5 mistakes I wish I avoided when buying my NJ investment property

In 2021, I bought a 2-family property in Jersey City, becoming a homeowner and landlord in one fell swoop and boy, did I have a LOT to learn. I made major mistakes before, during, and after the buying process. I got ripped off, missed major issues during my inspection which turned into costly repairs, dealt with some pretty unscrupulous people, and questioned my decision to buy a home on more than one occasion. To say it's been a bumpy ride would be an understatement. 

I don't say this to discourage you. In fact, I hope it does the opposite. I hope my hard-learned lessons empower young, first-time homebuyers to come into the market swinging! Home buying is not for the faint of heart, but it also doesn't need to be a painful, brutal experience...as long as you know what to avoid. 

Here are 5 things I wish I knew before buying my first property. 

1. Take the number you think you'll need to close and bump it up by a LOT

Prior to buying my home, I fixated on my downpayment and what would be due at closing. Once the ball got rolling, I started writing checks for things left and right. Earnest money, home appraisal fee, home inspection, moving costs, sewer line inspection, pest inspection, chimney inspection, oil tank sweeps are just a few hidden costs you can expect to pay before you even close. And the costs don't stop there. You've watched enough home improvement shows to know the hidden surprises people find when settling into their new home. Be sure you have a healthy emergency fund in tact after all your closing costs have cleared, because sometimes, you're gonna need sooner than you expect. 

2. Hire tradesmen in addition to a home inspector to inspect your home before closing 

My inspector came highly recommended by my best friend. And while he did a decent job, there's a lot things he failed to catch because he wasn't a tradesman. The first time I had a plumber visit my house a few months after purchasing, he was scratching his head as to why I'd buy a house with such shoddy pipe installation. My boiler pipes weren't pitched improperly, previous fixes were clearly done by a non-specialist, and a lot of the pipes were on their last leg. Since 2021, I've spent five figures on plumbing repairs and replacements. Don't be like me! 

The minute your offer is accepted, call up an electrician, plumber, engineer and/or contractor to come inspect the home thoroughly. Home inspectors are looking for major, blatant issues. Experts are going to be able to tell you what to expect a few years down the road and whether something should be replaced altogether. Sure it costs money to hire all these individuals, but I promise you, it will save you thousands in the long run!

3. Get multiple opinions before opening up your wallet

Prior to closing, I decided to get a sewer inspection, to make sure that my pipes were in decent shape. After the inspection, the plumber told me that my sewer line was in awful shape and needed to be replaced, but instead of ripping it all out, he could reline the pipes saving me a ton of money. He pressured me to give him a deposit because his calendar was "filling up quickly." I caved, because I was an anxious first-time buyer and considered the guy to be honest and reputable. Even still, after he left, my gut told me to speak to someone else. I ended up sending the video of my sewer line to a family owned plumbing company. Lo and behold: my sewer line was totally fine. The "dips" the first guy claimed were signs of deterioration, were simply the natural way the pipes settled underground. This kind soul informed me that sewer lines can last over 100 years and to wait until they start failing to fix them. Preventative sewer line repair just didn't make sense. I called the other guy up and told him the deal was off. I lost my deposit, but I saved THOUSANDS of dollars by not listening to one person's opinion. I know, I know, I was foolish for letting him pressure me in the first place, but I honestly didn't know any better. 

Whenever you're getting work done, you want to aim to get 3-5 quotes. The more expensive the project, the more quotes you should get! Not only does it help you save money, but it also gives you insight into the integrity and value of a company or individual. You'll know the person whose price is significantly higher than the other quotes is probably screwing you over and the guy giving you the cheapest price most likely won't do a quality job.  

4. Sometimes referrals from people you know and love turn out to suck

I know this will sound counter intuitive, but not all referrals by friends or loved ones are great. My best friend referred her lawyer, inspector, and pest control company to me. The lawyer turned out to be fabulous, the inspector was decent, but could have done a better job pointing out issues, and the pest control company was the bane of my existence for an entire year. Turns out, the team that serviced her town was completely different than the team that worked in my area. The quality of my service varied from month to month. It was a nightmare. But, shit happens. 

Yes, referrals are the best way to find trusted help, but make sure the person you hire is right for YOUR needs. The handyman who painted your friends house, may not be the best person to install your new floors. The loan officer that's referred to you by your agent could be great at their job, but have a communication style that doesn't work for you. Don't go along with hiring someone because someone you know worked with them once or twice. Do your due diligence to figure out if they're the best person for the task at hand. 

5. Your investment property is not your forever home so stop obsessing over it like it is

Before house hacking, I lived in a 500 sq ft apartment in Queens for 4 years. I went from a quant studio to a 3-bedroom duplex over night. Oh, did I have plans for this place! I wanted to turn the backyard into an urban oasis ($10k would totally do it)! I hated how my bathroom looked and planned to get it remodeled (maybe $8k, it is small). I lived on the first floor with my tenants above me. I couldn't stand the impact noise, so I looked into sound-proofing (got quoted $40k). And the list goes on! I spent a year walking around my place hating it and wanting nothing more than to change it up to MY standards. Completely forgetting that a) this property is a long-term investment b) this is a place I'm calling home for now and c) people that share my bougie tastes aren't looking to rent this place in the future.  

I was stuck in a tenant mindset (Ugh, I hate the color of these tiles!) when I needed to shift to an investment/landlord mindset (Those tiles are in perfect condition and will not deter future tenants). 

No matter how short your house hacking stay is, you deserve to enjoy your surroundings and space. And you can do all that, as long as you stay grounded in reality and remember why you bought the property in the first place. So go ahead, paint the walls your favorite color, put in a cute rug, feng shui the hell out of the place, but for the love of God, don't pay $40K to turn your 100-year old rental property into a luxury condo. It ain't worth it.