All Forum Posts by: Christian Valencia

Hi BP Community! I wanted to get you opinion on potentially purchasing a triplex with a nonconforming unit. We’re in the process of purchasing an off-market deal. Our realtor, seller’s realtor, and seller claim the property is a legal three-family property. Taxes, deed, and field card show it’s a three family property. The main structure is a duplex (1BR/1 BATH in each unit) and there is a detached cottage (1BR/1 BATH) in the back of the property.

We really like the property because we can live separate from our tenants, location is great, and cash flow as well. However, there’s a couple of red flags – only two meters (we would share utilities with one of the units), ceilings are very low, some rooms have no windows, and cottage doesn’t look to abide by current set-backs (it’s right on the rear neighbor’s property line). I’m starting to think the cottage is illegal/nonconforming.

Seller says they have no permits, but seller is still firm on this being a legal 3 family home. Contract that we have in place is that we are purchasing a legal three family home.

I reached out to city zoning and I’m waiting for Certificate of Zoning Compliance. However, because of Corona Virus, we’re looking at 60 days for a response. Seller is not willing to wait that long.

This is our first multi-family deal and almost every listing we come across there’s the “buyer’s do your own due diligence”, which frankly I think is crap because I interpret this as the seller can say they’re selling a triplex that may only be allowed to operate as a duplex. How is this even legal? Can I just do the same thing that seller is doing to us and say that we're selling a 3 family that may actually not be?

What are your thoughts / advice? Please help!

- Christian 

My wife and I are in the middle of purchasing our first "triplex". Including the air quotes because zoning hasn't given their final blessing that it's legally conforming. The property was constructed in 1880. It has 2 units in one structure and a cottage in the back. Unfortunately due to COVID, zoning can't provide an update until 40 - 60 business days, and our our closing date is 30 days from now. 

The Deed, Field Card, and Taxes show the property listed as a 3 family. Our attorney is saying that the Certificate of Zoning Compliance has the final word. 

Any advice on how to expedite the process? Will the appraiser pull permits to check if the cottage counts as a legal detached unit?

Greetings fellow investors!

My wife and I are in the process of purchasing a 3 family home with an FHA loan. Our lender got us a 30 year fixed rate at 2.75% (crazy, I know!!). We originally wanted to take advantage of the low money down with an FHA (3.5% down) but after learning that the PMI (.85% or about $4,000/yr.) stays with the life of the loan, we're now tempted to put 25% down. Property is $470K. $117K would be 25% down.

We only have $85K at closing, we’d need to borrow about $50K (shout out to any hard money lenders willing to lend) to have enough for $117K (plus reserves). Our goal is to purchase another property in the near future. The trade off with dumping most of our savings (and then sum) would obviously be the opportunity cost, but it makes us happy to see that we’re not paying an extra $4k/yr. in supplemental interest fees.

What are your thoughts fellow investors?

Looking forward to hearing from you!

Greetings fellow investors, 

Can anyone recommend a home inspector that is experienced in older multi-family homes ( home we purchased is a 3 family from 1880). We're looking to close in 30 days and need an inspection done ASAP. I reached out to Pillar to Post and they're quoting me $1,400 - $1,800 for their packages (seemed a bit steep to me). Any recommendation would be much appreciated!

- Christian

Greetings BP Community,

New member here! Just casting the net to see if there's any active members in the Stamford, CT area. Looking to network, learn, and invest in properties within lower Fairfield County!

Happy to connect!

- Christian  

Wow! I'm happy to see several responses already! Thank you all for the tips and feedback! 

@Craig Sloan thanks! Ah - yes! Robert K. has changed our lives! Such a great reminder and the returns are certainly higher with the larger portfolio vs. the smaller one. Any insight on how a larger portfolio can impact the process of getting a loan approved? I'm thinking that the more debt I take on, the lesser the bank can lend (?) We're also open to hard money lenders when needed.

@Filipe Pereira thanks! and great to know that there's a BP network in CT! We should definitely connect! Your intuition is right - we live in Stamford where prices (and taxes) are high and cash flow isn't the greatest :) We're looking within this area and neighboring cities. Do you happen to invest in lower Fairfield County? Any insight would be much appreciated! We wouldn't be managing the properties and we're factoring in all operating expenses into our cash flow analysis (including property management). As far as paying off the loan - 100% agree! It DOES sound liberating! I'm sure that many can argue this approach isn't the most effective, but to me it just sounds simpler. 

I welcome any and all methods from investors out there! Hope to learn more as the thread (hopefully) continues.

Cheers!

- Christian 

My wife and I are in our early 30's and currently have a 1-bedroom condo in CT renting for $1,750/month with expenses (including mortgage, tax, insurance, etc.) at $1,200.  We both work 9-5 jobs in the marketing/events industry and are currently renting a studio for $1100 while saving up and living frugally. We want to build a portfolio that cash flows $5,000/month so that we can retire early to live in Madrid, Spain in less than 10 years, debt-free.  We've considered acquiring 5 units that would yield a cash flow of $1,000/each after paying them off.  Paying off the loans would enable us to have peace of mind and not worry about paying off large debts. Do paying off these loans make sense or should we build a portfolio focusing on increasing cash flow and acquiring more properties while holding onto the debt while abroad (i.e. 20 units at $250 cash flow each)?