All Forum Posts by: John Papa

 Thank you very much for sharing that information, it's appreciated.  Still trying to figure out the maps you had linked to.  They look to be very helpful.   Is there a way to determine when the well will be capped, or if there are any proposed or expected to go up in the near future?  I was told the ones in closest proximity to the house are to be "capped" by the end of the year, but I would like to verify that myself.

The property is connected to city water, so I guess the issue that could arise is whether or not groundwater contamination has or could occur.  If the house is connected to City water, and not the well I'm assuming that shouldn't too much of an issue.  Also, are there any air contaminants that one should be concerned about?  As someone in the industry, would you have any issue purchasing a home near fracking wells?  It sounds like "no" but curious.

Thanks

Hi All,

After spending time out in Colorado and the surrounding areas, my wife and I are set on moving, specifically the Erie area.  After looking at a lot of properties, we found one we really like and are considering making an offer.  The only thing that is giving us some pause are some fracking sites located close to the home and development.  One site is about .25 miles away, and another about a mile away.  According to our agent, the sites are going to be capped and decommissioned this year, but obviously we will still need to verify.

Does anyone have any experience dealing with fracking sites, or have any insight based on what they have seen or experienced?  Given that I am going to be uprooting my family and moving 2,000 miles away, I want to make sure I am covering all of my bases.

Thank you all in advance,

John

I recommend always factoring property management into your figures.  Even if you are self managing (which you had mentioned) and saving the money.  The idea behind this rationale is that if/when you decide to be more hands off down the road, the property sustains itself and is still cash-flow positive.  

Also, you had mentioned that people are "breaking down doors" to get into the town.  Does that mean there is potential to raise rents?  

That says it all right there..

Montclair is a great town (north of Bloomfield Ave).  I actually just moved from there this past July.  Both my wife and I really liked the town and all that it had to offer, but from an investment perspective it didn't make sense for us.  We made more than 15 offers on properties and were constantly outbid in multiple offer situations.  To a point where numbers did not make sense.  Taxes are extremely high and the market for small mutli's (2-4 units) is very crowded with "investors."  This results in people overpaying for properties and driving prices up to a point where cash-flow hardly exists, if at all.

I can only see the numbers working if you can get an off-market deal.

If you feel that there is too much risk associated with inheriting the tenants, negotiate that the units be vacant upon close.  If I was in a position where I could either inherit tenants, or start from scratch by only renting to new tenants who meet my standards, I would take the new tenants any day of the week.

I believe in NJ, the law requires the tenants are given 60 days notice.  

This can, and should be done during attorney review.  If you are trying to close sooner than 60 days, you might be out of luck.

@Craig N. 

Thanks for the reply.  Apologies for not responding sooner - I was away on vacation.  My experience in this area has not been too extensive.  When I first started looking int he Montclair area, they did not seem too desirable.  The homes were not very well taken care of, and after putting myself in my target demographic's shoes I backed off.  

Did you ever revisit the area?  I'm interested in your thoughts.

Hi Craig,

I made an offer on the property based on what I thought made sense from a cash-flow perspective.  The owner did not accept, and I walked away, as it didn't cash-flow.

The first properties I looked into in Montclair we're in those rougher areas (south of Bloomfield ave) but wasn't confident I would get the type of young professional tenant.  

I'm working with a great agent in the area, and am confident I will have purchase in the January to February timeframe.  Unfortunately, I was too slow on pulling the trigger last week and let a great property slip though my fingers.  Definitely lost sleep over that one.

Where have you seen cash-flow in New Jersey?

Congrats,

Now that you have worked so hard to become debt free, do yourself a favor and keep it that way.

Steven,

I would always run my numbers assuming you are financing 100% of the property.  That's when you see if a property really cash flows.  If you need to cough up cash in order to force cash-flow I would not proceed.

Also, when calculating your annual gross income assume you are only collecting 11 months rent.  

When you run the numbers applying those rules the property doesnt look that appealing.  At least not to me anyway.