All Forum Posts by: Alex V.

@Devon Martin as @Matthew Paul accurately said, you need to have a licensed general contractor to do the work if you are going to go the FHA 203k route. Can you do the work for a lot cheaper yourself? Yes. But you also don't have to pay for the work yourself, by financing it through a 203k loan. The fact that you can get a construction loan at permanent loan rates makes it worthwhile.

I'm 2 weeks away from closing on our first house hack. Our estimate came in higher than we could justify for the property so we trimmed down the scope of work and are going to handle some of the lighter tasks ourselves. I highly recommend you read J. Scott's book on estimating rehab costs. It will give you a good broad overview of how much work goes into a full rehab. Roofing, electrical, rough plumbing, mechanical, sheet rock, floor finishing are all things you are probably better off hiring out.

@Tim Steward the easiest way to find out what you qualify for is to talk to a lender. I'm in the process of closing on a 203k loan for a 3 family in Bloomfield and have been pretty happy so far with my lender. Happy to put you two in touch if you're interested.

Nice to see Bloomfield getting it's due. Port Chester is a pretty nice with The Cap and some good restaurants. It's a shame that Bowery doesn't own The Wellmont anymore. They used to get some pretty decent acts in Montclair.

Hi @Julian Perez yes you can. You just touched on the concept of forced appreciation, or sweat equity. If the repairs you make to a home add more value than they cost, then yes, that extra value will get counted towards the equity on a refinance. I wrote a blog post that dives deep into the numbers behind the strategy if you're interested:

https://www.biggerpockets.com/blogs/10165/68698-brrrr-math

Hi @Colin Riley,

Welcome to BP! Yes North Arlington and Garfield both have the right blend of MF housing stock with decent pricing and low enough taxes to make small MF properties work. Both have some benefits and drawbacks. 

Commuting from North Arlington can be a little bit of a pain. Unless you leave very early in the morning, the bus commute can be very spotty. From Rutherford it can vary anywhere from 20 minutes (prior to 6:30AM) to 2 hours (after 7:30AM) depending on traffic and if a bus breaks down. It may only be certain areas but North Arlington bus service is DeCamp, instead of NJ Transit, which is not as frequent or reliable. With that being said, North Arlington is a great town. There are a lot of good restaurants, especially a few very good Indian places. 

In Garfield you should be careful of where you buy. There was a major chemical spill in the 80s that wasn't properly contained so there is a large section near the Garfield train station where high levels of chromium have been found in basements of homes. It's designated as an EPA Superfund site but given the current administration's EPA head, don't expect anything to happen there in the next 3 years. Here's an article with a map of contamination area:

http://www.nj.com/bergen/index.ssf/2012/09/epa_to_...

At the very least, make sure you have properties tested for chromium in during the inspection phase. One other thing worth noting is that the train stops at the Plauderville station much more frequently than the downtown Garfield/Passaic Ave stop. In general the Plauderville side of town is much more residential and has a more neighborly feel to it. There are a few people on BP that have successfully house hacked in Garfield, one was a podcast guest. The values and taxes make it a very attractive place to invest.

Outside of Southern Bergen County, there's also Clifton, Bloomfield, and Belleville for towns you may be interested in. Taxes are higher in Essex county so from a numbers standpoint they are a little tougher to make properties cash flow. Good luck with your hunt and feel free to reach out with any questions!

Thanks @Darren Sager we are sending over a rider that says we need an NFA letter to close. Hopefully there is no leak and it's just an additional few weeks to close. We are also putting in an 8 week escape clause because this is a house hack and we can't sit around for 2 years waiting for environmental clean ups.

If you are house hacking can you prorate the property tax and mortgage interest for the units you rent out as business expenses that aren't subject to the $10k SALT cap and the $750k mortgage interest deduction cap?

Well good news, the seller just let us know that they are going to remediate the tank! Thanks to everyone for all the sage advice. 

Similar situation to us Jordan. It's currently owned by an REO company and they were less than accommodating during the attorney review process. Fingers crossed

Thanks for all the advice everyone! Hopefully the seller will deal with remediation.