All Forum Posts by: Joe Almeida

Paul, you received some good advice especially from Scott.

Make sure you get all your costs together, accurately.  Then what the market value of your rental would bring in.  You can stay top of market for your area because it would be new.

And don't forget the garage rental also.

Then just figure your mortgage payment.  Your taxes will probably increase by at least 30%.

If you end up making more money with a positive cash flow - go for it.

Good luck!

Hi Pallavi,  I've both owned and sold condos to many of my clients over the years.  Some have held on for appreciation and positive cash flow, while others have sold and moved on to bigger things.  There's nothing wrong with starting out investing in condos.  It's all about the numbers.  There aren't very many markets in CT that don't need rentals, so no fear there.  Just make sure that the complex you're looking into has a good association and management.  You can tell a lot by the "cover on the book".  If it needs exterior repairs such as painting and roofing, then you have to dig deeper and make sure the association has budgeted for these repairs.  Otherwise expect some upcoming assessments.  Most of the complaints I've received from my clients have been the upcoming assessments.  That can change your returns significantly.

Let me know if I can help.

Based on all the replies received, looks like we all think holding and renting may be the best way to go.  

First of all your current interest rate is something you may never see again. You can take out the amount of money you need to put a deposit on another house - talk to a mortgage lender in your new market of Atlanta to run all your numbers. Stamford is a great rental market, meaning you'll get top dollar and plenty of renters to pick from. Once you turn it into a rental, you will be able to depreciate the property yearly resulting in a great tax savings. You need to look at this house as a retirement plan. You put money into your plan and now it will grow every year - your renters will pay off the mortgage. Better yet, you may be able to pull your original down payment out as the HELOC and have your new retirement plan paying for itself!

Hi Mathew.

This could be a very ambitious project for you.  You started at the right place by checking with the City to see if this is possible.  At this point you should speak with an architect/designer familiar with doing such a project and especially working with the City of Bridgeport.  I've done a considerable amount of construction in Bridgeport over the past 30+ years.  I have someone I would recommend to you that does lots of work in Bridgeport and is very affordable.  I don't know if it's appropriate to put out his contact info in this forum without permissions.  So if you want to reach out to me with an email or call, I would be happy to pass on the info.

I've done both new construction and fix & flip.  I enjoyed and appreciated new construction the most, but probably more risk due to the time it takes to build.  Cost of materials is critical but that affects both types of projects.  Doing a new construction building schedule I found to be easier.  Not very many surprises vs renovations.  I used to use conventional new construction financing but later switched to private money lenders - a lot less aggravation.  The biggest problem I had with new construction was pre-selling the property before it was completed.  Buyers always wanted to make changes and this inevitably delayed the project.  Many of my clients agree and no longer sell a house until completed.  Good luck and have fun!

I agree with Taylor, try to get pre-qualified by a conventional lender first and see how much you can borrow. That's your starting point. Working with an experienced broker/agent can help you try to find sellers that are willing to finance all or part of their sale. There are ways to search for these properties even on the MLS. And finally, don't forget private lenders. They may charge a higher interest rate but can make it easier to buy as long as you have a good down payment. Don't give up!

Congratulations and good luck on your journey Manuel!

It's difficult to answer your question because every market has its good and what you or others may consider not so good neighborhoods.  It's not that hard to research a neighborhood for crime today if you look on the internet.  You can even call the local police department for statistics.  

When my client investors or me invest we always look for our return on our investment (ROI). For example, we compare a 3 unit multifamily in a neighborhood with another in the same neighborhood. But we can also compare a property from different towns or parts of the state. In the end, we are looking for the amount of cash flow we can make on one property compared with another while investing similar amounts of money. Lots of people use Cap Rates. The lower the rate, the higher the price of the property. But we compare the rates for all the properties we are interested in. Then we look at the market rent for the location of the properties we are interested in. Usually the higher the rent, the better the property and location.

I know there are a lot of variables that come into play when choosing investments.  But the most important part is working with a good and experienced real estate broker/agent that is familiar with the areas you are focusing on.  A good broker can supply you with all the data and research you will need to help make the right investment decision for you.  Otherwise you will be traveling in unfamiliar areas without a GPS system!  

Due to the highly competitive market we find ourselves here in CT (and I'm sure many other areas), yes - buyers using FHA financing contingencies are usually out bid by buyers using conventional financing. There's always the fear that the appraisal inspection with disclose necessary repairs which the sellers have to take care of. Listing agents bring this to their client's attention when offers are presented.

Conventional with at least 5% down is the way to go!

Jerryll is right, you need a tax id.  If you expect to get paid, the investor will need to put you down as an expense.  Or you may even being on the real estate closing statement, depending on how you structure your deal.  Let me know if you want to talk, I can still speak Portuguese  LOL

@Nicholas Mangiafico Due to your profession and work schedule, it may be wiser for you to focus on properties that are not major renovations, unless you partner up with another investor. Using leverage is always the best way to grow your wealth in real estate. It appears you've got a nice nest egg to start. Yes HML is an avenue to pursue, but there are many private lenders that would feel comfortable lending you money based on your financial circumstances. (Even though you're just starting your profession, you're definitely in a low risk category for lenders). And interest can be lower than HML (7-9%)

2-4 family houses should be your target. Look for properties that you can add value to either by some renovation, renting vacancies, increasing apartments. Buy using your money and private money (or maybe HML if you can negotiate a good deal). Increase the cash flow and value. Re-finance with an institutional conventional mortgage. And then suck out all the tax benefits to shelter your income! I've done it and so have a bunch of my investors over 40 years. Lots of wealthy people enjoying early retirement!

Let me know if you'd like to chat or need anything.