All Forum Posts by: Jonathan Cope

Our family began investing in real estate in 2000. We’ve been fortunate to treat the investing as a side hustle throughout that time.

We own units in A neighborhoods primarily. As a result we’ve benefitted from appreciation resulting from increasing primary residence demand in limited NY metro area submarkets. We will continue to acquire incremental units occasionally.

The prospect of recycling capital through the BRRRR method to acquire workforce SFRs also seems appealing. However, to make the math pencil out conservatively the state of target houses is quite rough.

How ugly was your first BRRRR property?

@Brent Coombs

It does feel rather like a flip.

Thank you for your reply.

@Robert Leonard

An impressive HOA, yes.

It includes all utilities, cable, landscape, snow removal, and common area cleaning and insurance.

Thanks for your reply.

Intent: Buy and Hold

10th Property

Town House

1,300 sf

Foreclosure

Asking Price: 215,000

ARV: 265,000

Rehab: 7,500

Rent w/ Vacancy: 2,350

Taxes: 4,850

Monthly HOA: 725

LTV: 75

Rate: 5.5% 30yr

Initial Monthly Expense: 2,150

Buy: Yes or No?

@Pearly Tan I've been an investor in Hoboken since 2000. A few of the brokers in Hoboken do high-end conversion projects like the one you are describing. Much of Hoboken has recently been up-zoned so tear-down work has become somewhat more common. However, generally, the newly developed product is condo and sold at project completion. I would second @Mark Gee , however. Hoboken is a tough place to work. Some background reading concerning the efforts of the NJ State AG and Department of Justice for the district of New Jersey in Hoboken would be advisable. Or read about Peter Cammarano, the former mayor. It is not a city in which undertaking a first project at scale would be advisable. Your MIL might consider a tightly structured Joint Venture with a local developer as an alternative. One where she provides the existing asset and the developer pays for and delivers the product for a stated profit split. In that case your MIL's savings would be needed for legal advice, progress inspections, and other vendor resources. Good luck.  

We have found that accepting pets conditionally, after an in-person interview by me, is a key differentiator in our market. Most landlords in our market will not consider pets of any kind. We get higher rents and longer term tenants as a result. We do not charge pet specific fees but simply charge higher rents in general for our flexibility. If I am not comfortable with a pet then the prospective tenant is out of luck.

One of the business principles of BiggerPockets is to be that mentor at no expense to you. The free Ultimate Beginners Guide should be most of what you need.

New York is complex market to understand. A range of influences make it so. Many, but not all, investors in New York are net worth focused rather than income focused. The tax deferred nature of appreciation and the long term low-risk history of holding New York property make buy-and-hold at cash flow neutral, or even negative, compelling for investors with other primary sources of taxable income. Refinancing out principal-pay-down and equity appreciation is also a common tax free way to generate lumpy income for further investment or consumption. Some investors in New York are also looking for an asset class that is at least somewhat uncorrelated with the equity or fixed income markets their employers may otherwise depend on. Added to all of the above is a fairly consistent and moderately increasing demand for residential accommodation near Manhattan. A very small proportion of the total available residential inventory trades each year because of the stable demand and influences above, which makes competition for the small inventory high and tendency for price competition on the upside regular. Similar demand is not consistent in other real estate types in New York. Commercial and Retail swing more widely as the result of changing demands. Lower Manhattan has seen great Commercial to Residential conversion as a result. And large quantities of street level retail in New York are now empty due to the pressures of Amazon. Many global mega-cities experience similarly complex influences. Hong Kong, London, and San Francisco are examples. And it is the case that the rule of law and foreign exchange benefits can often make foreign investment in mega-cities attractive. Miami sees great influxes of Latin American investment in part for these reasons. A safe store of wealth in a more stable currency.

I would consider making your current residence a rental sooner than later and renting your needed larger residence. In CA your primary’s mortgage interest and real estate tax benefits will be materially reduced beginning this year by the new RE/SALT limits. As a rental property, the interest and real estate taxes will help shelter your new rents from tax, which you can use in part to offset your rental residence costs presuming you cash flow positively. You’ll still benefit from asset appreciation by owning the 2b/2b but you’ll improve your residence, income, and tax offsets. Do explore refinancing or expanding your HELOC while still an owner occupier for simplicity of process. And you might explore whether, in addition to your new rental residence, you can use the employer funding for an additional residence that has rental potential in a lower tax state (e.g., Texas/Utah) if you are permitted to work remotely for a portion of your time to reduce your CA state income tax burden. We used an approach similar to the above while living in London having lived in New York/New Jersey. Buying in London was appreciation attractive but the downside was cramped quarters. We opted to rent, which resulted in better accommodations cheaper, and used excess funds plus rents from the rental of our US primary to acquire more US rentals. We filed taxes per day per geography/country to manage costs down. Took paperwork but nothing back breaking. Good luck.

Welcome Good luck The rules are different but the concepts are the same. I bet you’ll be able to find plenty of Danes and expats to chat with here. (We used to live in the UK as expats.) Set up some key word alerts for your geography. I suspect you are not alone.