NJ BRRRR - can it be done?

Question

I own two multi-families - one in Maplewood and the other in W Orange - each purchased with conventional loans with 20% down. On BP, I hear stories about people who do the BRRRR method and end up with 100 units after 5 years and can retire.

However, in Jersey, I just don’t see how anything even approaching that can be accomplished. Thoughts?

Brian Allen · Answer

NJ is a very unique state - it's kind of like 3 or 4 states in one:  south NJ - lots of sand, pine trees, and flatland marshes..  central NJ: suburbs, cul-de-sacs, farms, & multi-family properties.  North East NJ: multi-families, Condo/HOA/Mixed Use everywhere... NorthWest NJ: Cabins, homes in the woods, hills, dales, rivers, and large lots...  good luck and welcome to BP!  -Brian

Shawn Mcenteer · Answer

@Eric D. BRRRR  is happening in NJ.  To the extent of 100 units after 5 years maybe idk. I think 10 units that all rent for 3k+/month is more like it.  NJ has the ability to get high rents and low vacancies.  Needing 100 units to retire may be a strategy in other parts of the country but not a necessity in NJ.

Ron Brady · Answer

Hi Eric:

My wife and I are just getting started on our real estate investing journey and today we start the first R of our first BRRRR.  We live in South Jersey and its where we acquired our first home. Based on what we've learned so far, particularly with respect to finding properties that meet both our cash flow and ability-to-fully-refi criteria, we envision that our path to financial freedom will take us 10-15 years here.  If we were trying to accomplish this in North Jersey, I imagine we'd need to work harder and be even more creative than we are in South. Good luck to you!

Eric D. · Answer

To be clear, I am not zeroing in on 100 units. I simply mean the BRRR technique does not work here

Alina Trigub · Answer

@Eric D.

I'd say it'd be very difficult to achieve 100 units in NJ in 5 years at this point in the cycle. Perhaps if you wait till the next correction you might be able to do that.

Best of luck!

Peter John K · Answer

Just flip them, no point in fixing up a house to collect 3000$ in rent just to pay NJ half of it in taxes. Make some good money flipping and buy rentals in a warm red state so you can retire sooner without having to partner with the local government. FL is always popular on the east coast and AZ is a great bet with the rising taxes and ocean levels soon 20% of CA will live in AZ...

JD Martin · Answer

Not sure what people you are talking about, but starting with 100k and BRRRing into retirement in a few years is unlikely unless you can live on a really small monthly income or worked like hell to combine that 100k with other resources (sweat equity, partnerships, etc) to grow rapidly. It is also easier/faster to work that route with lower-priced housing, so in that aspect you are correct because (generally) there's a higher return on lower priced houses (but with other risks). So yes, that's more difficult in expensive NJ. But not impossible. Part of it is also whether or not you can afford to leave any money behind. You can BRRRR anything - the question is how much of your money comes with you. If you get to bring it all but 5 or 10k, that shouldn't be stopping you.

Eric D. · Answer

I mean, People on BP share their success stories of using like 100k and then in a few years being able to retire.

It seems nothing even close to that can be accomplished in NJ, right?

Joseph DiNardi-Mack · Answer

Hi Eric,

If there is a will there is a way. It can be accomplished in NJ, but you're going to have to put in a lot of work to find the right deals. The NJ market is extremely competitive and the overall high taxes don't make the strategy any easier.

You're going to need a great agent who can alert you to great deals as soon as they hit the market, as well as be on the constant lookout for those off-market diamonds in the rough.

To get to 100 units, in any state, with the BRRRR takes a constant effort. Finding the next deal and leverage options like a 1031 exchange is crucial.

NJ BRRRR - can it be done?

Most Popular Reply