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Flipping Houses in NJ: Your Guide to Making Profit

Are you looking to get in the house flipping business in New Jersey, but are not sure if you should invest in the Garden State?

You’re not the only one with this obstacle, especially with so many outdated and misleading posts out there.

Fortunately, you’re about to get all the updated information you need to make an informed decision. In this post, we’ll talk in-depth about flipping houses in NJ to help you make an informed decision. 

Why Should You Consider Flipping Houses in NJ?

House flipping business can be successfully performed in many states, but what makes New Jersey more appealing? Here’s the answer:

The Market Value Is Increasing

According to RealityTrac.com, the average selling value of a property in New Jersey in 2023 is $423,000. That’s a 5.5% jump over 2022’s $400,700. It’s also slightly higher than the national average in the US, which is around $348,126

In other words, house flippers in NJ can make up to 17.7% extra income per house flip in 2023 (compared to 2022), which could result in thousands of dollars in profit. 

The State Is Beautiful

New Jersey has over 130 miles of coastline, making it full of beaches and beautiful scenery.

While that doesn’t directly affect the real estate market, it can attract new visitors who could be interested in buying a new home.

The state is also known for its diverse culture, which is a plus for flip investors since the state is constantly getting multiple ethnicities who might be interested.

There’s a Variety of Properties

Despite being a good state for real estate investing, New Jersey’s residents leave the state for warmer and more affordable states. While that may seem alarming, it’s a gold mine for the real estate business.

Because people are moving out, New Jersey often has many properties available for flipping. They could be fixer-uppers that require a decent amount of TLC or move-in-ready homes that won’t cost too much to fix or upgrade. 

This allows new real estate investors to test what it’s like to handle both types of properties and get a feel for the market. 

Is Flipping Houses in New Jersey Profitable?

According to Nasdaq, New Jersey is one of the top five states in the country for flipping houses, yielding an average of $135,000 average gross profit in 2022. 

That being said, flipping houses in NJ isn’t just profitable, but it’s the 4th overall state regarding gross profit. 

Even if you are struggling to secure a property, hard money lenders can facilitate the process until the property is sold again. The revenue should be able to cover the loan interest and yield profit as well.

Best 5 Cities to Flip Houses in New Jersey

1. Newark

As one of the best cities in New Jersey for house flipping, the real estate market in Newark is highly competitive. This makes it a bit difficult for those who just got into the business to make a good profit. 

Properties in Newark sell after around 50 days from the date of purchase. Keep in mind that those 50 days don’t include the renovation duration.

In July of 2023, 116 homes were sold, which is around 33% less compared to the 174 sales of the previous year. 

2. Merchantville

Merchantville may be a small city, but the property value has grown nearly 50% between 2022 and 2023. This made the real estate market and the house-flipping business more fruitful than ever. 

Unlike Newark, Merchantville isn’t as competitive, making it a good place to start if you are a first-time house flipper with little to no experience

Properties also sell much faster compared to Newark, averaging only 13 days on the market (not including TLC) compared to Newark’s 50 days. 

While the waiting time is shorter, the smaller population may occasionally restrict the number of properties eligible for selling and flipping. 

3. Toms River

Toms River is one of the larger cities in NJ. The property value growth may be fluctuating in the city, but the overall curve over the past years is showing a marked increase. 

Properties in Toms River sell after around 48 days, which is a relatively longer time compared to Merchantville. However, the number of properties sold per year is high enough to compensate for that.

House flippers can invest in more than one property simultaneously. According to Redfin, 151 properties were sold from July 2022 to July 2023. 

4. Roselle

The flip market constitutes over 20% of the real estate market in Roselle. Additionally, the median sale price increased from $265,000 in 2020 to a whopping $477,500 in 2023. 

Moreover, the average sale price increased by 19.4% from 2022 to 2023. 

This jump makes Roselle one of the best cities in NJ for the house flipping business in the meantime. The listing time isn’t long as well, averaging around 35 days for a property to sell. 

5. Gloucester City

Gloucester City has the lowest median property price on our list. Yet, it remains one of the most competitive cities regarding both real estate and house-flipping businesses in the state.

The lower price allows investors to get into the industry even if they don’t have the money for it, thanks to private money lenders. 

Further, homes in Gloucester City sell after around 18 days, allowing for quick revenue should the investor repair the property quickly.

How to Start Flipping Houses in New Jersey: 7 Steps

vector graphic showing an illustration of a man furniture flipping

Step 1: Do Some Research

While the information mentioned above can give you a general idea of the real estate business in NJ, the fact remains that local research is crucial.

You should look around and learn about different neighborhoods and popular properties in each area. 

You should also research the average home prices in whatever city you choose and understand the costs involved in the process (repairs, renovations, marketing, listing, and transportation).

This should give you a clear idea of the process and the risks involved with it. 

