All Forum Posts by: Natalie Schanne

No I wouldn’t pay it and I would plan that potentially if I don’t pay it, they leave. I would work on my communication of my processes including letting them know asap of their schedule with me. 

A good cleaner is priceless. Every time I change cleaners, I spend at least 3-5 hours retraining on my processes and expectations and even then things are missed.

Ideally your cleaner should have enough other work so that doing your property is available in their schedule but not required for them to pay their bills. I.e. if I had allocated Thursday 9-12pm to you, I have 1-2 other Flex Time cleaning jobs I can do instead. 

After a cleaner starts randomly trying to bill me extra they usually don’t last very much longer before they make some excuse to quit or ask a fee “after working” that I don’t pay and then we mutually part ways. 

I had one new cleaner from turno allege that she cleaned the same clean room (I do room rentals) she had cleaned two days before, even though it hadn’t been touched. I had written turno notes and messages to clean upstairs room after last job was downstairs room. Guest checks in and says Nat it’s dirty in my room. I’m like ?!? With the cleaner. She’s like I cleaned the other room. I was like you didn’t notice it wasn’t dirty and you didn’t realize the other room was dirty and ask me a question? So I didn’t pay her for recleaning the clean room. Then she quit saying that I didn’t respect her and I had to scramble to hire someone else. 

Tell me, what's the difference between a 10 person multigenerational family in a 5 bedroom house and 5 "solo" working professional roommates? Why is one better than the other? In general, if you are not causing problems for your neighbors or your town, you can do reasonable things with your properties. If you are living there, 99% of the time you can rent out rooms without the town having the right to say anything, especially if your occupants are 30+ days. If all your roommates are also 30+ days, is it not unreasonable to draw up a joint lease between the people for the whole house? I saw a lady in Collingswood get unfairly complained on because she was hosting people for a few days at a time across multiple bedrooms in her house. I am still not sure why the neighbors picked on her, but someone nosy did. She ended up selling and moving out of state.

@Kelly Williams - I don't know what your family situation is like, but if you are capable of buying a larger house like 5-6 bedrooms (it won't be listed on MLS like this, but look for spare rooms that could be made private like a dining room) and 2-3 bathrooms, you can rent out the spare rooms in New Jersey for $1000-1300/month depending on amenities. That's how you cashflow it. I would NOT expect tremendous "just because" appreciation over the next 2-3 years unless you're buying and rehabbing a dump and creating forced appreciation. The past few years with extraordinary appreciation "just because" should be a thing of the past. The market is definitely softened in terms of prices went up and interest rates went up (so affordability fell) and now a house gets 1-3 offers over 3 weeks instead of 5-10 in 1 week.

There are good opportunities that appear every week and awesome opportunities that appear every month in your target area(s). The question is whether you have the auto alerts set up and will be aggressive to get the property under contract. As either a home buyer or an investor, using either cash or a conventional loan (with "as is language") will be more attractive to a seller. The person who wins the project is the person who usually offers the most / the best terms. That doesn't mean that you're getting a bad deal if you outbid everyone else. By default, you have to, unless you're buying cash as is or have some other special terms that matter more to the seller than price. 

The market is still pretty hot for investors to be buying. I've seen properties that were currently renting for about $6,000/month get sold for $900,000 with a 25% down investor loan. I prefer deals that are 1% or higher especially after any upgrades and rental turnovers, so any property I buy for $900k better be renting for at least $9,000 a month. (This is a crude, rule of thumb example - it's better to plug in everything like maintenance and taxes and insurance on your spreadsheet). Do they exist? Usually the in-place rents will not meet the 1% rule. You have to be creative. I bought a house in central jersey for 250k that's renting for over 5000 a month right now consistently for the past 2+ years. Could I get 6000 a month with standard zillow, 1 year leases? The answer is no way. 

Quote from @Kevin Hernandez:

Hi All - I'm looking to get into real estate this year in the NJ market, but have to continue living in NYC due to job, social, etc (at least for now).

I've considered investing in a multi-family vs. a SFR in a few towns that I am familiar with due to growing up in NJ. Any advice or thoughts on this? Should I still pursue in this type of market even though I likely won't be house hacking and will have to do 20% down, etc.

Thanks for your thoughts. 

Please clarify what you mean. There are a couple options depending on your level of income and desired lifestyle. The more flexible you are on having a posh pad, the more likely you can make a savvy investment. 

You can choose to buy a property in nyc or on transit lines like Brooklyn, queens, upper East/west side,hoboken, Jersey City etc. Where you can either rent rooms, or have private in law suite or multiple units like a brownstone. they are now offering as little as 5% down on a conventional loan for multifamily whereas it used to be 15-20%

like you said if you only want to buy an investment property, you will pay more interest and need to save up 20-25% plus closing costs and rehab money.  

@Nadiyah M. - For every rental I've posted in Central New Jersey (Mercer or Burlington County), the landlord or owner has agreed to pay the broker fee (negotiable, often 1st month's rent which is split 1/2 listing agent, 1/2 buyer's agent). The listing agent is responsible for any or all of the following: photos, room measurements, data entry, talking to agents, assisting the owner with reviewing tenant applications, getting the lease completed and signed, collecting the first month's rent and security deposit. (Usually the first month's rent is made payable 1/2 to listing agent brokerage and 1/2 to tenant agent brokerage). The tenant's agent is responsible for any and all of the following: finding or suggesting properties for tenant to rent, driving and opening doors to show the tenant multiple properties, advising tenant on finding a good deal, reviewing lease with tenant, preparing the lease and collecting checks. After the agent's brokerage takes 30-50% of the money, on a $2000 rental, this could amount to $500-700 in the pocket of each agent for 5-20 hours of work each.

