All Forum Posts by: John Errico

Looking forward to seeing everyone tomorrow evening!

@Michael Smith could you give us some additional detail? Are you looking to buy? Wholesale? Something else? Approximately where in Newark and East Orange are these places? 

@Cesar Ramirez welcome! Northern New Jersey is *extremely* competitive at the moment, particularly for stuff listed on the MLS (multiple listing service) like you'll likely find on broker websites, reposted on Zillow, etc. Many deals in the most desirable areas go to all cash buyers and are under contract frequently the day, or a handful of days, after hitting the MLS.

If you're looking for deals in the area, I'd either suggest looking in slightly less desirable areas (like, say, parts of Newark, East Orange, other parts of Essex County), and/or positioning yourself and your finances such that you're either able to make all cash offers, or pounce on deals as soon as you see them. You could also seek out alternative ways of sourcing deals, like identifying wholesalers, marketing/mailing campaigns, foreclosure auctions, and so on.

I think it's also valuable to consider that you don't necessarily need to have the absolute greatest deal of all-time for a property to still make financial sense, and for you to get valuable experience as an investor. Some of the precepts that you might hear on BP, podcasts, etc. are not super relevant to investing in north Jersey (at least in my experience), so try to look at deals from a cash flow or cap rate perspective rather than expecting insane returns. (Not saying that you are, but just tempering your expectations). 

One reason why rents/returns are relatively low in the area is that the area presents itself as a fairly conservative investment opportunity. You're basically betting on the long-term viability of NYC (which is why, either directly or indirectly, most people are here) which, at this point, is probably a pretty great bet. So, in return for needing more money to sort of play the game, and for somewhat compressed returns, you get a pretty stable asset: it's unlikely that property values are going to absolutely crater (although some parts of NJ have experienced this), and I think even more unlikely that rents are going to crater. If you buy a property now that makes sense regardless of property appreciation, you can probably rest assured that whatever rent you're getting or expecting to get is going to be, at worst, stable for the foreseeable future.

Hey @Zach Lynch welcome and congrats! There's a nice group of northern New Jersey based investors here on BP. 

One part of the calculation that @Alina Trigub touched on is how much money you're making (your debt-to-income ratio)--this will be a determining factor regarding the size of the mortgage that you could hypothetically take on.

I think you're generally spot on with FHA or 203k loan-type options, particularly if you're willing to live in the investment property you end up buying. If you buy a multi-family with a, say, FHA loan, live in one unit and rent the other unit(s) out, I think you'll be well on your way to both getting experience being a landlord and real estate investor, and also saving up enough money for your next purchase.

Northern New Jersey is generally *very* competitive at the moment, particularly in desirable areas. I would definitely familiarize yourself with the various public transit options throughout New Jersey, as even some places that "seem" far away from, say, NYC, are actually quite convenient commutes due to the layout of the trains and buses.

There are usually a good number of meetups and similar that are occurring in the area--you can check out the events section on BP to see if there is anything happening around you.

Best of luck!

Hi guys! We're doing our monthly meetup for Hudson County (Union City, West New York, Jersey City, North Bergen, Hoboken, Weehawken, Bayonne, etc!) and north Jersey based investors starting at 7 PM on Tuesday, June 26, at the Houlihan's in Weehawken (1200 Harbor Boulevard).

We usually have a great group of people come with the goal of networking and informally chatting about real estate. We welcome anyone to attend, ranging from complete novices to experienced real estate professionals!

As always, there is no fee to attend, and we won't be pitching of any products or services.

Hope to see you all there! Additional information can be found on our Meetup page for the event: http://meetu.ps/e/FkryK/7SbSz/f

@Ricardo Diaz I think both are good options for different reasons. I see New Haven as a long term play, with Yale and the other schools there continuing to expand/buy up more property and improve the area. This has already happened in the past 20 years (to New Haven's great benefit), and will definitely continue. The #2 largest endowed university in the nation is going to wealthy and around for a very long time, and will continue to expand. If you can buy cheaply in a somewhat less desirable area now, but still arguably within the someday-Yale bubble, and cash flow OK for now, I think that's great (and you can probably do better than "OK" if you are patient, though the market is competitive).

