Navigating New Jersey Real Estate: Tips from Broker Bruce Parker

Dylan Silver (00:01.102)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, I have a real estate broker and owner of best school of real estate in New Jersey, Bruce Parker. Bruce, welcome to the show.

Bruce Parker (00:18.014)
Hi and thank you very much for having me today. I appreciate it.

Dylan Silver (00:20.672)
It’s a pleasure to have you. I always like to start off at the top by asking folks how they got into real estate.

Bruce Parker (00:28.968)
So my quick story about how I got into real estate was there was a house that I wanted to buy and the real estate agent that had listed the house, I really feel cheated me and I didn’t get the house. And I said, I am never going to let somebody take advantage of me again. And I went and took my real estate course to get my real estate license, which doesn’t teach you anything about how to do business. Just teaches the rules and regulations. However, I did get really excited by it. And next thing I know is I…

Dylan Silver (00:49.08)
Daddy.

Bruce Parker (00:58.024)
got my real estate license and did it part time and here I am 35 years later doing it full time.

Dylan Silver (01:05.612)
You know, I went through a real estate school in person. It was Champion School in Fort Worth, Texas. And you, the owner of a real estate school, I think these are really great. people that, everyone that I know that goes, including myself, feels like we have a deep connection. I’m very proud to have gone through the school that I went through. And to your point, Bruce, you know, going through real estate school doesn’t teach you anything about being a, you know, profitable realtor.

but it will teach you about all the laws that you need to know but you can’t ever really use because you’re not an attorney. So here’s all the laws, just don’t ever use them.

Bruce Parker (01:43.026)
Right.

Dylan Silver (01:44.748)
Now I’m curious, know, when you were going through maybe considering being a realtor, you mentioned not having the best experience with a realtor out there. I’ve actually had a lot of people have a similar story. Hey, I had a lender didn’t like the lender or I said, hey, I could do what they’re doing. I had a realtor said I could do what they’re doing at that point in time. Did you did you do this part time? Were you doing it? Did you decide I’m going to go do it full time? What was the process like for you?

Bruce Parker (02:13.47)
So at the time that I tried to buy this investment property and I feel that the real estate broker really cheated me and I still remember his name which I’m not going to say and he’s retired now also. I was operating a trucking company. I had a trucking company that went all throughout the United States. I had ICC authority to 48 contiguous states and what I did was I operated with owner operators who drove their own trucks.

and they got paid a percentage of revenue and I also worked with guys who drove my trucks they got paid a different percentage of revenue and it was all men, I worked all the time with men and when I started working with real estate especially when I first started it was all women and working with women is much more difficult than working with men so what happened was one of the presidential administrations deregulated the trucking industry

all of a sudden trucking wasn’t as profitable and it was very expensive in New Jersey and I had already gotten my real estate license and gotten a couple of deals under my belt and so I sold all my trucks, cashed out and just started doing real estate full time.

Dylan Silver (03:20.76)
So did you sell the business as well? Was the business in a position where you were able to sell it or you sold the inventory basically?

Bruce Parker (03:27.048)
So my ICC authority was no longer worth anything because they deregulated and anybody could get ICC authority. the trucks, some of them were 10 years old, so they sold for whatever the value of the trucks was. And my customers, all short, they all moved to China. One of them moved to Israel. So my main customer base all disappeared all around the same time, all from things like deregulation.

Dylan Silver (03:52.92)
Now this is a real estate podcast, but a lot of the guests have businesses and we talk about scaling businesses. In that vein, the trucking business, is there anything maybe that you could have done differently or is it just one of these things that’s kind of like luck or the draw? We don’t control the laws. I mean, maybe some of us do, but is there anything that people can do maybe if they’re looking at a business to make it so well, hey, if I need to exit it, I’m in a sellable position versus maybe

I have to kind of sell everything.

