All Forum Posts by: Alex V.

Hi BP,

My partner and I just came across a great off market deal and one of our decision drivers is going to be how long we have to take a private loan out for. We are going to have to buy all cash, and are going to use a private loan in order to fund the purchase. The property is in great shape so we aren't going to be putting much, if any, work into it. If we want to put a mortgage on the property, would we need a seasoning period even if the property isn't going to be rehabbed and stabilized? One wrinkle is that the current tenant is month to month and is paying below market rent by roughly $200-300 a month.

The Property;

• SFR in Lee's Summit, MO
• Original house burned down and was fully rebuilt in 2007
• Current tenant is month to month and rent is well below market

The Structure

• 50/50 split with a partner
• Will likely need a commercial loan as we are going to be borrowing with an an entity

The Plan

• Purchase property with a private loan all cash @ 10%
• Get current tenant out, maybe do some minor cosmetic fixes, paint, landscaping, cleaning, etc
• Re-rent at market rate
• Refi out the private loan

Assuming a perfect environment where we get the tenant out on day 1, and get the property cleaned up and rented in 1 month, would there be a year seasoning period? I'm guessing this probably varies greatly depending on the lender, but I am curious if the concept of a property being stabilized for a year is more for major repositioning or if it applies to any deal purchased in this manner.

@Christopher E Renna there are a lot of towns in Northern NJ where MF properties make sense. The more units the better, as the property taxes don't scale 1 to 1 to # of units, i.e. the property tax per door is typically lower with 3 & 4 units. In the NYC area the cash flow isn't great compared with other areas but the appreciation and rent increases over time can make the deals very attractive over the long run.

Flipping houses is an entirely different beast. It's a job more than an investment strategy. It's all about deal flow as opposed to building a balance sheet.

Since you're in the initial research phase I highly recommend reading Set for Life and The Book on Rental Property Investing. Also check out the older podcast episodes with @Darren Sager (E:048) and @Sunny Burns (E:210) for insight from Northern NJ investors.

From Rutherford express buses to PABT are 19 minutes no traffic. If I take a bus anytime after 7AM it starts to add about 10 minutes per half an hour. So 7AM is about 30 minutes, 7:30 is 40, 8 can be up to an hour. The bus lane does little during the rush as there are so many other buses stacked up in the line. The problem isn't really the tunnel traffic as it is PABT being way over capacity. I don't normally leave the office until about 7PM so commute home is a breeze on the bus. Not sure what it's like getting out of PABT during 5-6.

Welcome to BP @Andrew T.

@Joseph Scorese and @Fasil Khan hit the nail on the head with what to look for and how to evaluate rental targets in NJ. My wife and I are currently looking for our first house hack opportunity as well. We were in the same situation as you, renting in NYC but moved to Rutherford to save money on rent (and get some breathing room finally). 

As someone who is originally from NJ, I'd second most of what Joseph said. NJ Transit service can be spotty, not all lines are created equal. The Bergen/Main and Morris lines are great, the PV line and Montclair/Boonton lines, not so much, although they are improving. You can get a very quick and easy idea by just looking at the PDF schedules of all the lines on NJ Transit's website.

http://www.njtransit.com/sf/sf_servlet.srv?hdnPage...

Also some of the towns close to the Lincoln Tunnel have great express bus service. So be sure to check out the bus routes as well. If you head in early then they are faster than the trains, but after 7AM the times start shooting up quickly. 

@Kevin Rodriguez Welcome to BP! I'm just getting started too. If you are looking for something more suburban NJ then Clifton specifically Delawanna and Bloomfield in Essex county. Garfield, Lyndhurst, Wallington, and Elmwood Park in Bergen County all have 2-4 families. Property taxes are pretty high here so SFR doesn't work unless you pull off a great BRRRR. The numbers on 3-4 families make much more sense. Deals are hard to find as the markets are very competitive but it's totally possible. On the more urban side of things, Newark and Harrison have pockets of opportunity, Jersey City Heights are blowing up right now too.

Hi Shiela, Most DAP or DPA programs are reserved for low income and first time home buyers. I work in the institutional side of this (Structuring the bonds that finance these mortgage programs) and would be happy to discuss more if you're curious. Feel free to DM me to talk further.

Was a great event. As someone who is also just getting started @Victor Steffen I am consistently amazed by this community and BP as a whole.

Congratulations Jasmine!

Also if you ever see a bandit sign on the side of the road, pull over, take a picture, and then call the number when you get home. This has worked for me in getting in touch with wholesalers. Now if you find a way to get in touch with reputable wholesalers, please let me know.

@Sunny Burns I had just listened to your episode the day before you posted this and was going to reach out to you! Thanks for the post. You and Sunmarie's story was inspiring.