All Forum Posts by: Barbie Melendez

@Allana Alex I am just getting into the NACA process. I did the workshop three weeks ago. Do you have an update on how it went for you?

Hi @Manik Jain, I am just beginning the NACA process. I have my intake appointment in a few months. Did you end up using them for your purchase?

 

Great information that I will use when renting my first property. Thank you!

My journey to obtaining enough wealth to leave behind to future generations took a big turn last year. I worked from home for about eighteen months before going back to in-person. COVID opened my eyes to see what was actually important to me. I realized that my time and doing and spending it with myself and people who are important to me is more valuable than a paycheck can ever be.

My trajectory in life will be changing by becoming a real estate investor, beginning with purchasing my first home within the next twelve months. I have been saving $$, self-directing my IRA account, investing in stock options, completed the real estate salesperson course, and became a Pro member of Bigger Pockets. I also am in the beginning stages of the NACA application process.

I live in a rent stabilized apartment in NYC.  I had to get serious about how I wanted to live in five years and change how I was living and spending my time or money TODAY. Two months ago, I thought I wanted to move out of NYC and go to Newburgh NY or in that general area. Why? Because it is more affordable and easier than the Bronx (where I currently live).  Houses in Newburgh sell for around 300k while they sell in the Bronx for over 500k to 2m. 

The thing that I didn’t take into account was the affect moving a long distance away from my job would actually mean. If I am valuing my time more, do I really want to spend three hours daily or more traveling back and forth to work? Do I want to spend five times the amount in fuel than what I am spending now? Is the wear and tear preventative maintenance costs on my vehicle going to increase significantly? How many hours a day will I be spending in this new home (besides sleeping)? Are my ezpass (toll) bills going to increase? Where will I be eating my meals during the week? Will my daughter have these expenses too, since she lives with me?

I have been analyzing deals for the past month and a half, almost daily or at least once a weekly. My first home will be a small multifamily. I have never owned a property before. One thing that the calculator doesn’t account for is the fixed and variable expenses that come into the picture when buying and owner occupying a property that is much further away from where you live.

I realize that I do not want to live a long distance from my job. I don’t plan on quitting my job anytime soon because I love what I do for a living. I do not want to buy a home that I will not be able to enjoy every single day. I would be spending most of my day at work or traveling.  I do not want to spend$ 5x on fuel, 3x on tolls, or eat all my meals outside my home. I do not want to spend over three hours a day traveling to and from home and work. I do not want to add that financial burden on my college student daughter.

A great important consideration for those of us wishing to move out of expensive urban areas, like NYC, into less expensive suburban areas is - how much will this actually cost me? We cannot simply look at what our PITI (Principal Interest Taxes Insurance) expenses are. Just because our PITI looks low, we may be spending a lot more for things that we have to put in place in order to live in a less expensive housing market.

It took a few weeks or analyzing deals and lots of self-reflection. I had to get real with myself and not get caught up with home buying fever just because the talking heads are saying that home prices will just continue to go up. I will not miss out on my opportunity in the future. I have to be particular of where I buy because I am the one that will deal with the expenses that will come with my decision.

Has anyone else encountered this issue when deciding where to buy?

Great information!  Thank you for sharing your experiences with the appraisal process.  @Chris Mason super helpful

Hi Michael.  BP has a "Find a Contractor" link in the resources page.  I'm on my computer and I see it on the right side of the screen.  Letting you know, just in case you don't get any direct hits on your search.

I am a newbie who is seriously considering house-hacking or purchasing my first small multifamily property (Newburgh NY and Providence RI areas) or as a full rental for cash flow. Our CCC is -- Newburgh NY or Providence RI, 2-3 unit multifamily, in move-in ready conditions with just some cosmetic fixes needed, $250k or less, with at least 10% CoC return and $200 cash flow.

Following the guidance of Brandon Turner on "getting our reps in," my partner and I have been doing at least four analysis a day.  We are running into a question when calculating for house-hacking.  For example, we look at a 2 family home and plan on living in one of the units.  Only one unit would be generating rental income.  The second unit will be owner occupied.

Are we supposed to include the rent that the owner occupied apartment would be paying if we were not living in the unit?  My view is that since that apartment is not generating income and the rent, or out of pocket expenses, would be coming from our pockets ... then we shouldn't include that rent amount as possible income.  

When we don't include the owner occupied unit's potential rent amount, we get a negative cash flow.  When we include the amount of rent that the apartment would generate if we weren't living there, we get a positive cash flow.  I believe that including rent that isn't actually being paid by anyone is misleading in our calculations because it gives the impression that the property is cash flow positive while owner occupied and only one of the two units are paying rent.  The other expenses are the owner's responsibility and not being covered by anyone paying actual rent.

Should we be calculating rent from an owner occupied unit?

I am looking to purchase my first small multifamily in the Newburgh, NY, area.  I set a goal to analyze at least two properties a day.  This property is two units with a list price of $179,000.  The tax assessed value is $85,200 (2020).  I know the RE market has grown exponentially.  This property sold for $36,000 in 2002.

Is it normal for the tax assessed value to be significantly lower than the list price?

Will that affect me in anyway if I purchased it?

@Kais Rona This thread helped me out a whole lot.  I posted about this very issue today.  As a newbie, I think we can get in our own way sometimes but it doesn't sound like thats the case with your situation.  I also have a hefty amount of law school student loans but as long as you are in a IDR, or similar, then you should be okay since you will have a consistent amount that you have to pay each month for your student loans.  Don't even think about paying off your loans before investing in RE because that will take a lifetime.  Find the right area, do lots of analysis reports, and put a good team together for yourself if you are investing long distance.

I set a goal for myself to analyze at least two properties a day.  The more you analyze, the better you will be at knowing which area or properties are best for you.  Once you have those in place, get your pre-approval, plan a trip to where you want to buy, meet with your team, and jump in!

I have saved searches on Zillow for the purpose of receiving alerts and doing the analysis. The most recent one that I ran the report for was 1821 Route 300, Newburgh. I ended up with Monthly cash flow -$928 /mo. if house hacking so it would be considered the living for less option. The issue is that Newburgh is at least 66 miles away which would multiply the amount I spend on gas monthly and also tolls, not including the hours off of my life that I would spend traveling. Together, this would not be living for less. I know the VA loan requires us to live in the property as primary residence for at least one year. The wiser option would be get the property to strictly rent it out completely since I am searching for at least two to three family multifamily.

Im not sure if this will work but here is the link to the analysis I did - https://www.biggerpockets.com/...