Bruce Parker (04:24.606)
systems and procedures to be ironclad and to be exactly duplicatable at any whatever scale you go to. That’s the important thing. And I didn’t have those in place in the trucking business. It was really running everything by the seat of my pants. in the real estate brokerage, it’s kind of the same thing. It’s more difficult to sell a real estate brokerage because the agents could just leave. They don’t stay. You don’t have contracts that

make them stay with you. But I see things happening in the real estate industry that remind me of what happened in the trucking industry and the deregulation of the trucking industry is what took all the profits away. Prior to the deregulation, the ICC had a regulation, which is a federal authority, that said every transportation move you made had to have a profit. So we could put our prices very, very high because everything had to have a profit. Once they deregulated, you could do loss leader.

Dylan Silver (04:55.48)
Ryan.

Bruce Parker (05:22.93)
you could take a load from New York back to Chicago just to get your truck back to Chicago and you could do it at a loss. And all of a sudden the rates came way, way, down. Now the same thing’s happening in real estate. We’re deregulating to an extent. These big downline brokerages, the multi-level platform brokerages, they’re not being as well regulated as before they were before they came into existence. And I’m seeing the same thing.

Dylan Silver (05:33.058)
Yep.

Dylan Silver (05:50.424)
You know, and I think we’re going to see a lot more of AI and technology tools enhance the knowledge base of the average person. I mean, outside of here, I’m in a software engineering boot camp and I paid for the boot camp. I paid for the school about a year ago. And between a year ago and now, basically, software engineering has completely changed because you don’t really need

And we’re just at the tip of the iceberg. You don’t really need software engineers in the same capacity that you needed them before, because you can find all the syntax errors using a computer now. Hey, find you literally will say, hey, find the syntax errors, it’ll find the syntax errors for you. Hey, what do I do with this? It’ll make it and modulate the code. And now we’re right there where, you know, we’re not there yet. But we’re right there. We’re at the we’re at the cliff where maybe someone writing these contracts, maybe even

paralegals and attorneys are not going to be as necessary because we have someone or something who’s going to be almost as good in some cases.

Bruce Parker (06:56.318)
Yep. But I do believe that the thing that might save us is when people start to re-realize that all real estate is local. And in the town where my office is in Highland Park, New Jersey, you could be one block away in distance and your house be worth 40 % less based on some factors that happen in the town. And you can’t get that on the computer.

when you have a big algorithm that’s pulling out values by looking at what your tax assessment is and applying the equalization ratio to come up with a number of what your market value is, tax assessments, you can’t even make a tax appeal claim unless there’s a 15 % error. So that means that those numbers are always going to be at least 15 % off. And if you look at Zillow on the disclaimer, it says we’re plus or minus 15%. And the reason is that in order to appeal taxes, you’ve to be plus or minus 15%.

So it all kind of batches up together. local knowledge is going to be more important as we move further, further down.

Dylan Silver (07:56.448)
It’s huge. You mentioned, think, know, one street over or one block over. It’s exactly true. You know, I am an investor and I’m a wholesaler in distressed real estate out here in Dallas. And some of these areas, I’m sure you have some of a lot of them in New Jersey, right? Some of these areas, you’ll have a super almost Victorian street and right next to that Victorian street will be kind of distressed property, maybe even on the same street.

I lived in Antonio for five years before moving up to Dallas. There’s an area in San Antonio, the St. Mary’s Strip, which is really kind of a nightlife type area. And right along that area, you have heavily distressed tiny homes, know, maybe homes around a thousand square feet, maybe even less. And then along the same street, you’ll have these enormous, you know,

Bruce Parker (08:25.012)
Exactly.

Dylan Silver (08:51.022)
sprawling Victorian homes that are heavily distressed it looks like pre 1950 on Pier and beam foundations that need work and you’re just looking at these things thinking like this is an amazing opportunity Why aren’t these being snatched up? Well, someone’s got to own it

Bruce, before we hopped on here, you mentioned that you have also been an investor. As someone who’s an aspiring investor and I work with investors, what’s been your experience as an investor in New Jersey?

