All Forum Posts by: Moises Mari

Hi @Uneeq Khan, we manage a good number of multi-family properties in Bergen, Essex, and Hudson County.  Feel free to PM us if you have any questions relating to Property Management. we'll be glad to answer any questions or concerns. 

Best of Luck!

Hi @Ryan Champin, I totally relate to your struggle.  I've been investing in multi-family properties for some time now, I purchased my first house hack 2 family back in 2012 and as you probably know, if wasn't as competitive as it is lately.  It's been tough to score a contract for our FHA buyers since there has been a lot of competition and other buyers coming in with 20-30% down payments, as well as cash buyers.  We have experienced this in Passaic, Bergen, and Essex County, not only with people purchasing multi-family but also with single family property buyers.  In reality, when you are competing with other conventional buyers, it's all about the real estate agents negotiation strategy, many think that we as agents just open doors, but a real experienced agent, knows a lot more than just that. 

As @Ryan Paltridge mentioned, it is best to work with with someone in the area, ideally someone that is doing or has done what you are trying to do, as one would understand what you are trying to achieve and follow the Return/ROI/Cap Rate/Cash on cash return (which ever way you are analyzing your deal)  you are looking to accomplish.  You will start hearing or probably have already heard that the market is softening a little bit.  Being exposed to the market on a daily basis, I could slightly agree on that.  The potential to purchase now, may be a little better than it was over the summer, keep that in mind.  

Feel free to reach out if you have any additional questions. Best of luck!!!   

@Patrick Ma, send me a PM whenever you have a chance and I could provide you the property management info.

Hi @Michael Smith!  Full disclosure, reach out to the rent control office to verify the information I'm about to share as they would be the best to provide the most up to date information about this topic.  

We own and manage 3 family properties in Newark (Essex, Bergen, Hudson Counties) for clients and to give you the quick answer, yes, 3 family properties are subject to rent control.
If a tenant moves and they have previously recorded rents, you will be subject to renting the property at the amounts that have been recorded previously, a vacant apartment does not reset the rent controlled amounts.  There are other ins and outs of rent control, if you would like to get more info definitely call the rent control office, they are pretty responsive and should be able to provide you all the info you need. 

Before you buy a vacant property, if you are curious about knowing if someone reported rents in the past, request an OPRA request and that will be able to show you if the city has records of previous submissions of rent control amounts. This is very important because if they do, you will have to abide by those amounts.

Let me know if you have any other questions.

Best of luck!

Moises

Hi @Patrick Ma, rates will definitely vary a little, the lower price points will most of the time get you lower quality management as it takes time, man power = cost, to effectively manage a property. Other things may also be taken into consideration, like the distance between your properties, the number of units and perhaps the most important of all, the value that the management company will bring to the table, there are companies that just manage a unit and there are others that maximize the rental unit to its full potential in regards to rent amounts.  For the latter, I would not mind paying a premium as I would most likely be collecting higher rents, which would also potentially increase my property value etc..  as you probably know that when rent amount are not at market levels your property value may take a hit on a multi-family. 
Feel free to reach out if you have any additional questions.
Best of luck!

Moises

Hi @Monica Kennedy, @Thomas D., @Stephanie P., we own and also manage property for other clients in Newark and The Oranges, and I could tell you this much, what may feel safe to me or someone else that is exposed to Newark and these other areas may not feel safe to other people. 
When working with people that want to acquire rental property in these areas I always tell them to research crime in the area online and drive around the areas they are interested on in order to get a feel to what areas they like best.  The crime maps should be able to help a bit deciphering areas you would like to work in, then drive around the areas you choose and go from there.  There is definitely still a lot of opportunity in Newark/Oranges, let me know if you have any questions.
Best of luck!

Hi @Alex Pineiro!

Analyzing:
The way us investors analyze deals and look for financing is a very similar way you would analyze deals in other markets.  You will always have a mortgage payment eventually, pay interest, insurance, water/sewer, save for your reserves such as vacancies, cap ex, and repairs, and of course, can't forget property management if you are not planning to manage them yourself. There is always some other misc expense related to an specific property/transaction. 

