The Garden State Dilemma: Navigating Wholesaling in New Jersey

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Episode Transcript

Speaker 1 (00:08):
Welcome back to Wholesaling Around the World the
New Jersey edition.
Today we're going to be talkingabout my feelings about
wholesaling inside the GardenState, which is the 11th most
populated state, with just over9.5 million people living inside
the state.

(00:28):
So here's the thing, with itbeing the 11th most populated
state.
Normally, with that amount ofpopulation, it's a great
location to wholesale.
However, new Jersey has bothgood aspects to it and negative
sides.
The good part is that there aremotivated sellers that do need

(00:52):
to sell, which is one of thethings that we're always looking
at in states that we're tryingto wholesale and there are a
significant amount of end buyersinside of the Garden State.
However, it is an attorneystate in the northern part as
well as the title state in thesouthern part of the state.
It's very unique in that regard.

(01:13):
The attorney aspect.
You guys have heard me complainabout attorney states for years
now.
They just cause issues.
Attorneys are some of thebiggest deal killers out there
and it has caused us issues evenwhen we have dispo deals
previously where attorneys havecaused delays, caused issues

(01:36):
with sellers disclosing you knowhow much money we're making
when it wasn't supposed to bedisclosed, elongating closings,
causing sellers to becomefrustrated.
There's been all sorts ofissues when it comes to closing
with the attorneys inside of NewJersey.
Ultimately, my feelings aboutNew Jersey and wholesaling are

(01:59):
kind of eh, I never see a leadin New Jersey and go man, that's
the lead I want.
Just because my wins in NewJersey have been okay, my losses
that have come in New Jerseyhave been pretty crippling.
I mean, we have had deals wherewe stood to make $50,000,

(02:21):
$60,000, get killed.
They didn't make it across thefinish line for different
reasons.
And then also one of the thingslike the personality type of
the sellers in New Jersey hasalways been kind of harsh, like
rash, and that's been notnecessarily what I'm looking for

(02:43):
when I'm buying leads.
So I've always kind of justbeen a little bit more negative
about New Jersey.
Now we're not talking about,like West Virginia.
Negative about New Jersey.
It's just not in the upperechelons of locations where I
want to wholesale as a virtualwholesaler.
Now, that being said, inside oftitanium university we do have

(03:06):
quite a few students that arelocated in the Southern New York
and Northern New Jersey area.
Some of them are localwholesalers in New Jersey,
specifically Joshua English.
He's been with us since thefirst class of titanium
university.
I know that he does very wellinside of the state of New
Jersey and sticking to it right.

(03:27):
That was one of the reasons whyhe came to titanium university.
He didn't want to expandnationwide, he wanted to be able
to close deals inside of newjersey and he's been able to do
that virtually, um, and he hassuccess.
So I'm not saying it's a badlocation to wholesale.
It's just if you're wanting toexpand out of your local market

(03:48):
and looking for a new state, newJersey is not going to be the
place that I'm going to pointyou in and say that's a place
that you can go in and easily doa virtual wholesale deal.
Now, there are some benefits toNew Jersey and the fact that
there are zero wholesaleregulations.
As long as you just abide bythe normal wholesaling laws and

(04:14):
regulations, you're just finethere, which is great in
comparison to its neighbor likePennsylvania, which has some
very harsh regulations.
And also, going back to theattorney aspect of it, I do
think that the attorneys arebetter in New Jersey than they
are in New York, right?
So in surrounding areas, newJersey actually does kind of
stand out against some of itscompetition directly around it

(04:37):
Now, in regards to the dealsthat we have closed in New
Jersey, we have done deals fromall the way as north as Sparta,
new Jersey.
Obviously, we've done quite afew deals around the Newark area
, piscataway, montclair.
We've gone down to Lebanon,we've done Hillsborough Township

(04:59):
, we've done Trenton, New Jersey.
We've done Morristown, rightoutside of Philadelphia, and
then we've gone as far south asCape May Courthouse as well, as
we've done Pleasantville andsome other locations throughout
the state.
So we have done deals all theway from north to south, east to
west and throughout thedifferent parts of it.

