All Forum Posts by: Amil Muminovic

First off congratulations for stepping into the REI world and having a good start with your W2 job/income. Secondly, I would suggest looking at FHA for the 3.5% down to save a ton of money on the down payment. FHA does carry MIP/mortgage insurance but the loan can be refinance in as little as 6 months if the equity is there to convert over to a conventional loan. FHA dropped the MIP down to .55% but when you refinance into a Conventional loan with good credit you can drop that to .25 or zero.

I would also suggest getting an ELA - Express Loan Approval which means the Bank underwrites your application up front. Then the bank gives you and your buyers agent a "Loan Commitment" that allows your agent to put in an offer with a Guarantee to close and the best part in (15) days of less. Sellers want transparency and assurance that the buyers can and will close and especially on time. You will have a greater chance of getting your offer accepted in this crazy market with a fully underwritten loan and a loan commitment letter in hand.

Most agents are getting a typical purchase contract to close in 25-30 days. This puts you ahead of the curve with a guarantee letter and a (15) day or less close. That is a stronger offer and it helps when you are up against a dozen offers. Another piece of advice is if you feel the multifamily is worth it do not lowball the offer. Come in closer or at ask price and ask for a little seller contribution where the seller covers some or part of the closing costs. It's better to finance a higher loan amount then come out of pocket cash for closing.

You can finance $10K over 30 years and it only increases the payment by $63 month versus coming out of pocket $10,000.00 - Thats when coming in closer to ask price might offer you some flexibility with asking for seller contribution of 1-3% or a dollar amount. Offering more for a multifamily is wise because its an income generating property and more doors means more cash flow. Income generating properties also appraise higher as well due to the rent schedule and lack of inventory.

Jason,

I appreciate the in depth advice. I definitely see how an ELA and letter can get my foot in the door, letting the sellers know I am serious. And yes, I have been hearing a lot of recommendations to go with the FHA since the Conventional interest rates are about 7.5%.

This is the first time I am hearing about requesting a seller contribution. Is there any benefit for the seller to do this, or would it only be in my favor? I have only heard of sellers paying upfront for repair credits that were agreed on, post inspection.

Amil

0 Votes

Newark, New Jersey

Hello, my name is Amil. This is my second post in the "Starting Out" Forum so I will keep it short and sweet. I am 25 years old and from New Jersey. I have a W2 job as a Project Engineer and I have a background in Construction.

As some of you may know, New Jersey has become one of the most expensive housing markets in the US. I have been trying to get into Real Estate Investing for almost a year now. A lot of people I've been speaking to about it have been recommending me the House-Hacking method. While I think this would be an ideal situation (move out of my parents' roof, get equity, and maybe even get some cash flow, sounds like a no brainer), it seems a little out of reach since the market is so competitive right now! It seems like multi-family units are on everyone's radar since there is a lot of opportunity with them due high rent prices.

I am looking for advice on starting my Real Estate Investment journey in a competitive market. Any recommendations on my path forward? Is it worth pursuing a House-Hack in a single-family unit? What is the best way to get my foot in the door on a decently priced multi-family unit?

Thank you for taking the time to read this and I look forward to connecting with you.

0 Votes

Newark, New Jersey

Quote from @Brandon Wagner:

I always recommend to purchase your own primary residence before you get an investment property. Perks include

1) Lower down payments needed (3%-5%)

2) Better interest rates (roughly 1% less on primary vs investment property)

3) Get to learn how to be a landlord and gain that experience in your own house, vs across state lines.

Generally in expensive markets, it's okay to not be cash flow positive, as long as you are saving money. For example if your rent you pay is $2,000 now. You just want to get below that in your house hack. So if you have a $5,000 mortgage, you rent out 3 rooms for $1200 each to save you $3600 on your mortgage. So your real payment is $1400 per month. That doesn't make you money each month, but it saves you $600 each month.

On top of that you get the extra benefits of appreciation, rent increases, tax benefits, loan paydown, etc.

____________________

LICENSED REALTOR Virginia® (#0225264736)

Brandon,

I appreciate the recommendation. It seems that most people I have been talking to about Real Estate Investing have been steering me towards the House-Hack Method. I do agree that it seems like the most ideal situation for me especially because I am looking to move out towards the end of the year, so why spend that money on a rental when I can be getting equity.

It has been quite difficult trying to find a property in-state, but I guess I just need to analyze harder and be patient. I'm sure it will pay off real soon. For now, I will just continue looking for properties and connecting with people in the community.

Amil

0 Votes

Jersey City, New Jersey

Hello, my name is Amil. I am 25 years old and from New Jersey. I currently work an 8-5 as a Civil Engineer in the Construction Industry. I've been working for as long as I can remember from hard labor, restaurants, and retail to engineering based work and a home painting side hustle. I paid off all of my student debt before most of my colleagues even found a job out of school, and I do not have much expenses since I am living under my parents' roof.

And old saying goes "work smarter, not harder". Although I will continue to work harder, I do want to work a little smarter. And by smarter, I am thinking passive income, Real Estate being a gateway. I have been listening to BP podcasts and doing research for well over a year now, but it was not until earlier in 2023 where I actually began pursuing properties.

It's been quite difficult for me to get started in my home state (New Jersey) because everything is so expensive, listings and property taxes. After a lot of spent time trying to pursue homes that would always go into bid wars and get sold for 10-20% over asking, I have decided to begin pursuing properties out of state. I have been looking for properties in the Poconos, PA. I chose this area because I am quite familiar with it since I spend a lot of time there in the winter to snowboard. I am looking to pursue a property in the Poconos and turn it into a STR to infiltrate the Airbnb market.

Does anyone have any advice for pursuing properties out of state? First short term rental? How to pursue a property in New Jersey in 2023 with this influx of multi-property owners? Or any advice for getting in the Poconos market?

Thank you for taking the time to read this and I look forward to connecting with you.

0 Votes

Jersey City, New Jersey

Hjalmar,

I am from New Jersey and looking to buy a property in Monroe County to use as a STR as well! After a plethora of research, I learned that there are many nuisances involved with getting into rental properties in that area.

My 3 biggest pointers are: many communities and townships do not allow STR (rentals less than 28-days), there must be a representative listed on the permit that is located within 15 miles of the property, and all the extra fees that are tied in with operating a STR in a community (vary from association to association).

I hope this helps.

1 Vote

Allentown, Pennsylvania

@Mike S

I would like to check in to see how things are going with you with the STR Market in the Poconos.

I myself am a STR consumer of the Poconos, as I am there all the time during the winter. I live in New Jersey, about an hour and a half away. I currently work a fulltime job and I am trying to get into Real Estate.

I am looking to close my first deal in the Long Pond/Tobyhanna area. The thought of managing a property while living 90 miles away can be quite intimidating, especially the fact that I haven't heard many great things (or many things at all) about the services in the area!

Being new the Poconos Market and Real Estate overall, do you have any general recommendations for me?

Also, where do you think I could find some reliable Management Companies, Cleaning Services, and Contractors in the area?

0 Votes

All Forum Posts by: Amil Muminovic

Amil Muminovic has started 2 posts and replied 6 times.

Post: New Investor Looking for Advice in a Competitive Market

Post: New Investor Looking for Advice in a Competitive Market

Post: New to Real Estate and looking to get started out of state

Post: New to Real Estate and looking to get started out of state

Post: STR in Monroe County PA

Post: Property Management Poconos