All Forum Posts by: Eric A.

Juan Perez what neighborhood are you talking about? I admire your energy, but you need to get your ducks in a row first. 1. Talk to a mortgage banker/ mortgage broker to get pre-approved for an FHA 203k. If you need a referral for a mortgage guy PM me. They will tell you how much you can borrow in total given your income, debt, and credit score. This should be the absolute first thing you do. 2. Once you know how much you can borrow, then you know your absolute max budget. Remember to factor in closing costs which can be very high in NYC. A good rule of thumb is 3-4% of purchase price. So if you purchase a 2-fam for 400k, your closing costs will be $12-16k. This in general will need to come out of pocket and paid at closing. It's difficult to finance your closing costs here so don't count on it. This means if you buy a 400k property you will need 16k for closing and 3.5% of 400k = $14k for down payment. So right off the bat you need $30k in cash just to close the deal. The bank will likely want you to have reserves also in addition to down payment and closing costs so you might need to have closer to 40k total cash to get started. 3. Once you've completed steps 1 & 2, it's time to go shopping. My thinking is it's going to be hard to find a 2-family for 400k, but if you find a fixer upper, make sure the total cost of the purchase and renovation fit within your max loan amount. Unless you're doing a major renovation (100k+) it's unlikely you are going to create enough appreciation to successfully flip the house in 3-6 months given all the carrying costs and transaction costs. 4. When you locate a property it's time to get quotes from licensed and insured contractors that are willing to work with the FHA payout schedule. Make sure you find a few that are familiar with the FHA program. 5. As folks have mentioned above, FHA requires you to live in the property for 1 year before you move out so make sure you intend to do this. In theory you could refinance out of the FHA loan in 90 days but at that point you'll need 20% equity in the property to switch to a conventional loan which is unlikely to happen. I think your best bet is to find a fixer upper that doesn't need anything major/structural. Just new kitchens and bathrooms, coat of paint and maybe redo the flooring. Make sure you fix the outside of the house nicely. Move in with your 203k, rent out all of the spare bedrooms or extra apartment for cash flow, and in a year or so, assuming the market is still rising, sell it for a profit. Or you might find you can get positive cash flow renting the bedrooms out separately to college students etc. for a longer term buy and hold. Good luck!

I doubt any property, even in NYC, will appreciate enough in 3 months to cover your closing costs on both the purchase and sale (let's say 3% of sale price each time), plus cover any broker fee if you intend to market with a broker on the flip (6% of sale price). Unless of course you find a fixer-upper and you force the appreciation by doing a gut renovation with an FHA 203k rehab loan. Then it might work, but you'll likely be spending way more than 500k all in to do that.

@Llewelyn A. sent you a colleague request

Andrew Postell is NY state covered?

JamesAnthony Rice I got a guy. PM me for his info.

Hey @Algernon Brown it depends on the number of units.  They are slightly increasing the limits for 2017:

Single Fam $636,150

2-Fam $954,225

3-Fam  $814,500

4-Fam  $1,221,750

- See more at: http://www.fanniemae.com/portal/funding-the-market/mbs/news/2016/loan-limits-2017-announcement-112316.html#sthash.LKjkCQYO.dpuf

Hey Amit Kal sorry to hear about the job but sounds like you will land on your feet regardless. I'd ask you this: does your W2 career still interest you? Or is it a major drag to get up in the morning? If you can tough it out for 2-3 more years in corporate land earning a high salary I think you can at least double your cash flow and then quit. Will your kids be starting public school soon and will that save you money on the nanny? You seem like like you're so close to the finish line but if you just muster up the energy to put on a happy face for one more corporate job you'll have the resources to set your family up for life. If your goal is to continue living in NYC the bar is high for what you need to earn. Have you discussed moving away from the city with your wife? That would be another way to tie the ends together. I've often said to my wife that the only way we'll ever be financially free is to leave NYC (I spend even more cash than you). There are plenty of beautiful towns within 90 minutes of NYC in the Catskills area where you can live amongst nature and at a fraction of the cost. Anyway back to dreaming.

@Peter Assaad maybe the thing to do is to buy the condo in NYC with the 200k, then soon after, you take 10% equity out (100k) to invest in cash flowing  properties elsewhere.  Sure your monthly housing payments go up, but hopefully you can more than offset that with your positive cash flow in the midwest.  Then you are killing the proverbial two birds with one stone.

Kadeem Howell

Sorry hit post too early. Was going to say even some still "up and coming" neighborhoods are over $1mm for a 2-fam already. If you want to be under $1mm you'll have to settle for being pretty deep into Brooklyn / far from the city or in a rougher neighborhood with very little going on.