(05:19):
What I will say is dispositionsis easier in the northern part
of the state.
It's more populated up there.
Down in the southern part ofthe state at least my experience
it's a little bit more ruraland it's harder to find buyers.
So give yourself a little bitmore time if that's where a lead
comes in, if you're virtuallywholesaling in New Jersey and

(05:40):
you're new to it.
Another thing is payingattention to, when you're
comping and underwriting, thecash flow aspect of it.
I've seen quite a few smallmulti-family leads come in in
New Jersey.
Right, we're talking about theduplexes, triplexes, quadplexes,
triplexes, quadplexes, evenfive and six units.
Pay attention to the rent ratesand what the end buyers are

(06:03):
buying those at.
And as is condition, because insome areas the buyers are going
to want a 2% to 3% rental andin some areas a 1% or even worse
would be acceptable to the endbuyers in that area.
It's going to be very it'sgoing to be dictated by the
comps.
You're going to have tounderwrite that and make a very

(06:24):
tight box to understand exactlywhere your end buyers are buying
.
Now you would have to loosenthat up the southern portion of
the state because there's goingto be fewer comps there.
But especially up north in theNewark area, you know, right
across the river from New YorkCity, that's going to be chock
full of comps.
Right, the benefit there is youare going to have plenty of end

(06:46):
buyers, but you're going tohave a ton of competition on the
acquisition side.
So ultimately, when I've lookedat New Jersey, I've always kind
of felt like acquisitions wasn'timpossible, but it wasn't easy
either.
So it was always kind of likemiddle of the road, probably
like if I had to give it on ascale of one to five stars, five

(07:09):
stars being super easy, onestar being impossible, it's kind
of two and a half to threestars on acquisitions,
dispositions.
I've always kind of felt aboutthe same.
It's about three starsdepending upon where you get the
deal.
I feel like in the northernpart of the state it's a lot
easier to dispo, harder toacquire.
Southern part of the stateeasier to acquire, harder to

(07:32):
dispo.
That's kind of my feelingsabout New Jersey.
Again, when we look at thisseries it's kind of to give you
guys an insight to my feelingsand my thoughts about the
different states and whether ornot you should virtually
wholesale.
My ultimate decision on NewJersey is it should not be one

(07:54):
of the early states that you tryto move to unless you have a
direct connection or marketknowledge or an end buyer there.
But if you have that you shouldabsolutely get deals there
because they can be extremelyprofitable.
I will say the averageassignment fee in New Jersey is
probably going to be a littlebit higher than it is at other

(08:15):
locations.
So if you were to go get a dealin, say, michigan, ohio,
indiana, missouri, those aregoing to be places where you're
probably going to averagesomewhere between $10,000 to
$15,000 assignment fee In NewJersey.
It's very common for you tohave a $20,000 to $40,000
assignment fee, partiallybecause the price points are

(08:38):
higher and also because you cancome across these multifamilies
that can be extremely profitable, especially if they're tenant
occupied or if there's a valueadd there for your end buyer.
Long term, every virtualwholesaler should eventually do
deals in New Jersey.

(08:58):
If you plan on being nationwide, just go into it understanding
that it's probably not going tobe your best state for leads to
contracts, but the profit perdeal is going to be a little bit
higher as long as you're payingattention to those comps and
buying where your end buyers buy.
So those are my thoughts on theGarden State.

(09:20):
For those of you that arecurrently wholesaling there, let
me know How'd I do.
I don't have a ton ofexperience in New Jersey, but
we've done deals all the wayfrom the north to the south and
the east to the west.
So let me know in the comments.
Do I know what I'm talkingabout when it comes to New
Jersey, or am I just full of it?
Show me some love, like NewJersey, or am I just full of it?

(09:41):
Show me some love like today'svideo?
And, like I always say, goRutgers.
I love the Scarlet Knights.
By the way, my son's middlename is Rucker Trinity, rucker
Bates.
I love underdogs.
I've loved Rutgers Universitysince day one, so you would
think that I would actually havemore of a love of error in New
Jersey.
It's just those damn sellers.
They're kind of stubborn there.

(10:01):
Show me some love, guys.
We'll see you all tomorrow.