All Forum Posts by: Rafal Mielniczek

Just one block in/near these redevelopment areas can make a big difference.

If its the redevelopment zone in/near Paterson, I would avoid it.  This is completely anecdotal/experiential, but I just don't see any 'hope' there in the near future when I visit the city.

If its one of the redevelopment zones closer to/in Newark, then I would see how close you are to the path station, Newark Penn Station, business center, or one of the upcoming neighborhoods.  Again, completely anecdotal, but Newark has some signs of hope in some areas and business prospects.  It was on the short list of Amazon HQ2 for a reason.  Run the numbers and run the numbers on a few different scenarios (best, average, worst) and show it to someone you trust, and if you still think its a good deal, then go for it.

@Rafal Mielniczek There are a few things I would look at, have you looked into these?

1) New construction in redeveloping Downtown areas tends to be Class A or B+, What level will your property be?

2) What type of amenities are listed on the pre-development websites, versus what you plan to have for your property? Will you be able to compete will be the question.

3) Furnishings can be a game changer, will you be able to compete from an aesthetics perspective? 

From a Pros versus Cons view:

1) Pro - you will get renters that may not qualify for the brand new product but still want to be in the new flashy neighborhood and decide they will pay less in rent since they weren't planning to use that new indoor year-round pool any way.  

2) Con - You'll need to project your rent for similar Sq. ft, to be a little lower since given the option for a 2 or 3 bedroom in a new development, versus a rehabbed product everyone will most likely want to choose the new development first.   

I have a new construction property completed in Oct 2015 in the same neighborhood of one of my properties that was a complete rehab in July 2017, The new construction property got higher income earners applying to rent the property versus the other property which drew a lower income earner wanting to be in the area. Right now since there are still a lot of vacancies from the over a Thousand new construction units that have come online, I can't get equal market rate for a similar 2 bedroom, after stabilization of all the new development product I'll be able to increase rent in the older property to get closer to the new construction property numbers on rent.