All Forum Posts by: David Thomas

Also a third option: partner on deals with a builder/contractor so that you have a solid idea of your cost per sq ft when making offers. 

Majority of what you are seeing is in fact cash buyers moving very quickly on anything where a decent margin exists.  Often times you’re competing with buyers who are builders/rehabbers themselves.  Most people can’t compete with that.   It’s  been like this for more than two years in much of Central/Northern New Jersey.  

The only way to compete is to move fast as soon as something comes on the market, have cash or Hardmoney lined up, and be prepared to go over asking. And be really precise with your rehab costs and ARV.
Otherwise your next best option is doing owner occupied single/multi families that are outdated , or finding HUD properties that give owner occupants first bid.

Lastly, patience and eventually you’ll get one under your belt. Sounds like that worked out for you in the Midland Park deal.  Congrats!

This question has perplexed many for years and always gets a mix of answers.  And depending on who you ask you will get resounding answers that they are sure are correct (agents, inspectors, appraisers, lawyers, friend of a friend a friend who knows the mayor, etc, etc).  First, local building codes may have their own requirements that are more stringent so that's where you need to go, and that's who you should verify with first. Take five minutes to call the local building dept. and you should get a quick answer.

I can tell you what HUD defines as a bedroom for appraisal purposes, coming directly from the National Association of Realtors and part of the CMA class offered by NJAR (New Jersey Association of Realtors) and when doing a comp analysis, as this:

1. 90 square ft minimum
2. Window for emergency exit (local codes dictate size, ie: 5.7 sq ft clear opening)
3. Natural light and ventilation (ie:window)
4. Hallway access (direct or tandem such as a railroad style unit)
5. Closet NOT required
6. Heat source NOT required (I asked twice, I was shocked!)

Screenshot below from NJAR:

My last thought - what would the average person expect in a bedroom for a comfortable living arrangement?  I would want more than the"legal" definition thats for sure!  Like heat and some form of storage.  It's surprising how many homes or apartment listings call a room a bedroom that the average person would not be comfortable with, but can fall under the legal requirements.

@Altamar Knighton. Feel free to check out my info and reach out if interested. Working with several investors currently.

@Abiy Birhanu. A few additional avenues that you can try that have helped me connect and build contacts: post ads on Craigslist that you are seeking properties (no agents) - you’ll get property owners and wholesalers here; Facebook groups; cold calling owners in a geo that have equity or owned the home for 5 years or more ( I get this free as an agent but you may need Listsource as mentioned / or other paid services). Deal Machine app. Advertising, marketing/signage.

These all take time to build but will help you network and find properties & people. Also as noted competition is fierce for properties in NJ right now, so being able to move fast is essential to secure a deal.

Best of luck.

@Tiffanie Grinage. Reach out to attorney/investor @Jessica Zolotorofe and for closings Clear Skies Title based in Cranford (they work with many investors and wholesalers) clearskiestitle.com

Hi Militiana,

I think the most important thing to ask and for folks to help answer this is what are your goals in real estate investing? From there identifying one or two areas that would make sense for you to invest in geographically. To get started in real estate for $25,000 will basically get you a down payment but very little room for ongoing expenses, repairs, other risks. I would recommend you find an area that you would want to live in and consider a house hack of a 2-3 family home. This way you might be able to do an FHA at 3.5% down, but you really should check with a lender considering the lack of income history. That will be a major challenge for you.

Other options include finding a Commercial/investor friendly mortgage lender that approves based on income generation of the property itself.

Regarding tax lien investing, there are folks here on this forum that are savvy investors that can speak to it. I am not one of them.  However, tax lien investing has always been made to sound appealing but it’s a significant risk and one I personally do not recommend for a beginning investor.  If you are only looking to use tax liens for a return on your money, and not in hopes to buy the property (and all of its potential problems, other liens, repairs, eviction process, etc.) then it can be a viable long term option for growing your cash reserves.

 A quick Pro and Con list is here: https://www.investopedia.com/a...

Hi Jon,

This link from the State of NJ gives an explanation.  Minimum notice is 30 days on month to month, but as with most any lease you would provide the tenant an opportunity to renew at the new rent and terms.   Personally I believe that good business practice as a LL is to give at least 60 days as a courtesy to the tenant to allow them time to plan and find a new home if they opt to not renew.  If they are good tenants you may want to try to keep them in this current environment. 

https://www.nj.gov/dca/divisio...

Our brokerage in northern NJ has been receiving a lot of buyer interest from folks looking to move out of the NYC area to the suburbs in central and northern NJ, where the commute is within 1 hour.  However, I don't have data or statistics (and haven't seen any reports elsewhere) to show how much is simply pent up demand vs a shift a major shift in behavior.   My market has always had a demand from people moving out of the cities in the NY metro region, but time will tell if this is a major change for the long term. 

@Robert McCormick As you search for single family homes in Northern NJ you'll find the same challenges as looking for a duplex: high prices (and climbing higher even during the pandemic right now), extremely low inventory, or major work needed. Also, to find a single family with an ideal layout that allows for room sharing in a comfortable manner will be even more challenging in my experience. Do you want separate baths? How about kitchen sharing? Separate entrances? Prefer the rooms on a different floor? It will be a tough process unless you are okay with roommates. That's basically what it sounds like if you are seeking to house hack a SFR and room share. Otherwise, with this current market of very low inventory of all home types, you'll either need alot of patience and an extended timeframe to buy, or look to expand further in geography. This would include higher cap rate or class C properties/neighborhoods that are not on your radar. Ideally you should be working with an experienced investor friendly agent or reputable wholesaler (tough to come by but out there) to help you search and navigate through this.