All Forum Posts by: Daniel Vineis

Hey @Tony Freeman Welcome to BP. I live pretty close to you and I am also licensed in NJ. I invest in NJ and Onslow county NC. If you ever want to talk about either market please feel free to reach out. Here is a interesting creative way to get into a multi in NJ. so i know your area pretty well there are a good amount of laundromats in your area. I owned and operated one but sold about 6 months ago. I was trying to buy the building it was in but it didn't work out the owner didn't want to sell. I had two scenarios to purchase the 3 unit mix use building. Since it was a 3 unit building and the commercial space was less then 51 percent of the building SQFT I could us a 3.5 % down FHA loan to move into the top unit. Now the laundromat is still cash flowing and the rent that it was already paying is now just going into the equity of the building. commercial rents are also considerably more expensive then residential so it really helps with your DTI. This scenario was because I already owned the laundromat. The other option was to get a SBA loan. From my understanding as long as the loan is for over $350,000 or more and it is secured by some tangible asset. like a building you can put 10% down and purchase the laundromat and the building and not live in it. This way you can have a business that if purchased right can be pretty hands off and instead of just a regular operational expense now your rent is building you equity. you typically buy a laundromat for 2.5-3.5x its net profits before taxes or owner pay outs. so if the laundromat made $50,000 a year you would purchase it for $150,000. lets say the building was worth $700,000 your deposit would be $85,000 plus closing costs. you would then own a building that is being payed for by the laundromat and other renters and business that cash flows $50,000 a year. Granted it will depend on how the SBA loan is structured. If its a 10 year loan you probably wont see any cash flow but would be building tremendous amounts of equity each year. Might not be applicable to what your trying to do but the more tools you have to make a deal no one else sees the better off you will be. I wasn't able to pull this off but its a solid strategy that I will be trying again in the future.

I am a licensed agent in NJ so I am biased towards NJ. That being said if your willing to invest an hour or so away from where your living now. you will need pretty much the same systems in place as someone investing 600 or 1,000 miles away. Its a big country out there with a lot of markets. Each one able to fulfill a different needs. Take me for example the first home I ever bought was in Onslow county NC. It made more sense to me I had instant cash flow it was a cheaper market and it had more favorable landlord tenant laws then NJ. I can go into detail on the pros and cons of that market if you want to connect. I still invest in that market but now NJ makes more sense for me. If each market goes up 7 percent I would need to purchase 4-5 houses in NC to get the same return as one house in NJ. I now have bigger pockets (pun intended) to be able to not cashflow year one and wait for a better return. granted i have bin able to get clients into homes that cash flow year one and a deal is a deal in any market. My statement above is about the average house listed in each market. If your looking to move into it I bet the kitchen sink on small multis in towns with good school near train stations in NJ. Not to familiar With NY and CT but I know a lot of people that invest in both market I can introduce you and they might be able to help you make up your mind on a market.

@Account Closed I invest in Onslow county. I am from New Jersey but I flip and B.R.R.R.R single family homes and duplexs all over Onslow county. I also go direct to seller for most of my deals so i can help you figure that out.

So its my opinion that you should invest where the numbers make sense for you. I live in New Jersey and the first house I bought was in North Carolina because it made sense for me. Since you are planning on giving yourself a few month before pulling the trigger I would ask yourself a few questions.

1. What strategy do you want to use? Good resource book "how to invest in real estate" by Brandon Turner and Joshua Dorkin pod cast "Bigger Pockets real estate"

2. Whats the highest price range you could go up to and still qualify for a low interest loan? Using your personal income and rental income.

3. Do you want to do a rehab on the property? If so how much of a rehab are you willing to take on. Also what type of loan would you need for the rehab and what could you afford each month in holding costs.

4. How do I analyze a deal? this is extremely important and will also help you identify areas that don't align with your investing strategy. This also takes time to master. A good tool is "BP calculators" and just talking with people in a market your interested in.

After you answer those questions it will help you identify where you personally wouldn't want to invest. The reason being you would either not qualify for good financing or you would feel uncomfortable with the monthly holding costs/reserves need for the property. Once you know where you don't want to invest I would focus on building a team and identifying a market you like. For building a team a good source is book"long distance real estate investing' by David Green. That book is worth its weight in gold when it comes to identifying talented people to help support your investing business. As for identifying a market there are a lot of questions to ask but here are a couple important ones I would do in order to identify a target area.

1. What is the local landlord tenant laws. Not a big deal until it is a big deal then it definitely helps to invest in a state that favors the landlord.

2. Who are the major employers in the area. Typically the more diverse the local economy is the stronger it is. This puts you in a better position to make more money in the long run.

3. What is the average income, rent and home value of the area. Good way to figure out the price range you would want to be in for the area.

4. What is the renter to home owner ratio for the neighborhood. For single family homes I like at least a 70% home owner to 30% renter ratio. This typically means people take more ownership of there neighborhood and puts you in a better position for long term gains in increased property value. at least thats how I view it in my head.

5. What is the most desirable criteria for the area. For example this is my criteria for one of my areas. 3bed, 2bath, +1,100 SQFT ,0.50 acre, fenced in back yard, at least a one car garage and in a subdivision. If the house has all or most of these things it will sell or rent fast for top dollar.

Bonus I like mixed neighborhoods! This means there is a sizable discrepancy between the price of a retail house and a foreclosure or house that needs work. Also there is a reasonable amount of turnover in the area.

I hope this helps you out.

I always include my rehab on my CD and use delayed financing to avoid the seasoning period. Just a thought for you moving forward with your next deal @Paul Chae. Also talk to @Drew Walls not sure if he can help you with the loan being so small but he is a very good New Jersey lender.

Hey Amiel welcome to BP! I would say focus on education and networking.

@Mike Malloy Thank you that makes a lot of sense.

@Jeff S. Thank you very much this was really helpful. Would you happen to know if fractionalized loans are legal in North Carolina?

Hey BP I am about to go under contract on my fourth deal and I am giving private money A shot. I was wondering if I could give more then one private lender first position on my property. I have A few people interested in lending to me but cant afford the full purchase price or rehab. If I was all into A property for $100,000 and had four private lenders give me $25,000. Could I give them all first position and they would own 25% of the property each if the deal where to go sideways? I just want to know what I can offer A private lender that cant afford the whole loan to make them feel safe in addition to A promissory note and making it A personal recourse loan.