All Forum Posts by: Brian Ploszay

The interest rate spike hasn't been a full year.  Recalculate that for half a year.  

This happened to me many times.  This price is very high.  You need to get more quotes.

@Joe Funari   California has had barriers to adding new supply for the last 30 years.  It is the hardest state to build new housing.  Owners of assets did very well, despite problems in the state.   

My thoughts:  Folks with low interest 30 year fixed rate loans will have an asset.  Many will stay in their houses longer because those rates are irreplaceable.  Commercial real estate have shorter term loans and some assets that cannot easily raise rents and occupancy are in trouble when they have to refinance at higher rates:  Office buildings.  The big crash of 2008 coincided with the freezing of the mortgage credit markets.  Watch loan delinquencies, but it is predicted to be less severe this time.  In recessions, there generally are some buying opportunities.  I will not be buying anything for awhile, but I am prepared.  

Two unit buildings rarely cover their mortgages.  Still, you should consider buying this if you plan on a long term hold.  The price you paid for the building will remain fixed.  Over the next 5 years, I suspect you can raise the rents somewhat.  In time, the financial position of the building will improve.  So many landlords started out like this:  Buy a small building, live in a unit, and eventually grow.

I probably would not do the rehab if you plan to keep the tenant.  If they want some upgrades from wear-and-tear, then they will have to live through the rehab process.  If they pay, and they are currently happy, leave them alone. 

Off the subject a bit, my advice is for your second purchase also to be in the Austin area.

I visited there a few years ago and was impressed.  

You are going to set yourself up to lose if you take C quality tenants.  I had a property that I couldn't find better tenants, so I ended up disposing it.  Maybe look to section 8 and V.A. vouchers?  

Jersey City is fairly large, so get to know the areas well.  You can also look into some of the surrounding Jersey areas.  Proximity to Manhattan is key, which why Journal Square real estate is a bit more expensive.  In the long run, you'll do fine in this area.