All Forum Posts by: Antoine Justiz

Thanks for your responses. I am happy to hear that the 70% rule is more of a guideline than a rule. I have read that it is difficult to obtain bank financing if it's your first flip. Is this true? I have a private money lender to cover the down payment and the rehab costs but using a hard money lender for the rest could get too expensive. I am thinking if the LTV is less than 70% l, they would cover it. I have good credit and income, so I'm hoping this isn't a problem. Also, has anyone done a live in flip to mitigate some of the holding cost risks? Would you still finance as a investment property or as a primary occupant? Thanks again

Hello Everyone, I am a new investor jumping into a short sale deal and would like to ask for your opinion. Should I flip, BRRRR or walk away? Purchase price = 400k. It's a 3 bed 2.5 bath SFH, looking to make it a 4bed 3bath with new BR in attic and master bath addition. The place is in poor condition and will likely take $80k in repair. ARV looks to be between $560k and $600k. It's an upper middle class neighborhood in northern New Jersey. Several houses in immediate vicinity range from $600k to 1.2million. I am thinking flip is the only way to go as I'll have to leave money in on a BRRRR (490k = 400+80+closing) as bank will only give me 400k (75% of $600k) and I'll be cash flow negative after refinance with only $3500 in rental income. I am considering using a conventional interest only mortgage and a private money lender at 12% interest for the down payment and repair costs. The flip works under an 80% rule (600k*.80-80k=400k), but not the famed 70% rule, though I have read u can use %80 in pricier areas. Thanks in advance for your insights... Marc

Thanks Daniel for the discussion on the tax implications and appreciation vs negative cash flow...good stuff to consider. By "fully rented" I meant "not owner occupied". I do budget in vacancy, capex, prop mgmt, etc.

Andrew Martin Thanks for your comment. As long as I am "house hacking", I don't really see it as negative cash flow as I feel it's a better position than renting or buying a SFH to live in which could be considered a liability. However, I have heard others recommend always running the numbers as if it's fully tenant occupied.

Hello Everyone, I am thinking of "house hacking" a 2 or 3 family in the New York/Northern New Jersey area by living in one unit, but the numbers don't work in general for positive cash flow unless it's an area where we wouldn't necessarily want to live. The benefits of house hacking seem to outweigh paying high NYC rents at this point, but if we eventually move out, the investment will likely cash flow negatively. I'm thinking I could then refinance, but rates may be higher then. Is this a good investment anyway? Marc