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Buying on the edges of Lakewood - how crazy am I

 
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amother




OP
 

Post Wed, Aug 17 2022, 2:44 am
We are an american- israeli couple for reference.
DH is in kollel, I work for a us company from home.
We own a home in Israel, but it is in an area that we do not want to live long term and the difference we need to come up with is huge. We currently rent it out - covers the mortgage +plus costs of ownership.

We have also been aggressively saving and have about 70k $ saved bh.
Because of inflation I truly believe leaving the money in the bank is a bad move, and we need at least double that to move to the area we want, if we are going to afford a property larger the a 2 bedroom...

We are fine renting for another 10 years or so.

I grew up in LKWD and was thinking that since its exploding it would be a good idea to but in an area adjacent to a frum area, where the community is expected to expand into, rent out for know, and sell when the area becomes frum. I considering a property in the 300k range. Places like Brick, Manchester, parts of Jackson, Howell, Down Squankem (farmingdale maybe) near frum areas but that don't have frum people yet. I believe that the yeshiva will keep bringing thousands of young couples who eventually need to buy homes and LKWD will continue to expand

How crazy is this?
I don't need the rent to cover all of my costs - I can put about $1,000 monthly in addition to rent. I am afraid of my taxes going up because I have 2 properties, but I will assess if this is worthwhile.
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amother




OP
 

Post Wed, Aug 17 2022, 5:50 am
want to add the reason we are not investing in another cheap property in Israel - is here the banks will only aprove a 50% mortgage on a 2nd property - verses a 20% mortgage in the states.

So my $70k is 20% of 350k
But 220,000k nis is 50% of 440,000nis - and there are no properties anywhere at that price point.
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amother




Amber
 

Post Wed, Aug 17 2022, 6:32 am
Are you also budgeting for some type of property manager? Or what’s your plan for finding/screening tenants and managing the property from abroad?

Also, as someone looking for houses in that price range, all of these houses need work. And like a fair amount of work. Do you have extra money for initial renovations and plan on being in America long enough to see them out?

On paper this isn’t a bad idea but it might be worth looking into an investment group or even a smaller company that needs more cash flow. You’ll get lower returns but much less of the headache of managing assets abroad
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amother




Bronze
 

Post Wed, Aug 17 2022, 6:42 am
I'm not sure where even out of Lakewood you will find anything for 300k.
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amother




Slategray
 

Post Wed, Aug 17 2022, 6:51 am
amother OP wrote:
want to add the reason we are not investing in another cheap property in Israel - is here the banks will only aprove a 50% mortgage on a 2nd property - verses a 20% mortgage in the states.

So my $70k is 20% of 350k
But 220,000k nis is 50% of 440,000nis - and there are no properties anywhere at that price point.
There are but probably not where you would want to live. Places like dimona, yerucham, haifa.
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amother




Lime
 

Post Wed, Aug 17 2022, 8:20 am
My husband does property maintenance in Lakewood and has worked for investors living outside the US. I know he sends them pictures of the property while he’s there. But they also come to the US sometimes to visit and when they do they check on the property themselves.

Think about who your tenants would be if you’re buying a house at that price point. And would they be taking good care of your property.
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amother




OP
 

Post Sun, Aug 21 2022, 7:48 am
amother Slategray wrote:
There are but probably not where you would want to live. Places like dimona, yerucham, haifa.


Prices here are skyrocketed and anywhere that is that cheap has a very slow growth rate, if there is anything available at all - I know that in haifa it is no longer possible to buy at that price point.

I am assuming that something on the edges of Lakewood will skyrocket one the areas become frum. For example - the Lake rivera area in Brick has properties going for 350-400k and a few blocks away in lakewood similar homes are selling for 650k. I am sure that in 10 years that area will be frum. Same for parts of jackson, manchester,howell, in 10 years time if Lakewood continues growing at this rate it will have to spread to these areas.
It is true that I need to consider the war and tear the lower income renters who will rent until the area becomes frum will bring, and upkeep expenses (we can bh afford reasonable expense, I am considering paying the mortgage out of pocket and leaving the rent for taxes and upkeep).
It actually seems like the biggest hurdle will be the israeliand usa tax code - owning a second property in the states/israel bumps me to a level I do not know I can afford...
As it is thanks to obama I pay tax twice on all my income....

We do have family in the states that we visit once a year, I would take that time to keep track of the property.
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amother




OP
 

Post Sun, Aug 21 2022, 8:02 am
Look at the price differences of these homes - similar square meters, conditions, and not that far from each other - difference is frum vs. not frum areas
https://www.zillow.com/homedet.....zpid/
https://www.zillow.com/homedet.....zpid/

Is it not reasonable to expect the frum areas to spread?
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penguin




 
 
 
 

Post Sun, Aug 21 2022, 2:40 pm
Def run this by an accountant because property ownership usually gives you a deduction from your AGI due to mortgage, taxes, depreciation, expenses on US taxes. However Israeli tax law may be very different.

Or you might create an LLC that owns the property, I don't know the details but that might be to your advantage.
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amother




Lime
 

Post Sun, Aug 21 2022, 3:34 pm
It sounds like you know what you're doing and are going into this with your eyes open. I'd say as long as you know nothing is guaranteed, go for it. Like I said Dh does property maintenance. He has customers who own investments way out in Brick and other surrounding towns where no yidden are even starting to look. They rent to low income tenants and make whatever profit that way and down the line are hoping to flip. So you're far from the only one.
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amother




Cherry
 

Post Sun, Aug 21 2022, 6:39 pm
I am doing exactly what you are!!!
Good luck to both of us!
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amother




Mintgreen
 

Post Sun, Aug 21 2022, 7:50 pm
amother OP wrote:
Look at the price differences of these homes - similar square meters, conditions, and not that far from each other - difference is frum vs. not frum areas
https://www.zillow.com/homedet.....zpid/
https://www.zillow.com/homedet.....zpid/

Is it not reasonable to expect the frum areas to spread?


I'm just a layman, but at first glance, this is not apples to apples.

-house in Lakewood is 300sq foot more
- has an additional bathroom
- 2 car vs. 1 car garage
- lot size is not mentioned in the Brick house listing , but it looks significantly smaller

Is it $300k worth of more house/land?
Probably not. Some of it is location.
But location isn't all of it.
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