If the owner doesn't agree to pay the broker fee, usually agents will not invest the time to list the property. I would not do it because it's very tough to help a tenant secure a place right now. I have not been able to get paid on 95%+ of tenants I've tried to help secure something that wasn't my listing because they often find another property where I can't get paid, tour directly with that apartment building or owner, and sign directly with that apartment building or owner. 

At least Central Jersey is not New York City, where buyer brokerage fees may be custom. It seems like perhaps things are changing. However, we have to remind owners that every 1 month vacant is $2000 they didn't receive, so what's the difference if they paid it to me and I found them someone on Day 3?

On about half of my rentals, I have gotten the tenant agency as well (dual agency) because they contact me directly from zillow / realtor / apartments com / yard sign, etc. 

@Erin Murphy - I live next to Trenton City New Jersey in Ewing Township. I have bought and sold many properties but I have not bought anything in Trenton City because I have heard many stories like the following. Early to joining BiggerPockets in 2017, I went under contract for $40,000 for a brick duplex in Trenton City on Hillcrest Ave. This was a short sale / foreclosure. The guy who owned it was a SEPTA pension retiree in PA who wanted more passive income. He had paid approx $120k. He had bought another property for approx $60k in another part of Trenton. He did a lot of work to the properties himself and tried to take good care. He was being foreclosed because at least one of his tenant wasn't paying and he couldn't afford the mortgage. During the short sale negotiation process, they told me they would not sell it to me for less than $80k. At that time the ARV was $100k, so I offered $60k. They didn't accept. I walked. The bank sold it at sheriff sale 6 months later for $61k. Meanwhile, I'm talking to this guy and he said in his other property, the little old lady paying long term rent, moved out, and within a week, the neighborhood people had broken in, had a party, broke most of his doors, stolen all his copper and HVAC, etc. I observed the vandalism damage with my own eyes, then I wrote him a cash offer, but I offered him like 20k and he didn't take it. I think he lost that one too. Back in that time, sheriff sales sold these houses for $30-50k and they were renting for about $1100-1200/mo. Now many of the houses, especially 4/1 or 4/2 are renting for $2000+/mo and are selling for $100-175k depending on finishes.

What I don't like the most about Trenton City is the high property taxes in relation to the value. A property can be worth $100k and have $6000 of taxes. Or can be worth $200k and have $12,000 of taxes. This dampens your appreciation considerably because people consider apples to apples in terms of total mortgage payments. So $1000 PI + 500 taxes + 100 insurance = the same as $1200 PI + 300 taxes + 100 insurance and when interest rates were 3-4%, 200/mo could buy you $50k more loan, so the house with lower taxes would be worth $150k vs 100k. This is the same investing in PA vs NJ, NJ taxes are just higher. 

What's going for New Jersey is we have a lot of well paying jobs, so the rental demand and collected rents and are very high in comparison to many other places in the country. For example, I know many people who have bought a house in Ewing for $200k and it's renting for $4000+ a month and this person has put maybe $50k into it over a couple years including a new roof, updated cosmetics, and was able to BRRR out all the money. (BRRRing in this way is nearly impossible today).

Unless you are part of an investing contingent with a bunch of other landlords with Trenton holdings, like the "Brooklyn" folk, I feel if you are a landlord living 1+ hours away with the plan to have 1-3 properties in the near term, you will get ripped off. Most of the landlords here who are successful, quickly buy 10+ for more economies of scale, have good handymen on staff, and have eviction lawyers / attorneys ready to go. The average tenant in Trenton City is going to have a sub 650 credit score, a lower wage or unstable job, etc. A lot of people choose the more suburban / less dense areas in Ewing or Hamilton when they can find a place that works for them. A lot of Trenton City is dense rowhomes side by side for blocks and blocks. Trenton City also has a lot of board ups where the owners have abandoned their properties to foreclosure or repossession by the city and the City of Trenton owns many houses and doesn't have the resources to do anything with them. They should really resell them, even for $1, but they haven't, and this lack of private property owners results in an even lower tax base (and higher taxes for the people who are paying).

Yes, there are people who invest in Trenton and make good money, but I would consider them very aggressive, take no nonsense type of people. I feel like even investing in and around Bayonne, you could do Airbnb or room rentals or house hack in a way that will be better for you. 

@Mike Hern - people will always move where they can have a better quality of life - whether that’s a better job, a better house and lifestyle for retirement, etc.

That being said, as an investor in New Jersey, I have experienced incredible rent and rent growth and almost insatiable demand. There are so many high paying jobs in our state.

If we were more responsible with our township budgets, our property taxes wouldn’t be so insane, and our property appreciation would be higher.

@Andy Whitcomb - I am really surprised that your cleaners aren’t willing or able to take home and return your laundry in exchange for an extra $1500/mo. I know I wouldn’t mind running some extra loads at my house for that kind of money. As it is now, I have 3-4 sets of linens and I ask the cleaner to bag the laundry because if she doesn’t bag it, she usually leaves it wet in the washer, half dried in the dryer, charges me an extra fee for “doing laundry.” Overall I’m much happier to have dirty sheets and blankets than wet sheets in the washer.

I guess it depends how much laundry it actually is for the $1500.

@John Underwood - I had an outdoor motion floodlight for safety that they kept turning off simply because it was next to the kitchen light switch by the front door. Even when I put tape on it, which looks ugly, they still tend to mess with it. I think it’s because people are not familiar with the house and they don’t know what switches do, especially when they seem to do nothing.

I would hardwire it / disable the switch part so it’s always on, and plate it over. Or you can put on this switch cover but my switches this would probably not fit without disturbing operation of the other switch.