All Forum Posts by: Christopher Cordero

Hi BiggerPockets folks,

My wife and I are new investors. We don't have an LLC set up quite yet (and we aren't sure if we're going to need it in the near future). We are closing on our first deal soon. It's going to be a long term hold/rental property and we are trying to figure out how to structure the bank account side of things.

I understand that we'll need a checking account and a credit card that is completely separate from my personal accounts and cards.  Which is all well-and-good, I can definitely get that set up.  However, what I need help to know is:  Does it need to be abusiness checking account?  And does it need to be a business credit card?  I have heard that a personal checking accounts and personal credit cards could work as long as I keep them earmark them separately from my other accounts and I am very careful to always use the new accounts for our business expenses, but I'm not sure if that's true.

Thanks in advance for any advice.

I am working towards my first rental property and found a property that I may be sending an offer on.  I currently own no properties, and I live and work out of NJ.  I'm looking to buy in FL.

I've talked to a handful (5+) mortgage lenders now and I'd say about half of them, including a real estate agent, suggested to me to consider calling this property a "Second Home" where in fact it is intended to be rented out.  They all explained this recommendation in the same way: that it's perfectly common for people to buy second homes in FL, especially people like me who are first-time homebuyers.  They sometimes even suggest that if I wanted to, I could just decide to live in it for a few months before moving back up to my apartment in NJ and then renting it out.

Is this a bad idea?  I think this is technically mortgage fraud, but the fact that so many people are suggesting it to me makes me think this is more commonplace than usual.  Furthermore, the difference in interest rate is pretty large - from what I've seen it's a full percentage point difference with investment property loans being greater.  Ideally, I could lock in the lower rate so that my cash flow looks better but I 100000% don't want to get in trouble or lose my property on a technicality or something.

Does anyone know how this works?  Is living in it for a few months and then later renting it out actually an option?

Hoping someone else could check my numbers and give me some insights on whether this is a good deal or not.

House is located in an class A neighborhood and requires no renovation work.  Schools (elementary, middle, high) are all really great.  The neighborhood is full of strong high income earners and I don't think I'm at risk of having any bad tenants with this property.  Crime is not an issue.

The weird thing about the property is that it's been on sale for quite a long time - well over 160 days on market.  The price seems reasonable (maybe even good) - I found some comparables located on the same street with same 5BD/4BA layout and similar SQ Ft that sold as recently as September 2020 for $550K.  Many houses in the area have pools and this one doesn't, so maybe that's what is causing folks to walk away?

For the estimated rental income, our real estate agent gave us a set of comparables and their rental rates, and in this area rent seems to hover around $1/sq ft.  This particular property is around 3300 sq ft but I put $3000 as rent to be conservative.

• Type: SFH
• 5 BD/4 BA
• 3300 SQ FT (4200 Sq Ft Lot)

• Purchase Price: $440,000
• Loan Amount: $352,000 (20% Down)
• Estimated Closing Costs: $14,080 (just used 4%)
• Rental Income: $3,000

• Monthly Expenses:
• Taxes: $733
• Insurance: $110
• HOA: $5
• Management: $0 (Going to try to self-manage this one)

• Monthly Mortgage P&I: $1,605
• Monthly Cash Flow: $546
• Cash on Cash Return: 6.4%
• Cap Rate: 5.9%

Any input/feedback would be appreciated!  This would be my first offer/property, so I'm sure I may have missed something.

I'm looking around on Zillow and found an area with tons of properties up for public auction/soon to be on auction.  Many of these areas were foreclosed on.

Should this be a red flag for the area?  Or should I not worry about that?

I'm a noob (still looking for my first deal), but I think you need to achieve a total project cost that is around 70-75% ARV, or else you would not be able to refinance and get your money back to properly BRRRR.

I'm super new to real estate investing so please go easy on me :)

My wife and I went around some open houses for duplex units today in the northern New Jersey area along the PATH train line (Harrison, Newark, East Newark, Jersey City). We came across one that was really fabulous and wonderful and we strongly considered maybe getting an FHA loan to buy it, but before doing so, I sat down to crunch the numbers.

Turns out, the property taxes in New Jersey is really high... for this one particular property, the pro forma annual taxes in the listing was $16k.  Assuming I could rent out one side of the duplex at a monthly rent of $2500, the property taxes would eat into the gross income pretty heavily, and after considering maintenance costs and debt service, it was just clearly a bad deal for us.  I worry that this is going to become a recurring story for us as we look around New Jersey.

How are other NJ investors dealing with this?  Have all the good deals in the area evaporated?  My wife and I are still pretty new at this so maybe we're just not good at finding deals that make sense yet.

Thanks Andrew! I have been going through the Ultimate Beginners Guide with the diligence of a student, so as soon as I finish reading through that I'll pick up the book and keep listening to the podcast.

Hi everyone,

I'm an aspiring investor living in Harrison, NJ, in the greater NYC area.  I originally grew up in the DC/Maryland/Virginia area, but for the past two years, I have been working as a software developer in lower Manhattan.

I have basically zero background in real estate, but I hope to learn a lot from this community -- enough for my wife and me to invest in one or more rental properties within the next two-to-three years that will give us a nicer return beyond our retirement mutual funds.  Judging from the first few pages of the beginner's guide, I think we're looking at possibly doing some buy and hold strategies on single family homes and duplex/triplex/quads, since we both love our jobs and aren't quite ready to jump into the real estate game full time.

The amount of information to read up on and understand is dizzying, and I have never so much as held a mortgage of my own.  Still, I'm glad that I found this BiggerPockets community, and I am excited to get to work demystifying the mystery around real estate investing (for me).

Cheers,

Chris