Step 2: Secure Some Financing if Needed

New Jersey investors and house flippers can start with little money, and that’s when a private loan can make things easier

This hard money loan is one of the most popular options for house flipping since it doesn’t have a middle party between the borrower and the lender.

Alternatively, you may get a traditional mortgage, but you’ll have to deal with the hassle of down payments and credit scores. 

Step 3: Find the Appropriate Property

Many houses could be listed for sale, but not all of them will yield good revenue after reselling them. That’s why you should look for properties that don’t require major overhauls before selling.

You should also keep other factors in mind, like the popularity of the area, the surrounding view, the neighborhood’s safety and crime rate, or the amenities and accessibilities. 

Of course, it’s difficult to tick all those boxes, but the more you do, the better value you’ll get from selling the property after renovation.

Eventually, you’ll often end up with many properties in your mind, and that’s what the next step is for. 

Step 4: Get an Estimate of Renovation Costs

The cost of living in the state is high, and that’s why all New Jersey investors should carefully weigh the risks vs. the benefits of each property.

This step acts as a filtration process, as you’ll know which properties will be more valuable to you. It’s also crucial to get an estimate of how much the property will yield by reaching out to contractors.

Various online tools can give you such an estimate. 

Step 5: Renovate the Property

Renovating a property can be a complicated process, but a smart investor will choose what to improve and what not.

For example, renovating the kitchen and the bathrooms often increases property’s value. On the other hand, overspending on them will backfire. Minor plumbing and electricity problems should be set aside to avoid overspending. 

You should have a detailed renovation plan with planned-ahead costs to keep yourself from overspending. You should also ensure that you use quality materials to attract buyers.

The property shouldn’t be listed for sale unless you’re done with renovations to avoid misleading any potential buyers. 

Step 6: List the Property for Sale and Market It

Your property is now ready for sale, but you need to let others know that as well. You can do that by collaborating with a real estate agent.

If you have marketing skills, you may handle that yourself. The cost will be considerably less than hiring a real estate agent, but the process will be fairly more difficult. 

Make sure to have professional-grade photos taken of your property to let your buyers know that you mean business.

Step 7: Close the Deal

You found a buyer. Now, it’s time to negotiate the price and close the sale. Many properties get sold for a lower price than listed. However, that doesn’t necessarily mean that you’ll lose value.

The listed price is often slightly higher than the price you’d expect to sell at. If the client agrees to the price, then you’ve made some extra profit.

If the client negotiates, make sure to have a minimum limit that the client won’t go under to avoid losing money.

Make sure that all paperwork is in order before closing the deal to avoid any legal issues.

How Much Does It Cost to Flip Houses in NJ?

Because of having multiple cities in NJ that embrace the home flipping business, deciding an exact cost is difficult, but it can be anywhere between 10,000 to $100,000 (sometimes more) per house. 

This large cost range depends on various factors:

  • Initial purchase price: How much you pay to buy the property before touching it is probably the biggest factor, especially if you’re taking a house-flipping loan to cover the purchase price. 
  • The real estate market at the time of purchase: The average price of properties can make sudden, unexpected jumps even through short periods. You may end up paying (or lucking out with) a decent chunk of money just because of market changes. 
  • Holding costs: These expenses are associated with holding the property, like house flipping tax deductions and insurance costs.
  • Marketing costs: How much you spend on your marketing campaign is also a factor that contributes to the overall expense.
  • Renovation costs: The cost of upgrades or repairs will increase if the property is in bad shape. If you end up missing or miscalculating the damage, your budget (and profit) will take a hit. 

Is the Current Housing Market Good in NJ?

Yes and no. In 2022, 10,679 properties were sold in New Jersey. Compare that to the 7,892 sales in 2023, and you’ll notice a 26.1% reduction in overall sales.

This reduction is mostly because of the increased cost of living on the global scale lately. Despite still being lucrative, the housing market in the state is seeing considerable atrophy. 

In other words, only experienced house flippers will be able to thrive in the highly competitive housing market in NJ. 

Do You Need a License to Flip Houses in NJ?

Unless you’re the one directly selling the house, then no, you don’t need a specific license to flip houses in NJ. However, you will need other requirements:

  • A valid ID and driver’s license
  • At least 18 years old
  • Clean driving and criminal record
  • The property you sell must be safe and habitable

If you’re the one selling without a real estate agent or not partnering with house-flipping investors, you’ll need a real estate salesperson’s license

Other States to Look At for Profitable House Flipping

If you’re still interested in the house flipping business but not seeing New Jersey as the right market, consider the following states instead: 

Wrapping Up

Flipping houses in New Jersey may be a fluctuating business, but when you take your time to research and gather as many tips as possible, you should get through just fine. 

Do let us know in the comments what you think about this article. If you benefited from it or know someone who might, why don’t you share it? 

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