All Forum Posts by: Daniel Green

I think for Englewood- you are probably thinking Englewood Heights which is very expensive.  Englewood is more blue collar IMHO.

Yeah- I was also thinking about Teaneck as well.  I live in Cresskill so want something that is not too far out of the way.  I own a 3 family in Weehawken and that's okay but a bit further outside my travel range.

What are your thoughts on Englewood, Demarest, Bergenfield, Teaneck- those all seem like solid working class neighborhoods and there seems to be multi-families that could be good cash flow properties.

I'm a pretty process oriented person but there are some elements of the BRRR that I'm just not sure about. I was wondering if anyone can correct me here. I'm I getting anything wrong here? BTW- I'm based in NJ and just not sure how the sales contract/escrow would work when dealing directly with a property owner.

IS THIS THE PROCESS EXPERIENCED INVESTORS USE?

IDENTIFY A GOOD INVESTMENT PROPERTY

- Negotiate with seller and agree on a price.

- Send them a contract that includes:

- an out clause for inspection.

- 10 business day close.

- All cash deal

- Stipulation that the Title is clean.

SELLER SIGNS CONTRACT AND THEN:

- I send money to an escrow agent as a deposit? (I'm unsure about this part. Do I have my own escrow agent or does the seller get one? If I have my own, do I send the signed contract with the check as a binder to the escrow agent?)

- Sales contact goes into "Lawyer review" (this is a NJ thing I believe)

- Inspection

- Title search

- Contractors estimate costs

- Hard money application.

- Hard money lender orders an appraisal of the property.

DETERMINE

- Inspection- all good

- Title- is clean

- Repair costs are in-line

- Appraisal is inline with loan to value offered.

AT CLOSING

- Get certified check for 30% of the buy price.

- Check sent to my lawyer from the Hard Money lender for 70% of the buy price.

- Bring proof of insurance.

- Pay Hard Money lender 2 points of the total borrowed amount.

- Likely pay for several months of taxes.

- Likely pay for several months of hard money interest in advance.

- Have insurance on the property.

- Get first installment from HML to pay licensed contractors and then other installments as work is conducted.

POST REHAB

- Work with realtor to list rental.

- Go to bank to get a conventional mortgage. Have the property re-appraised to get the after rehab value (ARV).

- Once traditional financing is approved (assume 2 months) pay-off hard money lender. Since appraisal is now higher receive a large bulk of initial cash invested back.

- Rent apartments and receive payments from tenants. Cash flow positive goal is $400-$600 a month assuming all costs mortgage, taxes, insurance, utilities, cleaning services, vacancies, capital expenditures.

- Do it again.

Yes- the standard lease from the NJ Association of Realtors is free.  The Blumberg one is about $9 per lease.  Good luck!

I use the standard NJ Realtor Lease...I just indicate that no realtor is involved in the lease.  Do other folks do the same?  I also indicate that there is no smoking in the apartment and add some other stipulations.  Here is a link to the doc I use    Lease

I've also used Blumberg contact 59. This is a much more extensive lease. Again I can't advise if these are the right ones to use...just the ones I've been using :)

All solid responses.  I guess I am doing a bit of soul searching which is why I put it out there.  I think I'm not alone- lots of people worried about taking the next step and sitting on the sidelines.  I did by a MFH so I'm not completely out of it but need to figure out a safe/reasonable way to scale.  I know nothing is a sure thing and the devils always in the details.

I hear you JD Martin on building spec houses.  I see them go up all around here (Tenafly/Cresskill) and I'm scratching my head wondering how they're making money on them.  I guess the formula is take a $450K house, tear it down, build a 2,000 square foot home new with 4-5 bedrooms and 3+ bathrooms and sell for $900K.  I'm guessing the building costs are around $150 Sq foot or $300K.  So all in buy/tear down/build is $750...add another $100K for additional expenses (broker fees, grading, surprises)-  All in is $850K.  So profit of just $50K.  Seems like a lot of risk for so little profit.  Maybe I've got my math all wrong here.  Maybe the builders are at $125 per square foot and they're selling at $950K.....then it would seem to make sense with a $100k+ profit.

Or maybe they are achieving scale across a bunch houses.

Agree Michael Lee- I should work backwards perhaps.  I have a good job but I do want to scale things to a point where I can just work from home- perhaps cash flow $10K or so a month and then increase it from there. 

Thanks Jessica.  I will take a look there.   Are you thinking Garfield and some of those areas are better for building spec houses or for Multi Family Rentals?

I'll admit it.  I'm kind of confused so wondering what others think I should do.  Here is the situation:

- I own a 3 family in Weehawken.  Worth about $825K.  Mortgage of around $540K.  It makes a bit of money on the rent roll but not hitting it out of the park.
- I live in a SFH- worth about $550K. Mortgage of around $350K.
- I have about $115K in cash I can use to invest.

Here is the deal.  I don't know whether to buy a multifamily in Northern NJ and collect the rent, build a spec house (Tenafly/Cresskill) or buy a fixer upper and flip it.  Also not sure if I should refinance my other properties to get more $$$.

I feel like spec houses you make quite a bit of profit but I have no experience in this area.  I lean toward multi-family because that's what I'm used to but still my current rental isn't making a ton of cash...even though I will make money on the appreciation of the property it's a long haul.

Any ideas/guidance from the pros out there?  I'm not a complete newbie but I feel kind of stuck/frozen and I would like to scale my real estate holding to make some real $$$.

Has anyone looked at investing in multi-family properties in Englewood?  I have one 3 family property in Weehawken that does well but I live in Cresskill, NJ and am interested in potentially investing closer to  home.  Also would love to hear from anyone building Spec houses in Cresskill and Tenafly area.   Wondering how you make the math work.