Experienced MultiFamily House Hackers in Northern NJ

[Lance McCaskill]

Hi!

I am a new real estate investor looking to purchase my first deal. I have spent a lot of time reading, watching webinars, listening to podcasts, educating myself and learning how to evaluate deals. I currently pay rent in West New York and am looking to make my purchase in Hudson County (North Bergen, West New York, Union City, Jersey City, Bayonne), Southern Bergen County (Cliffside Park, Fairview), and potentially Essex County (for the right deal). My investment strategy is to "house hack" a cash flowing, owner occupied 2-4 unit multi family home, that also needs some rehab, using one of the FHA loan options. My budget is $600k, though I am looking to spend less than $180k/unit (depending on age and/or condition property). I work in Midtown so I am trying to keep my commute close to 1 hour. If you have any experience purchasing a deal like this yourself in the last few years, I would love to connect and pick your brain/learn from you and learn about your experience (can you send me a dm)? Also, do any of you know someone that has experience converting/adding units (such as converting the basement into a 3rd or 4th unit) in these areas? Or maybe did you analyze converting/adding a unit and decide not to?

[Justin McElroy]

Hey @Mark F. - just want to add some info here. Traditional FHA loans may not be available for use on all properties in distressed/unlivable conditions, however, they have a product called the FHA 203K loan, where, you can buy a property in any condition, and roll the purchase and rehab costs into the mortgage. In this case you still only need to bring at least 3.5% down. How much of a mortgage you can qualify is determined by your financial position and they also separately take into account rental income on the property. I forget the qualifier, but when the property is fully rented out the income (as determined by an appraiser) needs to be over the monthly payment by a certain percentage. This is scrutinized more on 3-4 families, and not so important on single families or duplexes.

If you're looking to owner occupy, this is an incredible option for a first time investor, since not only is it easy entry, but you also are able to leverage a 203K Consultant, who monitors the work done by the contractor and signs off that the work has been completed to the FHA's standards, before the mortgagor releases funds to the contractor. Shady contractors most likely won't touch these types of jobs either, so you know you will be working with quality contractors.