All Forum Posts by: Justin Eaton

Hey Tyler, i have been investing in the SJ area since 2013, specifically in your area. I have done deals in Burlington, Gloucester, and Camden Counties so i could definitely help you out! I do home inspections all over South Jersey as well, so i am pretty familiar with a lot of towns. To answer your question, the most financially rewarding situation would be to buy a duplex that needs work, this is like BRRRR method combined with a house hack. The more work it needs, the more equity you should have off the bat after the rehab is complete, if you buy for the right price of course. Example - you find a duplex for $125k, rehab it for $25k, and by forced appreciation (rehab/updates) your increase the value to $175k-$200k. You would have around $25k-$50k worth of equity right form the jump. (Which you can leverage for the next deal!!) Then you rent one unit and live in the other. Depending on the location and rental income you would probably cover more than half of your monthly PITI payments. It really all depends on how comfortable you are with buying a distressed property and managing the rehab. I have a decent amount of flip experience so i personally would never buy anything turn key. Feel free to message me as well and we can exchange info. I am planning on setting up BP meet ups in the South Jersey area after the new year.

cc: @Morshad Saami Hossain

I had the exact thought of @Robbie Reutzel ! Instead of being limited to the options you provided, you may need to think outside the box in finding and financing/acquiring investment properties. I highly suggest reading @Brandon Turner book "Investing in Real Estate with No and Low Money Down," he dives into some different options that you can use or combine in order to purchase real estate. 

Good Luck! 

Here are some before and after exterior photos of some of the flips I've done. Maybe these will give you some ideas! 

Hey Mike. I think the best bang for your buck for the exterior finishes would be to paint the shutters, brick, garage door, front door and what looks like wood wall finish on garage. If it's in the budget, an architectural roof shingle would change the entire look of the home. (Definitely don't power wash the roof as you will destroy the shingles, if roof isn't in the budget you can do a soft cleaning of it. Most power wash companies offer this service) I typically match the front door to the shutter paint color. White garage door. Play the new roof color off of the exterior color that you choose. Definitely power wash the driveway and walkways. I would suggest removing a few of the trees closer to the house if it's in the budget, it will open it up a lot. If not trim the limbs to above the roof line. Lastly, get some colorful shrubs in and a nice mulch bed. I can't post photos to my reply on the app but i will post another reply from my computer tonight of some before and after of flips that I've done that may give you some ideas. Good luck! Justin

Hey Vince, you should first contact a plumber and bring them to the duplexes. The situation that would make this conversion the most difficult and expensive is if the branch supply plumbing (hot and cold) for each unit is inter-connected inside the walls and/or slab foundation for each unit. (Im not sure if your duplexes are on a basement, crawl, or slab.) In any case, it would be extremely difficult for the plumber to separate the supply lines for each unit if they are currently inter-connected and concealed. If the plumbing is easily accessible (Basement) or are already separate it may be easier. You would have to hire a licensed plumber to do this work. 

Contact the utility company regarding the meter. In NJ, you have to buy a meter from them ($400/meter) and have your plumber install it. 

It is a great idea to separate the water for each unit and can have a significant implications on your cash flow. If you can do it for a reasonable price i would definitely recommend it. 

Good luck

Justin 

I have been working on this deal since January of this year and currently have a verbal agreement in place with the seller of an 8 unit mixed used property. I plan on closing by the end of the year. Here's how it started and progressed:

-I Saw the property come on the market but knew i didnt have the funds to come up with 20-25% down thru a bank for a commercial loan. I just so happened to be about half way thru reading @Brandon Turner book Investing in Real Estate with No and Low Money Down, crazy coincidence. I finished the book and decided to type up a personal letter and mail it directly to the home of the owner of the property. The letter gave a brief intro of myself and REI experience and mentioned to him that i was interested in the property if he was willing to do seller financing or a master lease option. Thinking my chances were slim, it was shocked to get a call from him about 2 weeks later.

-Unfortunately, he was not willing to do either. I had also recently read the short book by @Brandon Turner about how he acquired his 24 unit, which really got my wheels turning. At this point i decided to try and bring in a partner in the deal and who would come up with the down payment to secure the commercial loan thru the bank. In return i would pay them a % monthly and give them part ownership. After speaking with my lender, he said he would only be comfortable structuring it this way if it were a family member or if the current owner would lend back part of their equity to cover down payment. We then spoke about the specifics of the property and when i told him the address, he said that he knew the current owner because he was the lender for him when he purchased the property 16 years ago. Crazy coincidence. Now i knew i had a good chance of working something out with the seller. 

-I then spoke to the seller who at this point i had become good friends with, (he was a very nice older guy in his early 70s) and asked him if he had enough equity in the property that he may be interested in lending back part of what he would be cashing out in the sale to cover part of the down payment and take second position on the mortgage. 

-He was open to doing so and after 10 months of negotiation and working on this deal, i have a verbal agreement in place with the seller as follows:

*For the purposes of this article i won't go into analyzing the specifics of the deal (Cash flow, property condition, etc) only the purchase details. *

Purchase price: $400,000

Commercial loan down payment 20%: $80,000

Seller financed portion of down payment: $50,000

Buyer (me) down payment out of pocket (before closing costs, etc): $30,000

Cap rate at current condition and occupancy: 11 

I hope to get this property under contract within the next week or so and close by the end of the year! 

Good luck out there! 

Justin  

Hey Tyler, i would typically agree that a 1 bedroom may not be as easy to rent as a 2-3 bedroom. However, in my opinion i don't think this will be as much as an issue in Collingswood specifically. Collingswood is highly desirable for singles and young professionals who work in the city because of Patco and local attractions (restaurant, coffee shops, bars, etc).  Also, Collingwwood is on the up and up for sure and think the property will appreciate nicely. 

Good Luck! 
I am also in SJ, we should connect! 

Justin 

bump 

Hey all, I am looking for book suggestions primarily focused on commercial, apartment/multi family, and mixed use buildings. Thanks ! Justin

Thanks @Joseph Scorese and @Jessica Zolotorofe ! 

@Marco Y. I was planning to call the local construction office, however, I've dealt with them on a couple flips and sometimes its seems like they have no clue to the answers that I'm looking for. Its in Magnolia, NJ