All Forum Posts by: Bill Schollmeyer

Can I ask you who recommended Sussex County as a place to invest? 

Sparta has had a strong school system which has reflected strong real estate prices traditionally. There are little to no multifamily properties. 

Newton has more multifamily houses but lower property values, worse schools, and the standard blight that comes with being a county seat in a rural county. 

Do you have specific investment goals? 

 Never heard of that program, good thought. However, looks like it wouldn't work for a 4-family:

"For borrowers with good credit, the HomeStyle® mortgage allows a downpayment of just five percent, which is just short of the FHA 203k's minimum downpayment requirement of 3.5 percent.

However, this applies to 1-unit homes only.

Homes with 2-units require a 15% downpayment in order to use HomeStyle®; and 3-4 unit homes require a downpayment of 25 percent. Downpayment minimums for second homes and investment properties are sightly higher."

@Shane Baganz

Good thoughts on private money, appreciate it. I originally wanted 100% of the deal but 50% of a good deal is better than nothing. I'll explore private equity options.

@Rich Becker

All advice helps, thanks! I've never worked with a portfolio lender and would have to assume that my one other property wouldn't be enough of a track record to warrant some crazy deal like 10% down. Possibly 20% down. I'll give a few a call and see if anything is feasible.

Hi All,

Forgive me for the fairly redundant question (I've read the other forums on this subject) but I want to get some opinions on how to purchase a specific 4-family property without putting down 25%, which would be $97,500 on a $390,000 purchase price. 

The most obvious answer is probably FHA loan and house hack - however, I'm currently doing that exact thing with a 3-family property I purchased last year. Alas, I likely couldn't get a second FHA loan without meeting the special exceptions requirements. I would normally just save up the money to do the 25% down payment, but this is a family friend selling who wants to sell within a few months, so I won't be able to save up $97,500 by then.

Here's the interesting part - the seller owns the house free and clear - BUT DOESN'T HAVE ANY INTEREST IN SELLER FINANCING. I even showed him how much more money he would make if he carried a 20-year note and I put down 10%. I explained how he was basically getting a guaranteed annuity backed up by the property. However, he wants to use the proceeds of the sale to buy additional properties closer to where he is retiring, so I can't fault him.

Any creative solutions on how to purchase this property? One crazy idea I had was to do seller financing and have a third party agree to purchase the note from the seller upon closing, essentially circumventing a traditional mortgage company. Haven't researched this though - probably illegal and tough to find someone to fork over $350,000+ for a note.

Thank you in advance to any suggestions you may have!!!

For what it's worth, I drove through the neighborhood and got stared down pretty hard by residents. I doubt a young male using common sense would really have any issues there, but I personally wouldn't feel comfortable living there just based on the looks I got. Then again, I was also cruising slowly down the street so I probably looked sketchy to them. In any event, go drive or walk the neighborhood and get a feel for yourself.

Also, Montclair is a very competitive market and you certainly aren't the first person to notice the lower prices in that area. IMHO, every single property you see on the MLS (or Zillow) in Montclair has already been analyzed and passed over by multiple investors like Darren Sager. Unless you're buying a complete rehab project, I'd bet that you'll be overpaying for someone else's flip, even in that neighborhood.

Did this deal end up working, @DJ Thompson?

I'll be attending, thank you Darren. 

Best, 

Bill Schollmeyer

@Dave Bingham Thank you- I'm an anti-money laundering consultant, so my clients are banks.

@James Wise Thanks James! I think so too. And after seeing San Francisco, I think I'll head elsewhere for my first property.

@Shawn Mcenteer Hey Shawn, you're plan sounds awesome, congrats on your success so far. I'll absolutely be in touch. After Feb 14th I plan to be in NJ for awhile. I'd love to talk about what towns you're looking at for multi-families.

Hello!

Newbie here with a goal to purchase my first real estate investment property in 2015. I would prefer to be a rehab and hold-type investor, specifically for multifamily's/commercial units, but this will obviously depend on the markets I'm in and other circumstances.

For my background, I'm from Sparta NJ and currently consider that my address; however, I'm a consultant and often spend months at a time in different cities (currently in SF). This makes my REI career challenging but interesting- I can easily take off 3 months at a time with no career consequences, which I see as a benefit if I want to rehab a property or try real estate investing full-time. Since I often work for clients in NYC, I have a dream of buying a multi-family close to the city, rehabbing it, and renting out the units while keeping one for myself.

Anyway, feel free to reach out to me with advice, questions, or just to chat! And definitely say hi if you're from beautiful Sussex County and like to golf Farmstead.

Thanks!

Bill