How to Buy And Flip For Profit In New Jersey Without Making A Mistake

Are you looking for a real estate investment in New Jersey?
Many real estate investors and first time investors are making mistakes by rushing a decision Itamarac√° Real Estate or slowing a decision. In real estate as location is important, timing is not less important.
During my 15 years of extensive experience working with real estate investors, from buying a single family and flipping it to buying 2-4 family homes, apartment buildings, land development sites, condo conversion, strip malls, commercial and office buildings. There are many types of real estate investments and each one has its own pro’s and con’s.
First of all before you invest, ask yourself:
Do I want to buy and flip for quick profit or buy and hold for future profit and immediate income source?
If you are looking to buy and flip, make sure you learn the area you are investing in by looking at whats available, previewing available homes (so you learn your competition), then look at what sold in the last 6 months. Make sure you choose comparable size, location, number of bedrooms & baths, condition and type.
When negotiating a price, always start below your top offer price (about 10-15%) and slowly raise you offer. In some cases (maybe 20%) you should start with your best offer if other bidders are bidding on the property at the same time you do.
For those of you that are looking to buy and keep for income, that is by far the best long term approach. I have seen hundreds of investors lose their shirt by investing in speculations and projected future upsides. Selling over 500 properties in New Jersey and New Why Do People Overprice Their Homes York I must say, those who invest and never sell are always better off then those who focus on flipping. In the long run, keeping the properties you buy should be your main goal and going after large apartment complexes (30 units or more) should be your main focus.
For the first time investor or small investment (less then $500,000) focus on getting 6 family or more. There are plenty of 6 family homes available for $300,000 range.
The reason Hudson County in NJ is the best place to invest in apartment buildings is the density is at its highest pick. Union City NJ is considered # 1 density in the United States, which helps your full occupancy levels to stay at 100% with a waiting list of tenants ready to move in.
When buying apartment buildings use the following formulas to calculate Cap rate and also ROI (return on investment). Many investors work by CAP rate which is a basic & quick way to know if the deal is worth while due diligence. But always make sure you calculate ROI to know the true return you will have from the investment. Cap rate is only good when you buy all cash, but the majority of investors do not buy cash. The majority of investors put 25% – 35% down and the rest is mortgaged. When doing so, you must calculate your return the following way:
Lets use a $1,000,000 purchase price with $80,000 net operating income. In this case the obvious Cap is 8%. But will you make 8% on your investment when you use 30% down and the rest is mortgaged?
Not really. Here is how you should calculate: say your loan amount is $700,000 at 5% interest (amortized for 25 years). In this case your monthly mortgage payment will be about $4,000, meaning $48,000 for the year. Now lets take the $80,000 net income minus $48,000 and we are left with $32,000 Net after mortgage.
If our initial investment was $300,000 then making $32,000 a year is about 11% return.
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