How do I make my next real estate move?

Question

Hi everyone. I began house hacking a 4-unit property in NYC last year. After refinancing recently, my cash flows are about + $700/month (while still living in the property). I am looking to move closer to my parents in NJ relatively soon and still want to continue to make smart real estate investment moves. I am planning to keep the 4-unit property but not sure what my next strategy should be especially with so many options out there. I also don’t have much saved up right now because I recently rehabbed an apartment in my building. Any advice??

David Thomas · Answer

@Mary Baccellieri great input here from @Jonathan Greene and @Mark F. and I would have suggested house hack as well with a low down payment loan as owner occupant.  I second what Jonathan said in terms of the competitiveness of the northern NJ market, as my investor clients are having to be very aggressive with bids on all types of properties (fix and flips, buy and hold, and also seeing this in many SFR homes on retail side).

Also - make sure you factor in the possibility of tenants (if you opt for multi family) holding back on rent due to COVID-19 for the next several months.  This is clearly something you’re aware of with your rentals in NYC.  I state the obvious only because you did mention funds being low, so think about how many months can you deal with that until it creates a major concern  for you.

For your scenario (if it was me) I love the idea of taking your time to find an outdated single-family that you can live in and fix it at your pace, which would allow you to be near your family and not deal with more tenants and higher risk factors.

Mark F. · Answer

100%  I do househack in North Bergen now and I'm saving a lot. I'm going to do the same next. 3 or 4 unit, I just need to get on Jonathan Greene's mailing list ;)

Mary Baccellieri · Answer

@Mark F.

Awesome! Thanks for the link and for your insights. Much appreciated

Mark F. · Answer

There are conventional loans that only require 3 to 5% down. They have certain requirements such as credit score, etc. Find a good mortgage broker and they can discuss all your options. When my mortgage guy started telling me all the options there were on loans available to me, conventional FHA VA, my head started spinning.

Mary Baccellieri · Answer

@David Thomas

Thank you for the input! I agree that I am at an advantage in terms of time because it’s really a matter of when I want to move- hopefully soon (in about a year) but can be longer if need be. I am going to keep an eye on the markets in the area. Looking to move somewhere in Monmouth County- Hazlet, Middletown, Red Bank or Aberdeen-Matawan are my top choices. The rental market here is definitely not the same as NYC so that is something to consider. I like the idea of single family rental- less tenants, less turnover.

Jonathan Greene · Answer

@Mary Baccellieri, it would be easier if you can wait and use HELOC, but as others said you can get 3% conventional loans if you have all the other pieces working for them. Because you have experience house hacking now, you are way ahead of the curve. Coming from NY to NJ too many people think there will be deals on renovated multis, but there are not. Almost all multis that aren't trash pits get multiple bids and in hotter areas they can sell up to 750k for large 2-units in Montclair. Your town choices and comfort level will play a role in what and where you can go with your next one. Since you aren't in a rush, you have the time to examine the options near your parents and see what the numbers look like.

Our Friday Zooms are open to anyone. Just use that link that Mark dropped in right at noon every Friday and it will go right to the video chat.

@Mark F., you're hired. :)

Mark F. · Answer

Yeah a BRRRR has a lot of upside. Done research on HML and as long as you work it in to the numbers its solid. Having a W2 would make me feel good about it as well.

The downside to BRRRR that people talk about on here and podcast is realistically it hinges mainly on the refi. I've yet to do one so my opinion doesnt have much weight. Yup anyone can join. Here's the link

https://trustgreene.us17.list-...

Mary Baccellieri · Answer

@Mark F.

Yep! Exactly. The construction is very much worth it to me because you get a brand new house basically and with a lower mortgage (after re-fi) compared to a nice house bought with a conventional loan. On top of that, getting all your money out of the deal after the re-fi to do it again. It’s an amazing concept. I will have to do more research on HML and what to look for when analyzing a deal. I believe that’s the route I will have to go until I can build a strong enough portfolio and make the personal connections needed to use private money lenders. Are the zoom calls open to anyone to attend?

Mark F. · Answer

Thats somewhat of a long winded answer. But for now I'm doing liveable assets. The money is definitely in places that need more renovations. The plan is a fourplex with FHA loan then most likely do HML as Ill have more experience as well. Like you said though most places that need work you'll have to do HML or private money. It'll depend on your situation as well. We just had a great conversation on this with Jonathan's zoom call. We do it every Friday at noon.

Mary Baccellieri · Answer

@Mark F.

Haha! What do you look for in a property before you invest? Not sure if I should buy a total mess and fix it up entirely and reappraise or buy something livable and just rent it out as is?

How do I make my next real estate move?

Most Popular Reply