Bruce Parker (09:20.404)
So New Jersey has more regulation than any other state and we’re so, so anti-landlord in our regulation in New Jersey. Very difficult long-term. Flipping in New Jersey, we also have some issues with because each municipality has its own set of laws and certificate of occupancy inspections that are very tough. Vacant property registration, which in some towns is $2,000 a year for a vacant property registration. So all kinds of extra issues in New Jersey, but New Jersey is

the number one state for people moving into and then moving out of. People live in New Jersey for the least amount of time of any other state. So the good news is that means there’s plenty, plenty, plenty of activity in New Jersey. There’s always stuff popping around and for sale. But we’ve also got a ton of competition in terms of flippers and people who are buying stuff off-market, wholesalers, et cetera.

Dylan Silver (10:16.046)
So you mentioned earlier on in the show here that you’re seeing maybe a mirror ring of 2007 to today, right? And I’m curious, does this mean that home prices maybe in the foreseeable future may stall or may go down with a market crash?

Bruce Parker (10:34.836)
So we’re seeing prices stalling a little bit now. I’ve always found that the prices in California and Florida stall 18 months before they do in New Jersey. And part of the reason is it takes so long to foreclose in New Jersey. New Jersey is the second longest amount of time for foreclosing in the country. Delaware is number one. New Jersey is number two. So it takes five years to foreclose in New Jersey. In Florida and California, it takes just months to foreclose.

We’re offset from their market by about 18 months. So we’re seeing Florida all of a sudden have a down market. We’re seeing parts of California, including San Francisco, all of a sudden having a down market. So I’m anticipating that within 18 months, we’re going to have a down market here in New Jersey.

Dylan Silver (11:18.71)
Now, where’s the opportunity in a down market? I’m thinking for people who are looking for distressed properties, you got to buy a lot of properties. But at the same point in time, you got to buy them so deep or at the right price where you have the ability to exit and still make a profit. So what do people do if you’re an investor and you’re looking at this as an opportunity? How do you underwrite your deals? Not knowing what the market’s going to stop at.

Bruce Parker (11:42.654)
The good news is the rents will always stay high in New Jersey and there’s always a huge demand for rent. Big waiting list for Section 8 in New Jersey. Big waiting list for affordable housing. So the play when you know the market or you think the market is going to go down is really that you’re going to buy a property that’s distressed, get it at a discount, do things to improve the value and hold on to it for a few years until the value starts to recover. And typically values start to recover like…

We’ve never had a period of time which more than seven years. So you’re going to do a seven year play potentially. that really, in hindsight, that really looks good to me. A seven year play is really really sweet time. I counted up the other day, by the way. In my career, I’ve bought and sold 50 houses. The 50 houses, there’s a lot of them that I wished I just hadn’t cashed out and taken my profits at that time.

sitting here now today. a lot of the houses I did hold for a long time and those houses when I sold them I did make a lot of money. I just always made sure that the carrying costs were equal to the rent.

Dylan Silver (12:51.981)
Now-

This is gonna be an interesting time that we’re about to walk into, right? So people are gonna be looking at the rents, they’re gonna be realizing that the homes may not appreciate the same way, they may have to hold onto it for a longer period of time. What’s your perspective on single family versus multi-family versus short-term, mid-term, long-term housing? I don’t think you can go wrong with any of them.

I mean, if you do Airbnb, maybe you have to be prepared that you won’t be able to do it in the near future in the city that you’re in. But if you had to go to one rental or one option as an investor, which one would you pick?

Bruce Parker (13:32.628)
So for right now I would do one and two family homes and I would do them in neighborhoods that were lower income neighborhoods so that you always have the availability of Section 8. People sometimes tend to stay away from Section 8 but there’s no reason to do that. You get that check in the mail every month and if your main complaint with Section 8 is that they do an inspection, well gee whiz are you going to be a slumlord or are you going to be an investor? So a single family house in an area that has

lower-income people living in the area. three-bedroom house is always the best because that gets you your highest Section 8 rent and then just hang on to it until the market turns around again.

Dylan Silver (14:12.056)
We’re seeing in Texas, specifically, a lot of investors who will do maybe new builds and flips. Maybe they’ll have a few rentals. But just hearing kind of the difficulties that are involved in investing in New Jersey and having lived out there, I don’t know how common that is for there to be single family home investors out there in New Jersey, maybe less common. But I’m curious to get your take on.

having invested in outside of the state or maybe knowing investors outside of the state versus investing in New Jersey. Are there actually less real estate investors, you know, on a small basis out there in New Jersey?

