If an upgrade to your NJ real estate requires too much upkeep, buyers may view it as a nuisance, rather than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install, secure, heat, and clean. That may not be an issue in California or Florida, where to year round use and practicality makes it easy to get your money’s worth. But in New Jersey, where the season for outdoor swimming is much shorter, a pool can be a risky investment. (more…)

Do you your due diligence when investing in NJ real estate. I’m sure you’ve heard that before, but what exactly is due diligence? A simple definition: The investigation and verification of the details of a particular investment. Start the process before the offer, but in the offer itself you also will want to include clauses which reflect your research and allow you to have inspections done, look at certain documents, and review the books.

Due diligence should always include a look at the books. Review the last 24 month’s income and expense statements. Look for anything unusual, like expenses that are too low or income that seems higher than usual. Look at the rent roll, and investigate whether rents are over or under the market rates for the area you are in. Check out the payroll records if there are employees. Look for suprises like accrued vacation time that you will have to pay as the new owner. The possibilities are endless. (more…)

As we discussed in a previous entry, a HUD home may or may not be the right fit for your NJ real estate investment. HUD gives priority to owner-occupant purchasers. However, it there is no acceptable bid during the priority period, unsold properties are then available to all buyers, including investors. Your NJ Realtor will have the necessary details.

There are a couple of ways to find out what HUD homes are available in your area. You can visit the HUD website online, or a better way is to find a participating NJ real estate agent. He or she will know what is for sale under the HUD guidelines. Moreover, your NJ real estate agent must submit your bid for you. HUD generally does not accept bids directly from buyers. (more…)

Buying a HUD (Department of Housing and Urban Development) home isn’t necessarily a way to get rich quick. These homes are supposed to be sold as market value, after all, which would semingly make the great deals you hear about a myth. However there are some profit opportunites here.

One of the reasons you still find good deals on HUD homes, even though they are supposed to seel at market value, is that they are sold “as is.” These are houses that have been forclosed on and repossessed, so the previous owner may not have had the means nor the motivation to properly can for the home. They often have enough problems to scare away most home buyers.

What does this mean? It menas that due to the condition, the market value may be low compared to properly maintained homes. This can mean an opportunity for an investor who is willing to fix a few things. For example, a “problem house” to the general public can be worth $40,000 less than surrounding homes, while it may take only $10,000 to fix it up and make it look good. (more…)

Remember this: You make your profit when you buy a NJ investment property, not when you sell it. Pay to much and you will NEVER recoup as much as you could have had you driven a better bargain!

The NJ rental real estate market is generally tougher on investors who overpay than on homeowners who do the same thing. While a home is an emotional purchase, many times leading to the “I must have it!” offers and bidding wars, most landlords look strictly at the numbers to see if their investment will pay off. If you pay too much for a rental NJ investment property, you should not count on a greater fool to come along later to bail you out of the purchase. (more…)

The less credit card and other consumer debt you have, the better your credit score will be, as will your prospects for getting a decent loan. Lenders usually require bigger down payments then in previous years due to the mortgage mess. Other factors will be the interest rates and generally stronger finances of the person purchasing the NJ investment Real Estate. Interest rates will be higher for those purchasing investments properties because studies show there is a higher likliehood defaults, compared to those covering real estate used as a primary residence. (more…)

Experienced NJ landlords find their investment properties in a variety of ways. Some look for foreclosures, whereby making friends with clerks at the city hall or bank employees who know which properties are about to be sold. Some run advertisements in local newspapers. Others work with a NJ Realtor who keeps their eyes wide open for possible purchases.

Several NJ landlords recommend joining a local landlord or property owner’s association to make contacts. Still, others take an additional step and join local chambers of commerce and clubs such as Kiwanis, Moose, and Elks Lodge. (more…)

The idea of owning rental real estate in NJ seems to be gaining popularity as investors tire of the swoops and swoons of the stock market. Not everyone has what it takes to be a landlord, but those who do may find that rentals are a good way to build long term wealth.

Once you have made the decision to buy NJ rental property, your real work begins. Finding a profitable rental property usually takes time, connections, plenty of research. A licensed NJ Realtor can be a valuable asset when transitioning into your new livelihood. This series of posts will help you along the way.

Know your time table. As with any other investment, you should have a good idea of how long you plan to own a rental property before you buy it. The long you plan to own the rental property, the more you’ll need to invest into maintenance, repairs, and improvements. (more…)

Investment opportunities in real estate abound. As an investment vehicle, NJ real estate allows you to flexibility to control the involvement and time invested. From passive investments in Real Estate Investment Trusts, to buying NJ homes and positioning them for rent, there are may ways to profit from real estate investment. As your agent, I know all the ways, as well as the advantages and drawbacks of each. Let me explain further…

1. Real Estate Stocks and Mortgage Instruments: The passive investor would most likely want to place investment funds into the stock market in the form of equities of major national home builders. On the other hand, they might want to invest in Real Estate Investment Trusts (REIT). This is a fund set up and managed to invest in stocks, bonds and mortgage investments in the real estate area. Discounted notes are another investment strategy. Sellers many times accept a mortgage from a buyer, and after payments have been made for a while, they want to convert to cash. They sell the note to an investor at a discount and the investor then gets payments from the buyer.
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Buyers use NJ Licensed Realtors to find their second home. In searching for a second home, 53% of vacation home buyers and 52% of investment buyers purchased through a licensed Realtor. However only 15% of both vacation buyers and investment buyers purchased directly from an owner they knew in advance.

A 2006 study profiling second home buyers shows the typical NJ buyer searched seven weeks to find their second home and looked at six properties. Most vacation home owners want to use their property exclusively, and 75% of them report that they never rent their properties. A similair finding was reported among vacation home buyers in 2007.
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