Your thoughts on Real Estate in NJ

[MichaelJMastro]

Hello everyone, first post here. Allow me to introduce myself.

I am 29 years old and live in the Northern NJ area. After making some terrible financial decisions, I took it upon myself to educate myself about finances. I've always had an interest in the real estate market, but was always shunned away due to the fact of the extremely high market prices in my area. After reading a couple of books, one which truly inspired me (Rich Dad Poor Dad), i've decided to go at this again. Instead of saying "I cant do this", its more like "How do I go about doing this", which is why i'm here and hopefully I can get some different view points to such questions.

Real Estate in my area, although down from a few years ago, is still extremely high. When I read books or comments on websites, I notice people for the most part deal with real estate within the 100k-200k range. I can honestly say that the average property for sale in my area is around 350k. Although I just recently started saving, and turned everything around for the positive for myself, I am in debt with credit card bills. I only have around 2k saved liquid. I do have some money in stocks, bonds and my 401k but not sure if that does me any good. I was contemplating taking everything out of my 401k but with all of the penalties, i'm not sure that is a good idea. I have excellent credit; last I checked it was 785+.

I have heard people say that I should pay off my debt first. I would generally agree with this idea, but I also thought, wouldnt buying an asset that if even at most brings in $200.00 positive cash flow be the smarter move? That extra cash could either go towards me saving or even my debt, all while building up equity in that new piece of property. I figure it as another job making that much money a month. Just a thought and would like some opinions on that.

My main concern though is with prices so high in my area, how would one go about buying a piece of property? I would love to see the different view points and everyone's suggestions on this.

To me, this is just another game (albeit the game of life) and I cannot wait to start playing and succeed at it. I cannot wait to get my feet wet and do my first deal. I'm sure i'll have plenty of more questions, but I will start with this one for now.

Thank you

-Michael

[taxlienadvisor]

Hi Michael,

In my opinion the best way to purchase properties in your state and area would be to go through your local County Governments where you can purchase Government Secured High yielding tax lien certificates or Tax Deeds.

I have recently completed my new report last week entitled "7 Steps to Investing in Tax Liens & Tax Deeds" ... if you would like to receive my new report, just send me a PM with your email address and I will forward it to you.

I would like to wish you the absolute best in all of your future Real Estate Deals and Ventures.

[Sabir]

For what i guess you have lot of experience in this field. So, you should not to worry about your investment you will get back that sooner or later but stick with it.

Property market has internationally down at the movement that may effects you little but don't worry soon prices will be at high level then it will easy for you to get your out put from that investment you made in your property.. GooD Luck

[Derek]

I don't know your full financial picture, but $2k liquid is a drop in the bucket. You need enough cash cushion to prevent yourself from unexpected issues, carrying costs, etc. You'll need down payment money, closing costs, carrying costs, repair/rehab budget, etc. You'll tie that $2k up in an earnest money deposit on day one of your escrow period and, if that's all you've got, you're no longer liquid.

I don't suggest cashing out your 401k and taking the penalties. You may be 29 now, but you'll be much happier with yourself when you're 65 if you leave that money alone.

Paying down existing debt will help you get a better rate when you do feel prepared to take the plunge. Keep in mind that credit score is only part of the picture. Income/debt ratios play a HUGE role in the underwriting process.

Just keep plugging away and doing your research. There will be plenty of opportunities to come in the next few years as the market slowly recovers.

As for Northern NJ. I don't know much about it (I have relatives in Bergen County), but I know your RE taxes are HIGH. Obviously numbers crunching based on market rents, acquisition/carry costs, etc will help you determine if you're making the right move.