How to Start in North NJ.

Question

Hello All,

Just graduated college recently, currently an accountant.  Real estate really draws my interest and I want to know how to get started so the cash flow can start happening into bigger and bigger deals.  My questions basically is how to get started the absolute basics.  Currently live in Essex county, but wouldn't be against other areas in NJ.  From listening to BP podcasts and reading articles what really draws my attention is the FHA loan or the 203k loan, and the road I want to go down is either multifamily under 4 unit rentals or flips.  I have some experience with construction and have many of construction companies I could call.

Some questions that I have:

1)how much money do you need to start

2)Area that are good to start looking

3)Any recommendations

Lastly, I am also interested in networking and learning from people and even open to talk about partnerships.

John Errico · Answer

Hey @Zach Lynch welcome and congrats! There's a nice group of northern New Jersey based investors here on BP.

One part of the calculation that @Alina Trigub touched on is how much money you're making (your debt-to-income ratio)--this will be a determining factor regarding the size of the mortgage that you could hypothetically take on.

I think you're generally spot on with FHA or 203k loan-type options, particularly if you're willing to live in the investment property you end up buying. If you buy a multi-family with a, say, FHA loan, live in one unit and rent the other unit(s) out, I think you'll be well on your way to both getting experience being a landlord and real estate investor, and also saving up enough money for your next purchase.

Northern New Jersey is generally *very* competitive at the moment, particularly in desirable areas. I would definitely familiarize yourself with the various public transit options throughout New Jersey, as even some places that "seem" far away from, say, NYC, are actually quite convenient commutes due to the layout of the trains and buses.

There are usually a good number of meetups and similar that are occurring in the area--you can check out the events section on BP to see if there is anything happening around you.

Best of luck!

Alina Trigub · Answer

@Zach Lynch Congrats on graduating college and making a decision to start investing early!

1) In order to determine how much money you, you have to see 1) how much you have available (cash, credit line, family, friends); 2) how much would you need for down-payment + closing + reno costs. Then determine the gap and think how to cover it. One exampe is partnering up with someone.

2) Area is dependent on you. What your preferences are! Examples include towns with MFH for house-hacking: Kearny, Newark,  JC, Oranges, Bloomfield. Again, it's up to you what you prefer and can afford. Best to stay close to public transportation.

3) Read books, talk to other investors, network, listen to podcast and of course, Take Massive Action!

Best!

Noreen Eddy · Answer

Hi Zach, welcome!!  I second what John Errico said - the trains and buses of NJT (while possibly run by a spawn of the devil) are actually a big factor for tenants and owners alike.  A nearby train station to NYC does a lot of good for property value as well, I do believe.

My hubby and I are owner occupants of a 2-family HUD FHA 203k in Bergen County.  While NJ is competitive, especially in places like Essex or Bergen County, most HUD houses have an owner-occupant-only bidding time - often the first 5-7 days.  We were fortunate because while our house was very popular, we got first crack at bidding before the contractors (piranhas?) had the chance to bid.

FHA 203k is not for the faint of heart - be advised that a good credit score and proof of income are essential, as the banks do NOT PLAY on their forms and applications.  Make sure your realtor knows your plan because the realtors have to have a certain approval from HUD in order to place your bid for you.

All THAT being said, 3.5% is not a lot to put down on a house, and a FANTASTIC way to get started.  We've renovated our way from 10k down into earning 70k in value on our house and re-fi'd into a conventional loan.  Not bad start if you can swing it!!

Ask us anything, we'd be happy to help you along!

Peter Kane · Answer

Zach, I am also a young hopefully soon to be multi family landlord in Essex County, I am also looking at doing a FHA/ 203k loan.  I am mostly looking in the Oranges and Newark, PM me, maybe we can help each other achieve our goals.

Lashawn McCauley · Answer

@Michael Smith It's called S.O.T.A. (Special One Time Assistance) specifically for employed people whom live in NYC shelter system. They must earn at least twice as much as the amount of the rent of the apartment they are applying for. Landlords can put them through credit and background checks.

Joel Haas · Answer

ok NICE

We got Eric on board!

Peter & Odalis how about setting a time and a place and we can all learn from 1 another.

Let's do this in the evening after my self and others get out of work.

Odalis Herrera · Answer

Hey there Zach, it seems as though you and I are in the same position. The only difference being that you've completed your degree and mine is still in progression. I'm from the Essex County area as well and was wondering if there would be a good time we could possibly meet up and learn from one another as well as with each other, as i am open to networking and partnerships as well. There seems to be plenty for us both to learn, get back to me and i'll leave you my email so we can join this domination in real estate. I'm 10 minutes out from the Newark area.

Best regards,

Oddie H.

Ben Ferri · Answer

No previous flips before but anxious to get my foot in the door.

Mateusz Prawdzik · Answer

@Ben Ferri I have a deal In Flanders, if you are looking to do something. Would this be your first time in the rodeo? Or have you done previous flips before?

Ben Ferri · Answer

Hi all, just jumping in to the North Jersey thread as well. I'm interested in flips in Sussex or Morris counties, anyone know investors in that area?

How to Start in North NJ.

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