All Forum Posts by: Mike Bonadies

@Jason Clarke There are many properties that pass the 1% rule. I own several units in the area and all of them pass the 1.25% rule which I personally use in a pinch. Areas that have properties that pass the 1% rule (and sometimes even the 2% rule):

Gloucester County (certain towns)
Salem County
Cumberland County (Bridgeton, Millville & Vineland)
Camden County (certain towns - Camden, Gloucester City, Lindenwold, Clementon, Brooklawn, Pine Hill, etc...)
Cape May County
Atlantic County

The more north you get the harder it gets to find good cashflow deals but they still exist.

@Account Closed I wish you best on your RE journey! I'm a local landlord and I own a handful of units across Camden, Gloucester, and Cumberland counties mainly in B- to C- neighborhoods. Here is my two cents:

Is Camden viable? - Absolutely, housing prices are relatively low and so are taxes while rent is fairly high. Camden properties will cashflow if managed well. You can pick up doors for sub $50k. Taxes can be be lower than $3.5k (some are as low as $2k). Rent on a SFH can be anywhere from $900 to $1300 depending on the details of the house.

Is Camden right for you? - This a much harder question. While the numbers look appealing there is a reason for that. I can't remember the stat exactly but between 2000 to 2010 Camden received the award of being the most dangerous city in the nation by the FBI 5 out of the 10 years. Its always been a top ten contender as long as the polls also include small cities. People joke around about Detroit or Compton, Camden puts those both to shame in terms of crime, violence, and the city's ability enforce the law. That said, Camden is getting better but there are still warzone areas. Camden is smack dab in the middle of the path of progress. You 100% need a thick skin to manage rentals there.

Tips for managing rentals in Camden - You always have to keep your eyes on the ball. Have rent collected via an online system if possible. You 100% need to play by your policy book. Always enforce late fees, always expect your tenant to pay their rent and treat your place well. You also need to be prepared to evict. Even with great screening you are going to see an eviction in Camden. Keep detailed tenant communication logs and pictures of the property before they move in. Also screen well but be prepared that you aren't going to find a unicorn tenant there. expect 500ish credit, expect smokers, expect some blemishes on their background check. We typically allow smokers in our Camden units if they pass other elements with flying colors.

Areas to look at - Fairview, Woodlynne (its technically not Camden but most link the two), areas near Rutgers.
 

Hi @Justin Seaverns I am a local landlord and property manager who lives exactly where you do - in Washington Township! I own a bunch of rentals in Camden, Gloucester, and Cumberland counties. Shoot me a DM if you want to connect! @Justin Eaton has an awesome BP meet up her runs. Its a great way to meet other local investors down here in South Jersey.

@Abe Galam - Pete hit the nail on the head. There are a ton of variables for commercial leases. I own a small mix use building in Westville that has commercial tenants. There are two offices in the building and both leases are different. Part of what you have to account for is your tenant and their business as well as the space itself. Things like:

-Do you need a personal guarantee?
-Is the space built to suit? If so what elements is the tenant in charge of?
-Is there a lease ramp up?
-Insurance/liability of tenants business?

I would definitely consult an attorney just so you make sure you cover everything that could possibly affect your property, bottom-line, and liability.

-Mike

@Nichelle Kolokithia - Welcome to the REI world. There are quite a few good meet ups in the South Jersey if that is where you are moving back to.

@Justin Eaton has a stellar BP meet up that meets once a month. Also SJREIA is another great group that has multiple meetings a month. 

Central Jersey has a monthly meeting that the Better Flips team runs which is great for seeing panels and seeing deals pitched.

I'm positive North Jersey has a bunch as well!

@Cody Z. The quick answer is to be a property manager in NJ you must have/do one of two things:

1.Operate under a brokers license 

or

2. Have an equitable interest in the property (it can be as little as 1%)

If you do not have either one or the other then that person/company cannot be a property manager in NJ.

