All Forum Posts by: David Da Silva

Everyone wants to do wholesales and/or be an agent these days but they don't wanna put in the time and effort in learning the #s. Understanding the numbers as mentioned in the other posts (ARV, Running costs/expenses etc..) is literally 50% of the battle and the difference between successful deals and just being another annoying guy spamming emails to buyers..

I would learn what the numbers look like in your respective market and get info by shadowing your local professionals like contractors and experienced agents.

This industry is about adding value, thats how you succeed. Find out what you can offer and if you can sell it good enough you'll have excellent results. The other 50% is consistency and follow ups, but thats a whole other discussion.

On Zillow you can contact the listing agent or use the message box to speak with another agent that can get in contact with the listing agent. Out of those 2 options, your best bet would be to contact the listing agent and explain your terms. The issue with that is the listing agent is most likely gonna be looking out for his seller and not so much you. Personally, I'm not a fan of Zillow at all and I'm an agent myself.

I would find an agent that understands these types of deals and have them submit an offer that protects you as a buyer. Zillow is very generic with info and unless you can research tax info and other items such as liens or inspection issues, an agent (and their team) will save you a ton of time.

Passing by the property can give you a good picture of what shape the building is in. If the outside looks bad, chances are the inside will need work. If it looks promising, you can submit an offer contingent on seeing the property and making sure it's within your budget/expectations.

Wow 3 unit in Montclair? That's not too common there, especially for that price. I'd say jump on it. I work heavily in Montclair and the Oranges. I can assure you if that property is in decent condition, you have your money well invested. Montclair deals are going as much as $100k over asking. 

Sounds like a no brainer to me. Good luck!

I always thought about doing this myself just because of parking situations. I'm thinking Brooklyn, Queens, Jersey City and Manhattan lol parking is terrible there. 

The only real issue I see is that you'll be sweating like crazy in the summer and freezing in the winter. It would pretty much come down to how far your listings are and if you're willing to tough out the weather (don't forget the rain/snow)..

Hi Alexandra

I'm a investment specialist agent up here in Northern NJ. What you say about Properties here not meeting the 1% is absolutely true. The real problem however, is that the 1% rule wasn't designed for high valued properties. 

Here's a perfect example:

I recently sold a 2 family home in Maywood for $725,000. The mortgage came out to just under $4900 per mo (FHA Loan) but the rents for either unit rent out for $3200 per mo (I got qualified tenants for my buyer within 3 days after we closed). This was a turn key property with warranty, if you do the numbers, thats $6400 potential net income over a home priced at $725k.

According to the 1% rule, this home would be a "bad investment" but it's clearly not. This home comes in at .88%, yet the cashflow potential is over $1500 per mo. With more expensive homes in prime areas, the 1% rule isn't as obvious as it would be in more traditional environments. Also keep in mind we are at market lows in interest rates. I'd rather pay a lot of principal and way less interest or taxes, that stuff compounds way more than anything else. 

Rents in northern NJ are only going up, at least for the next couple years they are. There's massive demand and very limited inventory. As long as we have this trend along with low rates, the demand is gonna go up and the inventory is gonna go down. This will drive the prices up. As long as the #s make sense I can care less about buying high. I ask all of my clients if their goal is to buy a cheap home or make money.

I would have to respectfully disagree with that input Johnathan.

NJ does have high taxes, but the rentals are phenomenal in terms of income. I don't look at 1% or any % in terms of income, because that rules loses importance in more expensive properties (.9% of a 700k home is $6300 of monthly income).. 

One of my rentals (2 Fam in North Bergen) is Bringing in $2500 per month in rental income per unit ($5000 total) with only $450k invested. The mortgage is only $2900 with PITI all in..

Another of my properties in East Orange is bringing in a whopping $6k per mo (3x Units at $2k per mo) on a $3k mortgage. You just have to find the deal that makes sense. NJ is bringing in a record number of NY buyers, and most importantly, NY tenants. These are all young professionals in their mid 20s to mid late 30s that are high income earners and make for high quality tenants.

Rents are at record highs here, I can literally break down the numbers for any of the 5 counties here in NNJ and show how much value add is on the table. The only issue in NJ is Inventory - that's the challenge I face as an Agent and Investor on a day to day basis.

Hi Ben,

I work heavily in Hudson county and specialize in multifamily investment properties (I invest there myself as well). Let me know if you need help with anything there.

I ask my tenants to fill out an NTN form, the cost is $40 per applicant, co applicants are free (up to +1). It checks for criminal history, credit, and runs a search on their past addresses. 

Aside from this, I check the last 2 months bank statements and 2 previous tax returns, and call their past 3 landlords (DO NOT JUST CALL THEIR CURRENT ONE, I see lots of people do this mistake, if they're problem tenants their current landlord would be more than happy to say they're great tenants so he can unload them on you). Lastly, I'll ask them to give me a screenshot of their credit karma reports to confirm with the NTN report as a final safety measure.

This strategy has worked flawlessly for me so far:

Here's an NTN sample from one of my rentals:

I only buy and hold for this reason. Even though many of my clients do flips, I consider flips a job moreso than an investment since clearly the main goal is usually to profit on the resale vs anything else. 

The benefit on buy and holds is you don't worry about taxes aside from property tax, which is being paid by tenants anyways. Not to mention you have room for appreciation so your chance of pulling out more equity can increase along with the rents if you buy in a high demand area.

Not sure what your deal looks like, but if you're rents look good, maybe a cash out refi is a better option? You can get up to 80% LTV depending on the loan and none of the tax penalties from selling.

You can always decide to "Flip" at another time.

Hope this helps.