All Forum Posts by: Anthony Caleca

so the house right behind my primary residence went on fire Sunday and it is completely wrecked. The insurance company already ordered for the house to be demolished due to it being un safe and someone potentially going in it. So right now the property is just dirt all the demolition is done and it's just a dirt property.

The home owner passed away in the fire which is an absolute tragedy, but I already spoke to the son who is inheriting it and they made it very clear he wants to sell it. He lives out of state and knows I live directly behind the property for years and said he will sell me the property.

Okay so now that you know the background of this short story, I have been trying to buy this property for years because it is 50X170 and that is considered a big lot in my county. So my question is what type of financing will I need since it isn't a typical home purchase, it's now just flat land so technically would be a new construction project from ground up. 

This is an opportunity that cannot be passed up, like I said I've been trying to buy this property for years and finally have the opportunity to do so. And the potential profit is phenomial. 

Any advice or help is greatly appreciated I need to close on this one. Is this something I would go through a bank to buy the property and then the construction cost as well?  Or more for a private lender or hard money lender? I would initially imagine hard money would be out because it's not a basic fix and flip short term loan, this is something that will require permits and plans to be drawn up and approved

Now I know this is a very broad question and there is so many variables to give a honest answer, such as far as how they financed the project, what they are building, the size of the property and a ton of things more to consider.

But for this post lets just use developers who build luxury spec homes. for instance we can use a big market like Los Angeles, how much do they developers really make who buy a single family house and develop a new luxury modern home and then put it on the market for Millions and millions.

Seems like there is a ton of risk involved with it, and also seems like they rely heavy on financing with both debt and equity component. So after every gets paid, do they really clear a few million each project like shown on TV?

feel free to use real life examples, I know everything on TV is glamorized, but I do know a few developers in LA and NY who buy develop and sell theses beautiful spec homes with in a 18-24 month time frame, and it seems like they are CASHING OUT big time.

Hey Ryan thank you for the response. Taxes are built into the mortgage price (I used a mortgage calculator which has taxes built in) insurance was not added, so that is something that would have to be in put.

As far as rent control ordinance units up to and including 4 units are not subject to the rent control ordinances but are subject to the rent reasonable policy. On average a 2 bedroom in that area is renting for $1,325/per month whish is $500 total more a month then what I have laid out on the excel sheet.

With that Being said, this seems like a pretty good investment, it produces cash flow and has a decent margin on monthly basis.

Curious if any BP have any experience with buying rental properties in the East Orange, NJ area. I know it is far from the best neighborhood but the property is relevantly cheap, and there is a lot of opportunity to scoop up 2-4 unit multifamily homes at a cheap price.

I say cheap because I live in New York City, and nothing is cheap real estate wise, so I am exploring parts of nearby jersey for more cost efficient options. my friend just bought a property in East Orange as well (its his 4th investment property) and he says he will be buying as many multifamily homes as he can out here over the next 3-5 years.

here is what monthly expenses/income looks like monthly and annually. If you have any experience with East Orange please comment

just an update submit offer on the house and it was accepted, now just going through whole mortgage process

Just an update on some more accurate numbers I put together including cost I was more on the aggressive side when estimating cost and more on conservative side when estimating sale price and price per sq ft.  currently in the process of applying for mortgage

Hey man I love your post and can relate a lot to it due to the passion we share about taking something that is ugly and ignored and brining it back to life with fresh design and some creativity.

Just some additional questions on the profit margins, seems like each deal you are averaging around 90-100k profit, what about cost of money from borrowing HML and commission fees to buy/sell property? does that lower the margin a lot?

awesome project absolutely love the flooring!!!! great job

Hey Brett would love to connect with you more about the process of actually putting a deal together like this. There are a few houses in my area 1 that I am currently working on that is going to be new construction deals.

Are you building luxury spec homes?

no unfortunately he has around 400k, which isn't enough for property plus construction. Given my credit score and having enough for DP and interest rate environment I will utilize conventional mortgage. Thank you