All Forum Posts by: Alejandro Tirso

Hi!  I am currently in the market for properties in Hudson County, NJ.  The location is less relevant than the home style frequently found here--railroad style apartment  in small multi-fam homes.  Essentially you can have a top-bottom 2-family, which usually opens a door at the front of the unit.  You land in a "living room/bedroom" pass through maybe one or two small "living room/bedroom(s)" and usually arrive in a kitchen with a small bathroom attached.

These apartments are small.  I'm talking like ~600 sq ft small, and homes are always attached on both sides, so no room to widen.  Any creative ideas for use of space?  Most tenant-occupied homes for sale lead me to believe this market is less worried with cosmetics and more intrigued spending as little as possible to have a place to sleep.  

We are considering moving the entrance of the apt to one of the middle rooms that way you avoid passing through all the bedrooms to arrive to kitchen/bathroom.  All ideas are welcome.

@Karen Jackson I’ve seen leases that define the order of payments, stating any monies received from tenant would go to 1) interest on late fees 2) late fees 3) past due expenses, etc etc. Rent is the very last item that gets paid, therefore her payments to you wouldn’t make it to her rent and you could evict based off non-payment of rent.

The person that gave me this lease rents almost exclusively to Section 8 in Philly so I’m sure he constructed it that way purposely.

 You can. I just got my first.  It gets more difficult with each additional unit but to my knowledge you can get up owner financing up to 4 units.  

@Ivan Loza Consider owner-occupying a multi-family.  Even if you're living rent-free at your parents, how long would it take you to save up a 20% down payment for a multi-family?  Probably longer than 5% down for an owner-occupancy.  Your single and young; you could duplicate this in a triplex every year.  Haven't run your numbers personally, but I think it'd work.

You eliminate a lot of the competition you have in SFH market at the higher price points in a multi-fam. You could even get one that needs some work and add equity through rehabs. David Greene talks about getting out of your comfort zone and harnessing momentum to make sure next deal is better than last. Seems like you know what you're doing in SFH, jump into multi and get tenants to pay your portion of rent + mortgage so you're still living free while building equity!

Either way you're killing it!  Good work.  

Good job!  Next domino needs to be 1.5x bigger than last to keep geometric progress. Don’t lose momentum!  

Great notes on the re-fi and keeping tenants in there helped keep holding costs down even if it delayed rehab time.  Awesome! 

I agree with @David Smith .  Def super hot in the area, but I've seen some multis sitting on the market for 45+ days at this point, and like @David Flores I've been scorching the Earth looking for a deal.  It's hot but has slowed down a bit.  Either way if, keep analyzing and if you find something that hits your numbers go for it!  

I've looked hard on BP about Union City, and it seems to be one of the tougher cities for an investor from a municipality standpoint.  Will be interesting to see how new ordinances affect prices.  

@Marc Weisi Does this rent-increase rule apply to owner-occupied 3-families?  Would the rule kick in after you move out?  

@Brandi Graham I started in this in November and have learned tremendous amounts thru BP. Listen to all podcasts and read all books before paying that much money for a mentor.

You could be you first house with that as a down payment. Never learn more than through your own mistakes. You’ll likely make some $$ off it too even if you make a mistake.

GoSection8.com

Hello All,

I'm dealing with the age-old and costly problems of MOLD and roof replacement.  I've read about identifying roof issues as a costly part of rehab (check. identified.), as well as been told by many non-investors that mold is a "nightmare" and to stay away.  I've read through the forums and J. Scott's "Estimating Rehab Costs" book and cannot seem to find a consistent answer!  Some say "Mold is gold" because everyone is afraid to touch the property and others say not worth it.  

Here is the situation:

Off-market, bank-owned property. Being it's off-market there is no listing price but estimated ~$140k. I'm having trouble calculating ARV because this is NJ and it's not a model development, meaning this home's structure is different than most in the neighborhood. Given its size and location though, I could see ~$260k being a fair estimate.

Being this would be my first flip/BRRRR (still TBD), estimating costs is my weakness (despite having read J. Scott's book). I've seen mold remediation costs upwards of $40k and in the book ~$10k. There is no question the basement is infested with mold, but it's unfinished meaning demo would be minimal. The realtor who showed me the place said it was because the home's been winterized and electric is off, therefore the sump pump has been off. Not sure if mold was there beforehand or that is the true issue.

As far as the roof, I'm looking at replacement costs around ~$8k I believe.  There seems to be mold in one of the bathrooms upstairs but a very small amount.  I imagine that's due to roof damage and leakage.  EIther way I'd lake to replace/update both bathrooms.  

The only other problem is I notice uneven flooring, meaning in certain bedrooms there is a gap between floor and the molding.  Seems like that could be a minor issue that can blow up into something costly, but again I don't know enough.  I know I need to get it inspected and all that to get best answers but anything would help!

Numbers:

"Asking" = $140k (considering offering $100k)

ARV = $260k

Construction Budget= $75k (am I shortchanging this.  it's NJ!  Roof, mold remediation basement, 2 bathrooms)

Potential CF after Re-Fi--Only $70/mo, but I'd literally be in the deal for no money at all after re-fi.  That CF is including money aside for vacancy, repairs, capex, lawn care, etc.