All Forum Posts by: Burke K.

I have a specific situation so I wanted to reach out seeking an advice for fellow members here who might guide me to the right path. I am a finance guy but unfortunately my education is not adapted to the US real estate market and I am little bid confused.

Goal:

Buy a 2-3 family house to do a small rehab and rent afterward. Location: Bergen County, NJ.

My situation is as following:

Moved from Europe to the States 2 years ago. In Europe we have a family business doing land development. I am not aware of the zoning, don't have enough contacts here so I figured Its better for me to focus and start with renting ideally to get my hand on RE.

Regarding my finances: Last 2 years had some small private biz (1099). Made around 35-40k year (profit).

In February I started a W2 job in property management. Making around 70k a year + realized gains from a stock market portfolio around 18k YTD. I have enough savings to pay the down payment (family supporting me in this venture). I also have 0 debt and good credit score.

My question is if there is a fast track where I would not have to be working 2 years on a w2 in order to be able to get a loan and buy a house? I know there are hard money, and private money lenders, but since it's my first purchase I don't think any of that will work for me. I also know there are side hustles, wholesaling etc, but I am not looking for ideas that will delay the purchase process time wise.

Can anyone share some knowledge or experience tailored to my scenario, if there is a way to purchase a house asap in this case?

To break down the math:

Purchase price expected: 500-600k

Down payment: I am a first time home buyer, but I can go with 15%.

Looking to finance the rest.

0 Votes

Quote from @Joe Bourguignon:

Hey, all! I'm trying to get myself set up with some analysis tools for MF investments, and I really like the "Value Play" model that Berges has in his "Complete Guide to Buying and Selling Apartments". I understand where he is getting most of his numbers from, except for the bottom area of his model, starting with "Net CFs from Investment - 1 Yr exit" (and everything below). If somebody could help me understand how he's calculating these numbers, I'd love it! Spreadsheets don't paste well here, but here is what I'm looking for:

Net CFs From Investment 1yr exit
Net CFs From Investment 3yr exit
Net CFs From Investment 5yr exit
Exit Price	Gain on Sale	Cap Rate	IRR
Estimated Exit Price/Gain on Sale - 1 Yr	Annualized IRR - 1 Yr
Estimated Exit Price/Gain on Sale - 3 Yr	Annualized IRR - 3 Yr
Estimated Exit Price/Gain on Sale - 5 Yr	Annualized IRR - 5 Yr

Thanks!

-joe

Net CF from investment 1yr= Owners equity+Gain on sale in y1+ Total return from operations for that year.

For years 3 and 5 add the principle reduction from the previous years and voila.

Exit price(his estimated sale number)- total purchase price= gain. Very easy profit formula.

Cap rate NOI for that year/ sale price= %

0 Votes

One hypothetical question:
If the property DSCR ratio for ex is 0.95 (which means the prop does not qualify), can I add a down payment to satisfy the ratio? The dp would reduce the loan amount and by that also the PITI payment, so it would come up to 1.1 ratio just theoretically speaking.

Is it possible? :)

0 Votes

All Forum Posts by: Burke K.

Burke K. has started 1 posts and replied 3 times.

Post: Fast track to financing and home purchase? Individual scenario.

Post: MF Analysis questions using Steve Berges' analysis tool

Post: What exactly is a DSR loan?