Bridgeport's proximity to NYC is a huge boon. As more and more people get displaced from from NYC due to high rents, CT and NJ are going to benefit, and have been already. CT's relatively lower taxes than Westchester or NJ are also a big advantage. I'm not entirely sure if there's a similar "thesis" for Bridgeport as there is with New Haven and the universities, except for its proximity to NYC (which, obviously, is super great). 

If I were you, I'd probably look to New Haven, just because I think essentially betting on Yale long term is a strong play... but I think both offer compelling options. Good luck!

Hey @Maicoll Gomez Noriega: yea I think your suggested idea may work (obviously, if your Dad actually wanted to buy a house in his own name!). As you might be aware, banks will look to your (or your Dad's) debt-to-income ratio: so basically how much debt you have or will have after the mortgage relative to how much money you make. Most bank won't lend to you if this ratio is above 43% (there are some types of "debt" that may not count towards this ratio, and some types of "income" that won't count as well, but that's the basic rule).

But conceptually: if you or your Dad had sufficient incomes and little existing debt, I think your idea is great--it's what people on BP call "house hacking" (living in one unit and renting out the other). It'll be hard to find a good deal in the area but conceivable. If you're willing to look a little bit further out, like closer to Newark, there are probably more attractive deals for doing that, and you could still hypothetically be on an NJ transit line to Manhattan and/or the JC area, or you could pretty easily drive.

What sort of work are you looking to do?

Hi @Maicoll Gomez Noriega welcome! Are you looking for a place for you/your family to live in, or as an investment? I second @Juan Cabrera's advice, though it may be difficult to get approved for a mortgage if you don't have a job/income. Most traditional banks will want to see at least several years of job experience or equivalent (although if you were in school, the time you spent in school can count towards this). Point being: you may be best served by finding a traditional/W-2 job and working in it for a bit before exploring buying a place with traditional financing. Assuming you're going to be living there, you could hypothetically qualify for loans where you could put as little as 3.5% down (an FHA loan), though it depends to some extent on your income/debt-to-income ratio.

If you're looking for something a little less traditional: $50k probably won't go very far in Hudson County, even if you're looking at a small condo or a place that requires substantial work. If you're willing to go further out into New Jersey  (say, west or north/northwest) it's conceivable that you could find a place you could buy all cash for $50k. If you're thinking about this as an investment, you could hypothetically partner with other real estate investors who might be able to qualify for traditional financing but be looking for cash.

Good luck!

Hi @Alyssa Strumolo welcome! There's a great community of northern New Jersey-based investors on BiggerPockets. I would definitely check out the Real Estate Events and Happenings section as there are usually several different events for local investors every month, and they're generally great for meeting people involved in different facets of the industry to build out your team.

It's certainly challenging to find good deals nowadays in the area--there's a lot competition, and almost everything you'll see on the MLS will be relatively overpriced (and/or gone within days/hours of being posted). There are a lot of wholesalers in the area (many of whom are also on BP) who range in quality, but that might be a good place to start looking for deals. Having quick access to cash will also be very helpful particularly on more competitive/desirable properties. If you're OK investing/flipping in areas seen as less desirable, there are opportunities in areas like Newark, Elizabeth, East Orange, etc., although some of these areas may be a bit much for your first investment.

Having said that: I certainly wouldn't be intimidated by competition and would encourage you to "take the plunge" and buy something, even if it seems like it's not the best deal in the world. A lot of times, investors who are just starting out seem to get stuck in a sort of analysis paralysis mode, where they become obsessed with finding the best deal of all time, instead of just finding something that works (I'm very guilty of this too...).

Best of luck!

@Eric D. I'm a little late to the thread here, but I second the recommendations of others here on expanding your search. There are opportunities throughout New Jersey but, like many other investors, have found that the buy and hold opportunities in, particularly, north Jersey (Hudson County, Bergen County, etc.) are few and far between, and require a disproportionate amount of capital and effort relative to other areas--particularly in the past 18 months or so. 

I've been looking a lot more closely at south Jersey (Atlantic County and surrounding areas) recently, and have been finding interesting deals that are, among other things, a lot less capital intensive. Not a ton of investor activity at the moment, but a fairly strong/growing rental market. It's "only" about an hour and a half drive from most parts of north/central Jersey.