Bernardsville, NJ Investment Properties For Sale
Over the past 20 years, I have gained important knowledge working with investors in Bernardsville, NJ and surrounding areas. I worked in construction with local Bernardsville builders and Bernardsville contractors while in high school and concurrently studying the Carlton Sheets “No Money Down” real estate investment course. I was making offers on Bernardsville investment properties at 16 years old. I learned the rewards and benefits from my mentors and later implemented this lucrative path for my clients and for my career.
Positive cash flow myths
One of the most common myths of real estate investing in Bernardsville was coined around the phrase “positive cash flow”. I found that every study I examined and local investor I spoke with bragged about the positive cash flow they generated on their Bernardsville investment properties. Why was it so hard for me to find these properties in my home town?
Positive cash flow truths exposed
As I matured in my investment career and obtained my real estate license, I started to question these investors; specifically, I researched their Bernardsville, NJ investment properties. My findings revealed that these investors either put a substantial amount of money down on the Bernardsville, NJ investment property they purchased or they had purchased it many years ago and had little or no mortgage resulting in positive cash flow.
Buyers approached me regularly to look at local investment properties. They wanted something with substantial positive cash flow. They knew the returns on their money would be positive but were under the wrong impression that this return would be the result of positive cash flow. They were also discouraged to find that they did not have enough of a down payment to create that positive cash flow.
“Low-ball offers”
Early in my career, I presented many low-ball offers on investment properties for buyers that were not astute in the Bernardsville, NJ investment property market. Investors not familiar with Bernardsville New Jersey have difficulty understanding why Bernardsville investment properties sell for such high prices lacking any positive cash flow.
Having lived in Bernardsville New Jersey all my life, I understand the higher values of property in the Bernardsville, NJ area. I found that the most investors that I have worked with focus on the monthly positive cash flow rather than the long-term appreciation. Herein lays the key.
Appreciation out weighs negative cash flow
Throughout my career as a realtor, I have purchased many Bernardsville, NJ investment properties with negative cash flow. Actually, there was not one investment property that generated a positive cash flow. Some investors criticized me for purchasing these properties, and I can understand their perspective yet they failed to see the market conditions and the upside potential for appreciation and success.
A prime example is when I purchased a Bernardsville, NJ investment property in 2002 for $550,000 and the cash flow was negative by $1,200.00 per month. I knew that if I did not buy the property at that price, another local would. I had three appraisals which all valued the home in the $470,000 range making it impossible to get a mortgage. The fourth appraisal came in at $550,000. Thankfully, he was a local appraiser that understood Bernardsville values.
Was this a good investment? Most would say “NO”. I sold it two years later for $745,000. I did this on three different properties in Bernardsville in the years 2000-2004. My return on the investment was the key to profit irregardless of the cash flow. Of course, if you bought in 2004 or 2005, you would be in a serious mess today in 2011.
2011 is the time to buy real estate
The time to buy in the Bernardsville area is now. This is the first time in years investors can take advantage of the low prices to secure positive cash flow, appreciation and low interest rates. There is always the option of buying an investment property in the outlying areas for less money and the cash flow is almost always positive, yet the appreciation is typically lower.
Bernardsville NJ Real Estate Solutions - Charles "Chuck" Hendershot
I specialize in representing my clients in the purchase of Homes for Sale in Bernardsville, Basking Ridge (Bernards Township), Bedminster, Bridgewater, Peapack, Gladstone, Far Hills and Mendham, NJ. Whether you are buying or selling a new home, town house, condominium or apartment, EXIT Realty Group will help you find a property by map, MLS listing number, or price.
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