All Forum Posts by: Christopher Canzoneri

Here in the area north of NYC the market is on FIRE from everyone getting out of the city.

Hello Everyone!

I purchased a home last year with a 5% down Convention Freddie Mac Home Possible Loan. This property as viewed by the town legally is a 5 family home. Although, I was able to secure an owner occupied loan on the home due to how 2 of the units are oriented. The units have a common door where there is a small foyer area. There is one unit at ground level and then another door up a flight of stairs. The units have separate electric meters, unit numbers at the post office and generally function and appear as two separate units. The town the home is located in shows the property has a certificate of occupancy for 5 units. The bank and appraiser accepted this situation as well.

I have been significantly increasing the condition and income of the home. Before I moved in the home, the gross rent was $4,300 and when I finish replacing inherited tenants and remodeling, conservatively I will be realizing at least $7,100 a month in gross income. This is all while reducing the expenses through cost saving avenues. Avenues such as replacing the single 1982 oil burner with a higher efficiency boiler or possibly 5 separate mini splits. Doing all this will mean my property is worth significantly more than what I paid for it. Using a commercial NOI valuation instead of using comparable sales will allow for a significant value add, possibly double what I paid for the property depending on how the value NOI and Cap Rate.

Will there be any issues when I want to refinancing this property as a 5 family commercial? Any issues with a sale down the road? My hope is to do a cash out mortgage and use that cash to buy another multifamily property, hopefully something 5+ units. Am I missing any important details here? I appreciate any help!

Hello everyone! I posted this question On Scott Trench Instagram page and he suggested I post it here. 

I currently hold a Freddie Mac conventional Home possible loan on a 4 family home. I mistakenly took advantage of this forbearance. What can I do to mitigate this mistake? I have already brought my mortgage back to current and spoke to my servicer. They stated they are unable to undo the fact that I was considered current but in Forbearance for the month of April. Although they stated that a manager will review our initial phone conversation since I was told there would be absolutely no effect to my credit and nothing will be reported differently.  Just wanted to see if anyone anyone has suggestions on how to reduced the damage and if anyone else is going through the same issue.

Hello!

Analyzing a deal here and could use some assistance. Please let me know if you require any additional information. Property located in Orange County, NY

My intention is to owner occupy one of the units for a lower down payment requirement.  This will be my first property and I intend to manage it myself and also have my father who lives somewhat nearby help

Unsure of the exact condition of the property but may see the property this weekend, appears in at least decent shape from pictures

Asking price $155,000

2,220 sq/ft

Location is a C area

4 units (all are one bedrooms except #4 is a studio) all have 12 month leases:

1 - $725. Going to 750 in January

2 - $750.

3 - $750.

4 - $625 studio

one bathroom in each unit

Expenses per year

Tax: 7,702/year 642/month

Insurance 1,825/year 152/month

Water/sewer: 2,300/year 191/month

heat/oil: 1,800/year 150/month

electric: 720/year 60/month

Garbage: 763/year 60/month

Total: 15,110/year 1,255/month

Rental income fully rented 34,200/year 2,850/month

Net Income 19,090/year 1,595/month

Cap rate at 155k is 12.34%

These are the exact numbers provided by owner

5 gas meters:

• 4 heaters – all tenants pay their own heat. Separate gas meters.
• 2 hot water tanks that the owner pays the gas for.

5 electric meters – all tenants pay their own electric. Owner pays electric for the common areas and hot water.

Thanks for your help!

@Mike Warder It's great to hear your perspective on what you did. I agree with paying the private loans back as quickly as possible. It's a great program if an individual plans to stick with it the entire 10 years. Was it more challenging qualifying with the loans and its effects on your DTI? Is there a certain loan program or strategy that you found best to utilize for yourself with high debt under PSLF?

@Daniel Kincaid The remaining balance is forgiven as a nontaxable event

@Frank Jiang Yes I have done a significant amount of research on the program to feel confident I am meeting all the requirements of the program. That's a great tip though, many people had the wrong loans (FFEL) and wrong payment programs. Also I have and understand all the details of my debt, I was just unsure of how much information was too much for a post on here. My private loan total is 46k at 5.3% interest for 25 years. The monthly payments are about $320 a month. I will be paying more than the minimum and will be paying much much more a month if I decide to pay it off instead of continuing my savings for a downpayment. My federal debt in the PSLF program is 83k at and average of 5.7% interest. My payments next year will be based upon my income so I am unsure what that payment will be. most likely around $250 a month. Is there more details you would like? Also, I have no other debt. I even sold my car to save more money (use mass transit to work which is free for me) Other than that I am really just trying to educate myself when it comes to home buying, and all different aspects of personal finance. I spend less than $1,000 a month on living expenses (rent included) only a few miles from Manhattan island Thank you and I really appreciate eveyones help

@Sam Shueh Waiting another year to establish 2 years of work history is a good idea. I would also have a higher income then also. Money from parents is not an option because well they don’t have any. I will most likely have even more saved by then also

@Thomas S. So do you recommend not taking advantage of this program and instead put the money I have saving for a potential down payment towards my loans? I am just concerned that for me to pay off all my loans it will take me many many years. I will be losing valuable time that I could have potentially used to start accumulating properties. Also I would be missing out on programs such as using a heloc to pay off student loans.

@Bob Langworthy Wow thank you that is great advice. That may involve me leaving the federal government to go after a position of higher income which is a scary leap. I get yearly raises and in a year I’ll be making at the very least 5,900 a month and a year after that $7,100 a month before any overtime. But again, that you for breaking that down for me, it makes a lot of sense