I feel like Property Management is probably the one thing that is difficult to incorporate in NJ since if you account for all the items I just listed rarely any property would make sense to purchase off the MLS at least.

Financing:
Financing is also similar, the only difference in comparison to out of state investing is that you will not find a lot of seller financing in the area. However, every deal is unique.

Overall, Biggerpockets does a great job at teaching how to analyze deals, everywhere you go, the calcs will not vary much, however, your returns may   :)   ..... Best of Luck!

Hi @Scott Starrett, owning property in Newark myself and also managing property for clients in Newark with our Management Company, I'll give you a few things to consider when thinking of Newark as a place to invest:

1) Get familiar with their rent control laws for one, they are the most strict in all of New Jersey I feel. 
2) Definitely as @Matthew Filepp mentioned, the best thing you can do as part of your due diligence is get familiar with the areas you want to invest, not only by doing online research but by driving around and perhaps even walking around the areas you want to invest. 
3) Everyone has this concept of finding a value-add rehab, however, Newark or NJ is a different beast, similar to NY.  For one, there is a ton of competition. Unless you are going to live in the property (Which is probably best for this type of scenario).. It is a bit difficult to find something to purchase at a discount, low enough that you will have enough money to hire a contractor, perhaps get a hard money loan to finance it, and add enough value that you will be able to save a decent amount in the purchase worth the time it will take you to manage the entire project. I'm not saying is not possible because I have done it, but it is definitely not as easy or its not something I would suggest for a first purchase.
In Newark there are enough margins to perhaps make 10-12% Cash on cash returns without having to do all the work in finding the deal, rehabbing, financing, etc. Sometimes you can get even higher. 
4) Definitely go for a 3 family, not a 2, the numbers are better with 3 and higher. 

My goal is not to discourage, but to give you a realistic perspective, we all hear successful stories from investors outside of New Jersey, and although the stories sound amazing, achieving some of the out of state numbers in NJ could be more challenging than most may think. Keep on researching, and do the walk-throughs in the areas you want to invest. 

And most important of all, don't get "Analysis Paralysis"... 

Let me know if you have any questions, always willing to help. Best of Luck!

I second @Jeff Pagano's question.  Where are you finding $65k deals in Jersey and renting for $1,600-$1900 a month?  I've been buying in Northern New Jersey and have never gotten anything that low, unless is a run down property that will need significant rehab to get going.  Please do share @Lee Underhill   :)    ....

Hi @Brian Prudden, there are different fees property managers charge in the Newark, NJ, Essex County. 

Set Up Fee:
The set up fee is a fee you pay to sign up a property manager to manage your property. This is a one time  fee and it usually runs from $500 and down depending on the company. This fee covers the cost of setting up an account with the property management company. 

Management Fee: 
This is the main fee you will pay every month. This fee covers day to day management, things such as, rent collection, communication with tenants regarding any tenant complains, and responding to emergency maintenance calls. This fee is usually a percentage of all gross rents collected, some companies also charge a flat rate instead. These fees vary from market to market but the standard fee around our area is 10%, sometimes, if you have multiple properties you need managed, you may have more power to negotiate the fee slightly down.  What I have noticed is that a good portion of property managers will not manage Newark, NJ properties for less than 10%.

Leasing Fee:
This fee is a one time fee upon renting a vacant unit in your property. The fee is normally equivalent to one month rent, the cost can be paid by the owner of the property or the tenant interested in renting the unit. It is recommended for the owner to pay for this fee, as if you push this fee to the tenant, the unit may sit on the market a little longer than needed.

Lease-renewal fee:
Lease renewal fees are a yearly fee that is collected upon renewing the lease to an existing tenant. This fee is normally a fixed rate fee, the amount varies by property management company but it will usually hover around $350 or less. 

There may be other fees management companies could charge, these will vary from company to company but overall these are the most common ones.

I manage properties all over Northern New Jersey, including Newark and East Orange properties, properties I own and properties I manage for other clients, feel free to reach out if you have any additional questions.

Best of Luck!