Bruce Parker (14:52.052)
The problem with New Jersey is there’s no inexpensive homes. You’re not going to find a home under $300,000. And the taxes are the highest in the nation. So the real estate taxes. We average $10,000 per property now. The rest of the nation averages $4,000 per property. So it’s a little more challenging in New Jersey. But you do have more people, better educated people, higher income people. And no matter where you are in the state, you’re close to either Philadelphia or New York City.

Dylan Silver (15:01.26)
Really?

Bruce Parker (15:21.254)
opportunity for people to work jobs.

Dylan Silver (15:24.502)
Are there out of state investors investing in New Jersey? Of course, we see a lot of them down here.

Bruce Parker (15:27.408)
Absolutely, And a lot of, I would say, not quite first generation people, but maybe one and a half generation people that are buying houses all over the place for cash. I have an investor who put nine of his rental properties on the market with me a month ago. He’s harvesting, right? He feels that we’re at the top of the market, so he’s gonna get rid of all of his rental properties that are in the lower income neighborhoods.

Dylan Silver (15:38.766)
Yeah.

Bruce Parker (15:56.924)
nine of them at a time and the market is going crazy but it’s all people who are these first generation or one and a half generation people and they’re paying cash or very large down payments for the properties.

Dylan Silver (16:09.708)
Now, I’m seeing a lot of, know, especially working with investors, a lot of new financing strategies, whether it’s DSCR loans, or some of the more creative financing things like from, you know, limited money down or limited credit, you know, assuming loans, this type of thing. I actually love the this idea because I think it’s creative as long as you don’t get yourself into trouble with it specifically being a real estate agent and you being a broker is more

you know, risk and exposure. But if it’s written with an attorney, attorney written documents, I think this is a great opportunity for people. And I think more people, honestly, should look at how they can get into real estate, creatively. I’m curious to get your perspective on some of these more creative ways that people are securing property.

Bruce Parker (17:00.094)
So in all of the three cycles that I’ve been through, in the down markets, I’ve gotten people to hold mortgages for me. And the building that I have my brokerage in, the seller is holding a mortgage. I bought it 20 years ago and they’re holding a mortgage. I have a commercial building in another town in New Jersey. I bought that with the seller holding a mortgage. Paid it off since then, but the seller is holding a mortgage. I had a beachfront property in Virginia Beach on the outer banks at Sand Bridge.

and the seller held a mortgage for me. So in every down market there’s an opportunity to get sellers to hold mortgages. Now what did you have to do to get them to hold mortgages? You had to get them to trust you and you had to probably give them a little bit higher interest rate than they could get by putting their money in the bank. really saves a lot of money to have somebody hold a mortgage for you because you don’t have appraisal costs, you don’t have application fees, doesn’t really affect your credit right away. And again, one of the things I’ve done and it’s, you know, just

my old-fashioned way of doing things. The person who was holding the mortgage on my building were my offices, right? They’ve been holding that mortgage for 25 years. Every time I write them a check, and it’s $947.88 every month, every time I write them that check, I write them a handwritten note. Sometimes I send the pictures of my kids graduating from college. So she’s about 85 years old now, 86 years old now. And my payment, my mortgage payment every month that comes to her,

is the highlight of a month.

Dylan Silver (18:29.358)
Real estate strategies, right? gotta be creative here. Bruce, we are coming up on time. Where can folks go to get a hold of you or to learn more?

Bruce Parker (18:41.652)
So for my real estate school, it’s bestschoolofrealestate.biz. And I do teach pre-education for New Jersey licensing. We’re very close to having a Florida school also. So shortly I’ll be able to do Florida licensing. And we do do continuing education, mentoring, and helping people to build a real estate career.

Dylan Silver (19:01.79)
thank you so much for coming on the show here today.

Bruce Parker (19:05.0)
Let me get my URL. It’s bestschoolofrealestate.biz. bestschoolofrealestate.biz.

Dylan Silver (19:12.632)
Thank you, Bruce.

Bruce Parker (19:13.908)
Thank you very much. appreciate you having me today. Thank you.