All Forum Posts by: Daniel Gonzalez

@Luis Savery Smart idea to look into student rentals. One thing I would keep in mind is whether the school is mostly for commuters or not. I say this because when I worked near NJCU I would run into students and many of them commuted to the school and lived at home. It might not be a very popular location for NJCU students. Regarding the nearby school in Hoboken, many people I've known decided to live in Hoboken just for the nightlife or on Steven's campus.

As others have mentioned Rutgers in New Brunswick would be great as that is a very large school with a big mix of commuters and non-commuters. Personally, I have always wanted to look for student rentals down in Glassboro. I went to the university there and saw many great opportunities. Down in south jersey, the numbers are more likely to be in your favor. 

I don't mean to sound negative, just my thoughts. Good luck with investing in the area. JC is tough but deals can always be found. 

Hi @Tessa Schaaf

When I was looking for my first investment property I looked at all the FHA/low downpayment options. Most North Jersey markets have a pretty high barrier for entry in desirable areas so this is a good idea. Things I looked for in terms of commutable towns, I kept my eyes open for train stations in town or direct bus routes. This not only helps you directly while you house hack but is a big draw for other potential tenants who work in NYC.

With 203k keep in mind that your rehab costs are added to the mortgage and you'll be paying PMI as well, so make sure you triple check your numbers. Additionally, with an FHA mortgage, you must occupy the property for at least 1 year as your primary residence. You said you planned to live there and then move. Think about whether you'd want to use another FHA loan on the next property.

Hope this helps, good luck. 

@Paul Breitenstine I purchased my investment property with an FHA loan, never heard of a grant offering 10k. The property is a duplex so I'm house hacking it. You could do something similar and not worry about anything. My mandatory year of living there is already up so I could move to another property without any problems. You could also try and purchase it with the intent and then live there till you can refi out of it to a conventional.

I wouldn't go into it with the intention of cheating/lying to the system. Never know who might come knocking on a door, better safe than sorry. Otherwise, FHA, in my opinion, is a pretty sweet way to get into an investment property with not a ton out of pocket.

@Sami Gren You will need to set up your own garbage collection. There are two companies that offer it for Maplewood. Waste Management and Waste Industries. Give them a call and get quotes. They pick up the trash from your property and throw it out, no need to bring the can to the curb. 

Hope this helps. 

@Eric Fichera Not to reiterate what's been said already, but consider expanding your search. Most desirable areas in JC are not in that 300-400k range and the ones that fit that budget are total Renos. Garfield and Passaic have decent properties, just watch out since some are in flood zones. Just something to think about since most lenders will want you to have flood insurance, an added expense. Think of your financing, what kind of loan are you getting, how much can you put down, etc. Think of the type of tenant you are looking for. Certain areas offer more transient tenants, while others offer a family who might stay a few years and be stable. All things to think about. Good luck.

@Eric Luzier Congrats on the purchase. Since you have the lease you know all the terms and particulars about it, as long as it is 100% ending on March 31st, 2020 there is nothing forcing you to renew. I would consult a lawyer if you are apprehensive about this process. Just make sure you abide by all landlord/tenant laws to avoid any litigation and you'll be ok. 

I had this exact same situation when I recently closed on my property. It was a duplex that was fully occupied. Before closing, I had the previous owner notify the tenant about the sale and the lease not being renewed since I wanted to move in and househack it. When you want to owner occupy the property, that is reason enough to not renew it. I had the notice sent 60-70 days before the lease was set to expire (May 31st, they were notified sometime in March). Have you closed on the property? If so you will need to notify the tenant via mail (I had the previous owner do certified mail as per my lawyer's recommendation.) If you haven't closed, tell the current owner to notify the tenant that their lease will not be renewed. Give them notice so they can begin looking for another place to rent. If they don't want to leave, try and find a creative solution such as cash for keys or offering to have your realtor help them look for a place (if your realtor is willing to do so). Sometimes all it takes is this extra effort on your part to avoid bigger issues. 

You shouldn't have any problems not renewing them if you notify them with plenty of time and are going to owner occupy the property. Remember all this advice is not legal advice. If you want a lawyer to draft a letter go for it, it can't hurt. 

Good luck on your first property. 

@Cassandra Alessio Yes I have. I'm also very familiar with the construction process from doing my own work for years and working as a project manager for a GC in NYC. 

It might be better to find an investor and meet for coffee to pick their brain about some of that. Unless the contractor is also the investor, usually most of the decisions are made for them. Contractors are responsible for means and method. Product selection, design, etc is done by the homeowner/architect/designer. Estimating you can get from the contractor or investor. Just keep in mind an investor might already have a "formula" they follow so they can quickly estimate and control the costs. The contractor will probably give you their cost: labor, material, insurance, profit, overhead, etc. 

You can't go wrong either way but I would try and find an investor to take you to one of their projects and then chat about that project. 

@DMikal Mitchell Welcome to BP and congrats on taking the initial first couple of steps. Everything you posted, as others have said, is textbook. In a perfect world, that method would always work because every deal is perfect. You need to establish your own metrics, establish how much risk you are willing to take both in terms of financing and level of rehab. 

a few things to think of

1. have you found a market to invest in?

2. property type, sfr, duplex, triplex, etc. 

3. financing, how will you purchase and fund the reno (unless you can foot the bill yourself)

4. level of reno. facelift or a full gut

5. start looking for contractors NOW. a good contractor is hard to find. a good realtor might know a good contractor. As @David Greene says "rock stars know rock stars"

6. start looking for a realtor NOW. ask around on BP or just call realtors in your area. You can generally get an idea if they are "investor" friendly over a phone call. You want someone who is just as hungry as you if not more so, knowledgable, and honest. Some realtors will tell you its a sweet deal when in fact its crap. watch out.

7. I would take contractors to look at the house with you, again this ties into finding a good contractor and begin forming that relationship

8. have you thought about doing a partnership with someone just to learn the ropes? Not mandatory, but it is just a thought. This ties into your risk tolerance as well. 

sorry to be so long-winded but these were just a couple things that came to mind. good luck!

@Junior Allen Have you tried contacting builders/developers down in that area? They most likely will know of banks that will loan money for new construction. If you haven't I'd look for any investors in the area, they may know of a bank. Plus you will need a contractor to build the house so you should already be looking for someone. it's a two birds 1 stone scenario. Being that you live in Jersey it's imperative you get a good, reputable contractor. It'll be hard to manage the job from Jersey if the contractor isn't honest and has poor communication. 

Out of curiosity is this home an investment or for personal use. That may affect the loan options you're willing to use. Not sure if you already have a contractor or even plans and approval from the town but good luck.