All Forum Posts by: Ruchik Gandhi

Just look a bit west from where you live in Denville and you will make money.

Hi Ruchik, 

I have made the same observation as you regarding MFHs in North Jersey. From looking through past topics posted in the NJ forum around this same point and reviewing some case studies of other investors which started out in this area, I have determined that it is very unlikely to find properties that meet those criteria you have stated (especially the 1% rule). By the rare chance you do find that type of property that meet those criteria chances are new investors like us are unlikely to beat out more seasoned investors who can pay all cash unless we act extremely fast and/or outbid there cash offer. I want to emphasize that although this does sound grim its not impossible. 

I'm assuming you are planning to house hack a MFH? If so what you can do is take a loss for year 1 and move out to free up the other unit and see what the numbers look like for year 2. I don't know if this feasible because I don't know your situation but this is definately a good way to atleast get into the North Jersey market. I don't know much about the appreciation in North Jersey, but I don't think it's that great? What have you come across? 

I'm still new to all this as well so I'm most likely overlooking some aspects that hopefully a more experienced investor could share!

I'm not planning to house hack. Just looking out for rentals with good numbers. In my analysis so far, I'm yet to find a condo or a multi family which cash flows even with the rent is multi units combined! So unless the expectation is that the loss will be recovered upon selling due to value appreciation, I'm not able to understand why would any investor buy a rental in this area but these properties are selling like hot cakes which makes me wonder if I'm missing something here.

@Ruchik Gandhi

I have a couple 2 families in Northern NJ and it took a long time to find them. 1 was purchased as a foreclosure and the other a short sale, both from the MLS. I think you should come up with your own standards of what makes a good deal and makes sense for you. I agree those typical guidelines may not be achievable in northern NJ. My 2 properties are not negatively cash flowing. What specific towns have you been looking in?

I'm a centeral/south jersey life long resident. When I used to work up north at one point I had planned to buy a duplex to house hack and cut my expenses/commute time. 

What I always ended up finding was that no matter what I found on the MLS up there wouldnt ever cashflow. Also I found that alot of people from the city sell and have more leverage to pay more for a property in NJ. I'd also imagine there were plenty of people looking to buy first homes and dont care so much about cashflow because it still works out cheaper than their current rent In the city. Customers that I had up there with apartments, generally owned them for a long time, inherited from the family, paid cash etc. and do well from that, but will never sell their cashcow at a steep discount.

If your plan is to count soley on appreciation, probably not a great idea or deal. Probably the best bet is to look off market. NJ is tough in general but the closer you get to NYC the more competitive it gets.

I haven’t invested in North Jersey. But I’m from there. And lots of people buy multifamily rentals. That’s what I assume you mean cause I’m sure theres cheaper single units/condos you can find to rent. I’m not sure if these multifamily investors are seeing cashflow on year 1, especially with how high the market is right now. I agree with you on appreciation being a big factor for investors here, they might be looking at cashflow once the multifamily is paid off. But this makes me curious too. Would definitely like to see some input here from multifamily investors in north jersey