All Forum Posts by: Farrukh Amini

 Hey Jeff,

Have you found any other ways to find your rehab on the primary residence besides the 203k loan? If so, are you able to share your experience?

Thank you. 

Thank you @Allan Szlafrok

Started looking into Newark market for MFRs. Done some research but also wanted to cross reference the findings here. So far, these neighborhoods seem like safer makers for good quality renters, yet good rental property investments that could potentially generate good cash flow: Lower Broadway,Upper and Lower Roseville, Fairmont, Society Hill, North Ironbound and Ironbound District. 

Am I on the right track?

 I rounded up the numbers a little but to be more exact, when I purchased, 20% down was 39.2k, closing costs were about 7.5k which put my total cash invested at 46.7k. 

Then I immediately started rehab on the apartment that I needed to rent out. I spent around 16k for rehab. Got a tenant after 3 months of closing that paid $1250/m. Mortgage was $1475. 

Then I slowly finished (over the next 12 months) the apartment that I lived in which required more work. Spent close to 36k because we found damage from termites on one side of the house. 

Fast forward to 2017, refi appraised the house at $390k. I could cash out 80% of the appraised value minus the balance of 146k which allowed me to take out 166k. Since I was still new to this and didn’t know if I would be able to invest all of that money, I decided to be conservative and take only what I needed. Ended up cashing out 113k minus 7k in refi closing costs got a check for 106k.

After cash out my monthly mortgage payments became $2050. 

Within a couple of month got another two family house (246k + $60k in rehab costs, with 25% down put my monthly payments at $1600) rehabbed it and rented. Gross income for the two new units is $3300 plus $1450 for the unit that I rent in my first property gets me a total of $4750, minus the two mortgages $2050 and $1600 leaves me with a profit of $1100/month and I live for free in my 2 bed apt.  Of course there are miscellaneous expenses that come up here and there which will eat into the profit but overall the math makes sense. 

Hope this is helpful. Feel free to pm me for more details or any other questions you might have.  

Thank you @Justin R. and @Jack V. Ospina for the tips. 

What are my downside/risks that I need to be aware of if any?

I would like to ask the seller to do seller financing on a SFR or MFR. What important things should I know and take into account before going this route?

Would greatly appreciate any tips from people who have done seller financing. 

Thank you. 

Thank you for the question @Yinna Wang  I left that part out. The renovation costs added up to around 50k. I did a lot of the work myself to save on labor like floors, some Sheetrock and plastering and all of the paining. Plumbing electrical and other major stuff was done by a contractor. 

Great point about turnkey properties @Kerryanne Henry I see that happening in Jersey City as well. Gotta be careful with newly renovated properties. 

Just saw this now. I'll definitely look out for future events.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Jersey City.

Purchase price: $196
Cash invested: $50,000

A compact two-family house with one 1 bed/1 bath apartment and one 2 bed/2 bath apartment and a small backyard.

What made you interested in investing in this type of deal?

House hack - Lived in the bigger apartment for free while renting the smaller apartment which covered 90% of my mortgage payments. Based on the population trends in the NYC surrounding areas it was clear that this location would be hot in a couple of years. The property is located within 5-10 minute walk to the main transportation hub that gets you to NYC in 15-30 minutes.

How did you find this deal and how did you negotiate it?

MLS. The property was in pretty bad shape and, in the market for 6 months. The Journal Square market was not as hot as the surrounding Downtown or Grove st neighborhoods, so all the attention of investors was elsewhere. We lived in Jersey City for about 5 years by then and knew what the population growth and trends were. The property was listed for 226k and we negotiated it down to 196 by leveraging the fact that there was no demand.

How did you finance this deal?

A traditional mortgage with 20% down.

How did you add value to the deal?

Invested cash to rehab and update the property.

What was the outcome?

The value of the property went up 50% in just 1 year (mid 2015) and 100% in two years after the purchase (2014). Ended up refinancing in 2017 with cash out and investing on another multi-family rental property in Jersey City.

Lessons learned? Challenges?

For the 1st time buyers, I'd recommend doing some research on what to look at during the inspection and going in educated. If your inspector is incompetent or doesn't care, it might cast you. I didn't know much when I purchased this property and trusted the inspector to do the due diligence, but he missed a few important signs of pipe leaks and bursts, which ended up costing me money and stress.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My RE agent is a rockstar and to this date we work with him. Highly recommend Steve Salzer at Keller Williams City Life of Hoboken, NJ.