Now where it gets tricky is with short term rentals. Many short term rentals are in shore towns, many of which have local ordinances that change parts of the state law. Many shore towns are currently going through the process of identifying what AirBnBs/Short term rentals are. Some started classifying it as a hotel/motel and require their operators to get their respective licence in-order to operate as a short term rental. Other towns don't have any way to enforce a rule so they allow them to operate. Its further complicated by what entity the property belongs to. If it is in the name of an individual or an LLC. Is it a second home which then complicates the laws even more? There are still quite a few unanswered questions which makes it tricky for rental investors doing short term rentals at the shore.

@Keven Vanegas is a property manager out of Atlantic City and I believe he may be able to help provide a bit more color.

@Mayer M. & @Charlie Hampton - If you both PM I can provide a good South Jersey Plumber.

@Sue Chen I'll PM you

Congrats on buying your first duplex @Rosaria Pipitone! I'm fellow South Jersyian and landlord in the area. @Richard Sherman and @Michael Garofalo both had great points. Richard hit one point really on the head. Consult NJ Tenant-Landlord Laws. NJ has some very interesting Landlord-Tenant laws. One of the trickier elements are lease renewals.

Since this is your first time doing a lease renewal with a price increase I HIGHLY suggest sitting down with a lawyer and having them walk your through the process. Yes you will have to spend some money but it is worth every penny.

The good is you will be an owner-occupant. There are a ton of rules that don't apply to you and NJ tenant-landlord law is much more friendly towards you. That said there is still a process involved.

Now to the changing of the lease. There are a couple factors at play and you need to understand them in order to make the adjustment. Will you be providing a new lease contract? Are you keeping the old lease contract and just increasing the price? Both have different procedures in NJ.

Increasing rent while keeping the same lease I believe it is a 60 day notice (could be 30 but I forget). Needs to be provide by certified mail (if you use an online system for "regular communication" you may use that as well.)

Providing a new lease. This is the tricky one. Technically you are supposed to provide a notice to quit on the old lease and then provide a new lease to be signed. Its a 30 day notice I believe sent certified. That said, this process typically scares tenants because of the verbiage of the notice to quit so pragmatically many landlords don't do it the technically correct way and I haven't seen a judges enforce this. I would tell them up front that you plan to switch the lease over and schedule a time to provide it to them and go over it then plan for a time to sign it with them. 

Bottomline I would spend an hour with a lawyer and learn the process. There is a lot to it and if you plan on expanding in NJ its worth the time to learn the ins & outs.

Hi @Sue Chen. I am sorry to hear about your situation. Inhering tenants isn't fun, especially when they are a problem one from the get go. Your property is located in NJ and there are a slew of unique landlord-tenant laws that you have to abide by. I love BP but there is a lot of stuff that BP teaches that is not enforceable or illegal in the state of NJ. That said, non-payment of rent is one of easiest elements to enforce in NJ. Let me see if I can provide a few pointers.

Is your property in an LLC? If it is, you need to have an attorney represent you in an eviction case. LLCs cannot represent themselves in landlord-tenant court. You may get lucky and have a judge look the other way especially if this is your only rental but your case could get thrown out if you try to represent your LLC in court. If this property is in your name then you can represent yourself.

 All that being said I would still get an attorney. Evictions are a process in NJ. Even if you win the eviction you need to then get a lockout date set and a warrant of removal. If you move them out and there is property left in the building then you will need to issue a 33-day letter. Bottomline there are a lot of steps and you need to make sure you do each of them carefully.

Back to your current eviction. If they have not paid this should be an easy one. There are no noticed required and your attorney can just file for non-payment. If they challenge you and say they are withholding rent they can only do so with an escrow account. If they are not placing that rent into an escrow account and showing proof of payment then they are still not paying. As for a reduction of rent, I am a landlord and Property Manager in South Jersey where there are no rent controls. In North Jersey there are rent controls. In the rent controlled areas is the only area where I see something like that flying.

As for appliance, @JD Martin hit the nail on the head. Look at the lease. Follow that first. Otherwise, fix it anyway. You do not want to give a single shred of evidence that there is a landlord retaliation going on which is a HUGE no-no in NJ.

Best luck and if you need contacts for people in South Jersey (in case your rental happens to be there) please feel free to DM me.