to buy. 1 - a lot of development, 2 - a new tenant/buyer pool. I'm a native brooklynite and Brooklyn was always frowned upon until after 9/11 when people got scared to live in Manhattan. As the Manhattanites started moving into the Brooklyn neighborhoods closer to Manhattan, the Brooklynites started getting pushed further and further into Brooklyn . . . And fast forward many years later people are starting to get priced out of Brooklyn and Manhattan. Where are they going? I know of many people that have now made Jersey their home - I actually have a tenant looking to buy in Jersey because he doesn't want to be a renter but he can't afford to buy in brooklyn yet brooklyn is where his roots are and where his family is. Are people moving in droves to orange and east orange? No, but it's likely only a matter of time before they get priced out of the areas closest to the city - those areas are already pretty pricey.

So I'm cool with finding a good block in a not so great area but developing area, providing a quality product, finding solid tenants and watching my cash flow increase over time.

Just my .02