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Updated over 4 years ago on . Most recent reply
First duplex and VA loan property in NJ!
Investment Info:
Small multi-family (2 units) buy & hold house hack investment in Bergen County, NJ.
Purchase price: $492,500
First rental property purchase with a VA loan used to house hack.
What made you interested in investing in this type of deal?
I wanted to start my side business of RE investing and this was my second house hack but first duplex. Numbers in northern NJ only make sense on 2 and up units most of the time.
How did you find this deal and how did you negotiate it?
MLS via my realtor. He's an investor as well so he knows how to run numbers better than I do. We used the appraisal that came in low and certain repairs it needed to negotiate a lower price after my offer was accepted.
How did you finance this deal?
VA Loan but ended up having to put down around 2% due to low appraisal.
How did you add value to the deal?
I renovated the first floor and got a tenant in at market rent (previous tenant was under market value but left before closing). Raised rent on the second floor and have cleaned up the property and addressed deferred maintenance issues.
What was the outcome?
I've been able to live in the property and have the tenants almost cover all of my mortgage. Once my second floor tenant leaves and I do light renovation to it, I'll be above my mortgage. Once I move out, I'll be cash flow positive.
Lessons learned? Challenges?
Inspection process on a VA loan can be tricky. Northern NJ is very competitive to say the least, at first, but if you can add value where others can't, you can win the bidding process. Patience is a virtue and I learned the process is much different in NJ than Florida.