How I FAILED but actually SUCCEEDED in New York City

[Nazimcan S.]

It's about 11pm, at this slightly inappropriate hour the seller's broker wants to know if I can close or not. With Brandon Turner's book "The Book On Rental Property Investing" in one hand, I'm thinking about a last minute miracle I can conjure up. Thankfully my girlfriend is supportive of such madness. I was stressed because my offer was accepted however my lending strategy fell through. Yes, the famous house-hacking with an FHA loan strategy. Before that, here's some background.

I got a W2 position about 10 months ago JUST so I can qualify for an FHA loan. I love that job now however, it is a startup company. We are 700k financed and currently in the process of raising a bridge round of 500k to get us to a Series A round of about 5 mil. All good so far. Yay. What I didn't calculate was that, in between funding rounds our team sometimes doesn't get payroll for 2 months or so until investment dollars hit the bank. Guess when this happened? You guessed it. RIGHT WHEN I FOUND THE DEAL. I've been looking aggressively in the South Bronx area for about a year now and nothing, I repeat NOTHING made sense. Nothing seemed to cash-flow. Many times I said "This is impossible to do in NYC". The classic hot market adage. I don't know. I didn't give up. I went harder. Like making friends with local Deli owners to keep an ear out for you type hard. Finally, not through my Deli friends 😃 but through my broker I got something. By this time my eyes are pretty well-trained to analyze a property. One look and I knew. Could this be possible? Did I just find a deal?

Cash-flow; When I'm living in the property - 1500$, when I move out w property management included 800$ on 3 unit multifamily with a finished basement. 3 over 3 over 3. 1900$ rent per unit after rehab which was generously estimated at 30k. My calculations included rehab costs. Cap rate 6.5.% Saw the property, everything looked as expected. I made the offer right away. 570k asking, seller's concession closing costs, which is how I would finance the rehab. Offer accepted. That day I think I felt like that scene in the Matrix when Neo starts seeing the code and the music starts.

Then I got the phone call from our company; we are not getting payroll for another 2 months. Here is where I have to thank @Darren Sager for putting on the BP NYC events on where I met @Matt Faircloth. I'm very thankful to @Matt Faircloth & @Elizabeth Faircloth for being incredibly supportive and mentoring me through this most critical time. The reason I even got this confident was because I knew I had the right people in my corner. I don't know if I'd have the audacity otherwise. The underwriter said no way we can lend if you dont have those paystubs like a square peg in a square hole. I had delayed the process too long already while trying to figure out what to do and the seller wanted answers or was moving on. I confessed. Not happening. And last attempt I said "Hey let's seller finance this. 5 year note, higher interest rate?" The seller had a mortgage so that didn't happen either. So I failed.

Here is the thing though. I learned one thing. Nothing is impossible. I FOUND A DEAL IN NYC and if it wasn't for an unfortunate reality of life, I would have locked it down like it's nobody's business. There are deals to be had. Even in New York City. I experienced this first hand. And I will find a deal again. I've gained confidence and know what to look for and HOW to look at it. This alone is success to me. I never thought my full on BiggerPockets post would be something like this. I'm going to go take a bubble bath now. Thanks for reading and make sure to connect with me, you don't have to be a Deli owner. 

[Wayne Smith]

you're a success in the making at least you took action and you learned a few things in the process you didn't back down your confidence should be at an all time high and feel good about yourself cause your next deal you get under contract it's a win win God speed