All Forum Posts by: Mike Zipf

Welcome @Kyle Hayes! 

Don't forget to add a picture and more to your profile, you would be surprised how much it helps. Hopefully you tell us more about your Newark deal I know I'm super curious. 

There are plenty of secondary cities in New York. You don't have to be in "The City" to find a large and growing renters base. I can't remember exactly what BP podcast it was but there was an investor on from Buffalo, who only bought in the western NY area and was making a good living.

I'd recommend you take a flight over to Atlantic City and see it. Its not a family destination and people are not flooding there anymore because of all of the surrounding states allowing gambling. There are no colleges, and high schools are some of the lowest rated in the state, if the whole beach rental thing doesn't work out you would be left with a worthless property. Atlantic City airport will be closing down eventually and while the coach buses are nice they are inconvenient. Also there are tones of empty rooms already in AC, I just stayed in Ceasars 4 days for free in the middle of August! (I am no high roller and I don't loose money in the casino)

But if you can get a free room you can make a vacation out of it.

Don't trust anyone who says they know exactly why the stock market did xyz. There are millions of investors and hundreds of thousands of computers that buy and sell hundreds thousand of times a second. The people who make money in the stock market year after year, through ups and downs are those with insider knowledge. Don't let stock market speculation stop you from investing in real estate.

@Angelo MartI don't doubt that you are informed about prices in the area. That isn't the point I was trying to make. The OP was asking about buy and hold for cash flow and you said "The best bet in Newark is go in to the rough neighborhoods, renovate a cheap home and rent to SECTION 8 tenants", that's dangerous because you are going to kill your money. Physical security aside, getting a property Section 8 ready from long distance without a team is a risk. You have lived in Newark but OP has not (or hasn't mentioned it).

@Angelo MartBit of a strong generalization. Newark is pretty stratified between neighborhoods and recommending that someone go to the worst neighborhood and rent it to Section 8 as their first multi family is dangerous. I would agree that flipping in Newark is a bad choice just because the housing stock is so old and most have not had steady upkeep for 50+ years. 

I'd just like to add to what others have said about the North Ward and the Ironbound (Down Neck if your talking to old Italians) is that even in those districts there are multiple neighborhoods. In the Ironbound there is the East Ferry, Riverside, North Ironbound, and South Ironbound. And even in the North Ironbound there are areas with low rise projects and lower income tenant base and areas with a high income white collar tenant base. If you take your time and drive around the area you will see these differences and they will be reflected in prices :)

If your talking about University Heights neighborhood you are going to be paying a large premium, a low cap rate fixer upper. I went to college in the area, college students are rough on properties if your looking for a college rental. On top of that you arnt going to be getting the A+ students who get grants for their housing, your getting the C- students who need a cheap place. In that area your more looking at a speculative investment to park your money for the appreciation, or your looking for a full time job managing college student rentals. Just my 2 cents, take it as you will.

You could always contact a Realtor in your area and see if they have done any of these deals in the past. I have never seen it done except with old construction grandfathered homes. Is the property multi-family zoned? Has it ever been a multi-family (could be grandfathered)? Is this a maids quarters?

@Mark JohnsonReno costs can be quite high from what I know when it comes to bringing electrical and plumbing up to code as well as a boiler. I try to add those numbers to my calculations, but its hard to judge. Like if its already being rented does it actually need a reno? Will you actually get better rents/less costs if you upgrade a unit? Just some things I'm thinking about. PS: Don't forget to post in the new members forum! A lot of "foot traffic" there.

@Larry K.After reading through East Orange zoning (from a non lawyer perspective) there doesn't seem like there is anything other then lot size and parking preventing one from converting a SFH to a MFH, in an R-3 or Medium Density Residential area. The local government seems quite worried about parking like you said and I would need to put some off street parking in the back yard or try to find a property that already has it.

Welcome,

I think you may be the only person in North Jersey who likes driving!