All Forum Posts by: Gary Miller

Hi all,

I need some advice regarding a deal for what would possibly be my primary residence and first deal.

First some background. I moved in to rental in NJ 7 months ago and I am in a fairly unique situation where my landlord has become a mentor of sorts. He owns several rental properties in the area, co-ordinates a local group of investors and is a licensed RE agent.

After a couple of years organizing my personal finances and financial literacy, my goal this year is to finish the year in my own home and have 1 rental property.

I put an offer in on the rental I currently occupy, but came in under where my landlord (and 1 partner in this property) were looking at to even entertain giving up a cash flowing property. - He bought this 4br/2ba for 285k put 20k +/- in and I rent for 2700. I had the house independently appraised for 410k and offered 385k.

Now to the deal.

We looked at a very nice 4br 2 1/2 bath in my neighborhood listed at 420k. There is and executor of an estate as seller. I suggested to my landlord if I came in with 60k, we borrow from a hard money lender (in this case his group) and offer 300k to close in 2 weeks. We then wholesale it to me, I get a mortgage (I've been pre approved by several companies for 500k) for 400k and take possession as my primary residence, pay back the hard loan, (350 all in for 9 months) and split the difference.

I ran the numbers with 11% interest, 1.5 points, transfer tax and 6% agent fees( my landlord would represent from our side) for 345k and 5k for unforeseens.

The main thing I want to make sure is that this is legal.

As I see it, it is. The group gets a nice short term return, my landlord makes a share of that, agent fees and half of profit. I get 25k rolled into my mortgage for repairs right off the bat, which is a buffer in case of the seller countering or having to sweeten the deal.

The pros as I see it are

Good ROI for the group

Money made for my mentor

I get the house for 25k under list with the security of no other offers coming in and the possibility of 25k profit.

Any and all eyes and insights are welcomed.

Hi all. I found a potential deal (could be my first multi) in my area independently of a more experienced investor/contractor I know who I talked it over with, it turns out he was was looking at it that day. After discussion, he told me he would take a look at it for rehab costs, and let me get some numbers down for a sit down to discuss going in on the deal together. This is a guy I've known and respected for a while, but I only found out recently the extent of his RE experience and portfolio. We have already agreed and will draft a partnership agreement that this will be a cash deal through a to be formed LLC, looking to BRRR the property.

It is an unoccupied 3 unit (4/2, 3/2, 2/1) in an area where multi units are very scarce. It is a full rehab, new septic and roof, all accounted for in the estimate provided by the other investor. I've pulled the rental comps from local SFH and have an all in figure with his rehab estimate, holding costs, taxes etc. My only problem is as small multi units are not common in the area (the only comps I could find are in a more densely populated town 25 mins away), I'm coming up with very different figures for ARV when I use GRM or CapEx (bearing in mind that this will be a full rehab, so will have new big ticket items going in). Does any one have alternative strategies or ways to hone calculations for ARV in the absence of local comps?

Numbers below for reference

All in purchase/repair/holding 265K

Gross annual rent 33k (All utilities by tenants, we are self managing property)

Annual taxes 6.5k

James,

I will be attending a meet up next week in Clifton, North Jersey.  Hopefully there will be a follow up meetings or information about a March date.   Having trouble posting the link here, if you search Sunny Burns NNJREI Meetup, should direct you to the post.  

• Magnolia Room, Top Floor of Clifton Family Church, 78 DeMott Ave Clifton, New Jersey 07011

@Andrew Postell thanks for pointing us in the right direction.

Looking for advice for my Mother in Law.

My wife's father, a 20 year veteran retired in 1980, passed away around 6 years ago. Since then her mother has lived with my family. She has no living expenses and recently asked me about investing her SS and pension in rental property in her name to pass along to the grandkids. Does anyone know if she would qualify for a VA loan or other programs?

@Sunny Burns

Glad you organized this. North Jersey was crying out for a meeting. I'll be attending. Looking forward to it.

@Scott Smith

Many thanks Scott.

Thanks for the input.

My partner is someone whom I have worked with in several different ventures over the years, some very successful, some not so much. As I mentioned he has one property which he has BRRRRd and cash flows nicely.

I did reach out to our lawyer who handles our business affairs, who also had some valuable advice for tax and corporate structure for us.

Gary.

Hi all, I'm a new investor looking for a deal to go in on with an existing business partner (bar business) of 10+years, my first and his second deal.

I will be doing my own research on this but perhaps the forum could help get the ball rolling. If and when we set up an LLC and we buy an OOS deal, does the entity have to be registered as doing business in the state where the property is located. I'm in NJ he is in NY, we have a fairly wide net area wise, looking for ideally multi family. Any other potholes in this road we should be forewarned of? We will obviously be doing our own research and due dilligence, but insight from the hive mind is appreciated.

@Matthew Porcaro

Thanks for reaching out. As the process moves on I'm sure I will have more specific questions.

@Jaysen Medhurst

Thanks for the reply, this was one strategy we had put down on paper, along with a combination of SFH and multi unit for rental or vice versa.

Where we are in Parsippany multi units are rare (but not and unheard of) and will take some aggressive marketing for leads.

Our plan at the moment is to get a fixer upper SFH for the primary residence and look farther afield for the multi or BRRRR rental.