All Forum Posts by: Jahan Habib

Thank you Matt. I think an in person trip sounds like a good idea at this point.

I have also searched BP for other threads on Anderson and it looks like opinions are negative to neutral.

I appreciate your insights.

I am evaluating this town to see the investment potential. I know it's a struggling town, however I'd like to understand the tenant mix/longer term viability. I am not looking appreciation but rather cash flow. Definitely interested in B/C+ properties.

I would greatly appreciate any and all insights you might have.

@Chris Eley Great job on the flip. I don't have any question/comments, just wanted that thank you for being so open with the financials.

Much success for the future!

Please add me to your list. Email: [email protected]

I'm happy to see the thread come back to life. Perhaps the stock market gyrations have caused many to consider the potential for a downturn. For the record, I do believe that equities prices were headed towards the stratosphere, however would still the see the economic fundamentals to be sound (for now).

My goal for this thread was to seek and swap some actionable strategies, so I am sharing a case study of a current transaction:

Case: Single Family House in Coastal Fairfield County, CT

I am currently in the process of purchasing a single family in Fairfield County, CT. This one is going to be my personal residence. The numbers look like the following:

Acquisition Cost $225K

Renovation Estimate: $35K ($20K funded by the bank/reno loan - $15K out of pocket)

Downpayment; $25K (10% of $245K) 

ARV: $350K (Conservative)

LTV: $63%

This single family is located in one of Fairfield County's Gold Coast Towns (location to be disclosed post closing), commutable to NYC, with a strong rental base (A class). 

Even though this property is going to be my residence, with the mortgage (PITI) being about the same as my rental, I have the following available options:

Equity Cushion

By coming in at 63% ARV, I can rest easy in knowing that any future price declines will need to be incredibly significant before I end up underwater. For folks who have paid a premium in purchasing their personal residence or investments, at higher leverage, will be the ones sweating it.

Similarly, if I find myself in economic distress, I can still sell the property and walk away with a small profit. Although that would be an extreme scenario.

Rental Option

Although I am planning on staying in the area for a good number of years, well beyond any residence requirements for the mortgage. I also feel great in knowing that this property will easily rent for $2.2K-$2.5k/month, with my PITI being $1.7k/month, I am looking at $300-$600/month in free cash flow (after deducting for CapEx and Vacancy). Furthermore, the tenant base (Executive, Managerial) will be optimal for the property.

Added Security

As an added assurance for myself, I am also setting aside 6 months of PITI in a money market account for this house. Since it will be my home, I don't want to be caught off guard during a negative economic event/adverse personal circumstance. Overkill? Perhaps. However nothing beats sleeping well at night knowing that there is available cash in the bank.

My goal is to purchase a personal residence like an investor. What are you thoughts? Any critiques welcome.

Furthermore, if you have interesting cases of your own, please feel free to share!

@Edward Schenkel Huge fan of brick houses. The exterior maintenance is costs over time are usually lower, are perceived as more valuable, and they look "solid." I wish there were more brick houses in New England. If I have a choice between a brick and non-brick property -- I would choose brick every time.

@Filipe Pereira Do you have any thoughts regarding the repointing costs for brick houses in CT? None of my houses need repointing at this time, however I am curious about costs.

I am definitely not stopping the investing. Just trying to see what the best positioning might be under times if economic stress.

Yes, I agree regarding positive cash flow. I have never brought based on speculation and don't plan on doing so in the future either.

@Account Closed Very nice! Much success for the future!

@Account Closed Great story. Do you still own the properties in CA? 

Nothing is guaranteed for the future, however I am also looking to save in 2018. Having extra cash on hand never hurts.