Flipping out of state or here in New Jersey?

Question

lately, I’ve been thinking about many different strategies regarding real estate.

I originally did wholesaling for a few months but ended up stopping bc it just took up too much of my time especially with my full time job.

second, I thought of having rentals but I was hesitant bc I live in NJ & the rental laws here aren’t the greatest and it’s hardly any deals that can justify for the rent to cover the mortage in this expensive market.

Right now ive been thinking about possibly flipping properties in my own back yard NJ or possibly out of state where home prices are much lower in certain markets.

Anyone have advice if I should possibly flip properties where I live in NJ (blue state) or possibly go into another market and flip virtually..?

my goal is always to have passive income from rental properties but right now I’m thinking more of being able to pocket cash and later make plans on rentals.

Jonathan Greene · Answer

You said you stopped wholesaling because it interfered with your 9-to-5 too much and you want to flip in-state or out-of-state? Honestly, that is silly and a horrendous idea. Flipping is 10x the time that wholesaling is, in or out of state, and if you don't pay attention you will lose and lose on contractors.

A first flip will take you 2-3x longer than you think, cost 2-3x more than you think, and one contractor will walk with your money at least.

What you are trying to do is to create a side hustle in real estate, but you are biting off things that you don't have time for. Other people will tell you go, go, go, but do not do that. You aren't ready based on what you said.

NJ is one of the toughest flip market in the country now (Northern) because the prices to buy the dumps is high because inventory is low so the spread is too little for new flippers.

Joseph Guzzardi Jr · Answer

@Jonathan Rivera if you thought wholesaling took too much time how do you think flipping a house would be any different?

You can easily lose your shirt if you're not on top of the contractor.

I think you need to consider why you're getting into real estate. If it's wealth building, rentals are the way to go. Do not let NJ rental laws discourage you.

Jeff Henderson · Answer

Hi Jonathan

Im a GC who has done tons of renovations and rehabs in both NJ and PA. From my experience NJ is better for fix and flips than rentals. I have had success with both in PA, but rentals are considerably better in PA than NJ.

Jonathan Greene · Answer

You don't have the time to invest right now per your post so it's about figuring out what capital you have to invest and what is the best use of that capital. Without time, investing in hands-on real estate is a recipe for failure. You could invest in syndications if you are accredited or you could just park extra cash in index funds until you have the time to at least side hustle real estate correctly.

Patrick Nolan · Answer

I’m from Long Island with similar price points and rental laws to NJ. I’ve got some multifam going on Long Island and I’m working on fix n flips in the Hudson valley, as well as new construction spec building.

My two cents of thought is this: if finding properties is so difficult, you have to get on the other side of the problem and profit from being part of the solution. For me that means creating inventory and become a seller instead of a buyer chasing deals. I’m confident long term holds will present themselves along the way, I just need to focus on what can work in the next 12-24 months.

Matthew Ligotti · Answer

I'm also in NJ (Montclair right now but moving to Middletown in a month). Share a lot of similar concerns with investing in NJ. I had a multi but I sold it because returns are really not worth the headaches of an older home from 1907 and it already appreciated 100k+ in 2 years because of this insane market.

Personally I like to be able to pull up to my properties and check on them. The only thing out of state I would consider is PA cause it's still on the up and you can potentially hold and rent anything that doesn't sell for a decent rate where the rules/laws are better. I'm curious what you decide to do but agree NJ is tough and lot of other flippers are in the area putting cash offers on beat up homes before we even see them hit the market.

Jonathan Rivera · Answer

Appreciate the response. What would be a better alternative based on your experience than? I’m open to hearing ideas

Lotus Eli · Answer

Hey Jonathan!

I think you should try to expand to other markets as well. It seems like New Jersey is not aligning with your expectations, especially with the rental laws, difficulty finding deals, and the expensive market. I suggest doing some market analysis to find a market with good rental laws and lower property values, and try to invest virtually. Just make sure you build a good, solid, and competent local team in the area you choose to invest in. When you have a solid team, you can do deals anywhere you like without constant oversight.

One of my mentors does deals virtually in all fifty states. Although there is sometimes resistance, he rarely complains because he’s making so much money!

I hope this helps!

You should connect with me, Jonathan. I am an investor and Program/Project Analyst, currently dealing with something similar. Maybe we can provide value to one another and get out of this rut together.

Flipping out of state or here in New Jersey?

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