All Forum Posts by: EDWARD M.

I just came home from visiting a 3-family home selling for $569000 with property taxes of approximately $10,300. Basement 2 bedroom receiving rent of $800 (can rent for $1000-1100 easily), first floor 3 bedroom current owner lives in, second floor including partial attic 3 bedrooms renting for $1500 (can rent for $1650-$1700, same for first floor apartment). Apartments are in great condition, move in ready. Basement and 2nd floor tenants will stay, they have been there for several years. Water is included in the rent payment for both tenants. However, the basement tenant is single no others living in the apartment, second floor only two people living there. Has off-street parking for at least 6 cars, can probably increase rent for another $75 a month each. 

I'm calculating a monthly payment of approximately $3,931 going FHA, and $3,186 going conventional with 20% down. I'm not sure how I should analyze this and if it's a worth while purchase. I will be living in there for at least 2 years and moving on to another hopefully by then if the market works in our favor. This area has a VERY low vacancy rate and I feel comfortable making our first purchase here.

Does it make a difference in analyzing whether I go FHA or 20% conventional? Obviously monthly payments are much less going conventional but how do I determine if the return is favorable? I need help, we did love the house since it's in such great shape.

I am currently applying for a loan. I'm not sure if my lender is calculating my DTI correctly. Please let me know if this is correct:

Gross Monthly Income: 6,000

Monthly Debt: 610

Rental Income: 1,300 * .75 = 975

PITI: 2800

DTI Limit: 43%

She is calculating it as (6,000+975)*43% = 2999.25

2999.25-610 = 2389.25

Is this correct? I think it should be 6,000*43% = 2580

2580 + 975 - 610 = 2945 ????

I did not think you could only use 43% of the rental income. Please if someone can help, I'm supposed to put in a best and final offer by tonight!

It sounds odd, because it is. The seller's agent showed us the home, with much emphasis on the basement/ground level floor. In the Hudson County, NJ area, basement level is illegal to live in. The property is priced as if the basement were a 3 bedroom apartment. However, even if I purchase at this price, I could "live" in the basement and live COMPLETELY rent free. After I move, my brother and his friend would rent the space out for a place to work during the day providing me with a potential 300 - 500 in monthly cash flow assuming a 30% expense rate. I would use the extra cash to make extra payments and if my calculations serve me well, I would get rid of PMI (another 450 or so a month) in about 6 - 7 years.

Another issue is I intend to put 5% down. Apparently the house was previously under contract but the buyer was purchasing through FHA. Obviously, the appraisal came in almost 19% below the sale price so the loan did not go through. I'm figuring if I offer near the asking price, I would be in a similar situation (considering I'm only putting 1.5% more down. I need help!

Not available for the purchase of 2F properties?

Anyone know if anyone offers 5% conventional loans on purchases made in the Hudson County, NJ area?

For about two months now, I have been searching for my first investment (preferably rental) property in the Hudson County, NJ area. I feel as if property prices are extremely high and i can't seem to find the numbers I want in a duplex, maybe a 1.25 DSC, rents are high but purchase prices are just as high. I've looked in the North Bergen, Union City, Jersey City Heights, and West Bergen JC area (least familiar with). What am I doing wrong?!

I've come across a couple distressed properties that I believe would be good for fix and flip. However, I was thinking if it was possible, I would think of buying under LLC with private investor money, fix and sell to myself with an FHA loan. This way, I'd sell for the least possible amount and already have some equity built in after buying the house. Does this make sense and is it possible? What kind of risks are involved here?

I've been searching for my first investment (rental) property, I'm in the North Jersey area. However, I was initially searching for properties completely renovated with limited income thresholds unable to sustain expenses such as maintenance, capex, etc. I was not calculating correctly. I was also told I should find something with some wiggle room, allowing for me to make some light reno and build some equity in the home. I need advice!

Hey Shawn Breyer ! I see what you're saying and I've heard of these numbers before. I feel like it's pretty much impossible to find a decent place with those kind of numbers in my area unless I put 20% down (which isn't what I'm looking to do at all). I was thinking if a find a place is good shape, lessening the risk of high maintenance costs in the near future, I could refinance after hitting the 80% of PB threshold, and increase the amount of money coming in for future expenses, then. Not sure if this is a reasonable strategy.

I'm looking to purchase a newly renovated 2 family home in Jersey City Heights less than a block from public transportation into the city. The home is selling for $509k I am thinking of putting in an offer for $490k (FHA). After discussion with the seller's agent, my agent mentioned the seller would probably take the offer.

First floor three bedroom, with finished basement and access to backyard is rented for $2,000

Second floor is now vacant was rented for $1650

I am thinking first floor can rent for $2200 and 2nd floor for about $1700.

My payments would be approximately:

Mortgage: $2,093

Taxes: $830

Insurance: $93

PMI: $404

Total: $3,420

I would be living there for a little over 18 months and eventually rent out. I know after the 20% of PB is paid, I stop paying the PMI. I would probably make an extra $200 monthly payment towards the mortgage, estimating to pay 20% of PB within 6 and a half year mark, and the home is in great condition newly remodeled I am not anticipating many maintenance expenses, it's in a low vacancy area, separate utilities, I would only have to pay water for both units.

IS THIS A GOOD DEAL?! I'm looking to put in the offer by tomorrow morning i would appreciate all the help in the world because i'm really on the fence about this one. (It's my first purchase) Thank you!

I'm looking to purchase a newly renovated 2 family home in Jersey City Heights less than a block from public transportation into the city. The home is selling for $509k I am thinking of putting in an offer for $490k (FHA). After discussion with the seller's agent, my agent mentioned the seller would probably take the offer.

First floor three bedroom, with finished basement and access to backyard is rented for $2,000

Second floor is now vacant was rented for $1650

I am thinking first floor can rent for $2200 and 2nd floor for about $1700.

My payments would be approximately:

Mortgage: $2,093

Taxes: $830

Insurance: $93

PMI: $404

Total: $3,420

I would be living there for a little over 18 months and eventually rent out. I know after the 20% of PB is paid, I stop paying the PMI. I would probably make an extra $200 monthly payment towards the mortgage, estimating to pay 20% of PB within 6 and a half year mark, and the home is in great condition newly remodeled I am not anticipating many maintenance expenses, it's in a low vacancy area, separate utilities, I would only have to pay water for both units.

IS THIS A GOOD DEAL?! I'm looking to put in the offer by tomorrow morning i would appreciate all the help in the world because i'm really on the fence about this one. (It's my first purchase) Thank you!