Hi Everyone,
I’m looking to start house hacking in northern New Jersey where I was raised. Specifically in the Bergen County Area. I recently graduated college and am eager to get some skin the game. I have done a few months worth of research into real estate by utilizing the courses on BP, reading books, and listening to BP podcasts.
My background is in accounting and finance so true to form, I used what I learned to create and spread sheet to analyze my potential deals. My spreadsheet accounts for a good amount of costs. Besides just mortgage, insurance, and taxes. I also factored in vacancy fees, cap ex., property management fees (for an exit strategy down the road), ect.
I'm finding it pretty hard to locate multifamily homes (quads specifically) that are doing much better than the 1% rule (monthly rent/purchase price) or provide cash flow of $100 per door (assuming I were to put down 10% with an FHA loan) . This is even when accounting for going rent rates on the unit I would occupy.
I have also been trying to find value add properties such as where the landlord is paying utilities out of pocket, undervalued rents based general market knowledge and according to rentometer.com, and some that could use a few thousand worth of cosmetic repairs. The problem with accounting for these things and factoring them into my models is that I’m hesitant to use any form of speculation such as “potential” rent increase due to my lack of experience.
I wanted to know anyone with experience in this market or even others can tell me if my criteria is too stringent, if I should in fact rely on those forms of speculation in my model, as well if they can suggest B class neighborhoods in the area.
Sorry for the long post, but I wanted all my cards to be on the table. Any general advise you guys believe could be useful would be greatly appreciated!
