All Forum Posts by: Joe Edwards

 Man this is a NO BRAINER! Do not sell. You paid 170k and it produces 60k. The effects of Covid will be around for the next 3-5 years for sure. If your worried about holding use the 3 years to pay it fully off or be a smart investor and put that 60k to work in another property. 

If you sell your will flip and make a quick buck but you will give 40% of the gain to uncle Sam. If you 1031 exchange I don't think you will get as much cash flow your getting based on the amount of money you will net from the sale. 

Ride the wave my friend, Ride the wave!

Keep us posted on what you decide 

@Russell Gronsky

I can't give full opinion because you aren't being transparent with any of the numbers. When you say you over priced it at one point and now you have it 5k under whats it worth makes absolutely no sense without knowing the numbers or where did you get ARV numbers from.

From experience flipping tons of houses how could you miss that your property is on a train track. Thats a big big big issue if you over paid when it was distressed and then over renovated it.

But with that being said I think your biggest issue is you missed the window for the market. Being on the east coast like you but more north I would never list a house for sale in the month of November, December or January. With the holiday season and the weather its the worse time. People are occupied.

If you list and September or October and you do get under contract I would just pull it and re-list it in mid to late February when the market takes off.

As a tip in the months while your down spend a few hundred a month doing targeted digital marketing via, Facebook, Pintrest and Instagram for private showings. This has worked for me several times.

Good luck. I hope your deal isn't one on very slim margins

No problem! I would just recommend before you pay him what you think he completed you might want to hire a new GC first to confirm all the work is done correctly and up to code and they wont be charging you extra to make changes. If what he did need to be changed they you need to subtract that cost from what you think you owe him. 

Hope things work out for the best

@Joseph Mah

The hold won't even take that long. Maybe a year or so and you will be back on the upswing.

Unfortunately, the drug addicts and the homeless are part of the correction. Eventually they will leave and find refuge else where . Most likely were everyone is running to and SF will take off like a rocket ship.

When I was a kid (in the late 90's) as a east coaster I use to ride skateboards out in SF. Back then the Mission District was nothing but a waste land filled with junkies, homeless squatters and you could buy property for nothing. Look at were it is now roughly 20+ years. Insanely expensive.

Its a marathon not a spring! We are wealth building not flipping

@Juan Mora

Ok I would most certainly invest in more real estate. I will assume because you own a rental property already and your smart enough to get out the HOA your a critical thinker.

1. The 2.75% property do not touch that rate. Paying it off is useless. HELOC that property so you can use those funds.

2. When you sell the 300k condo make sure you 1031 exchange it so you can roll those funds into 1 or 2 other properties that cash flow.

In short use the sale of the condo, your credit and your 150k W2 salary and leverage it to borrow cheap money to create more cashflow. If you are concerned about more pay down pay a extra payment or 2 a year and you will cut the mortgage down 7.5 to 15 years.

Just remember its all abiut your life goals and what amount of passive income you need to live comfortably so you can let go of the full time gig if you want.

Best of luck

@Joseph Mah

I feel for you man! But, I want you to not panic. What goes up must go down and then it will go back up again.

So you need to think clearly and get creative. You have a asset in a great market that will have demand for sure. You just have to weather the storm of the moment so you can come out on the other side up or even.

I'm located on the east coast in the expensive NYC area. 30% swing seems like a lot but it will swing back 30+ 10-15%. Thats the beauty of these markets there is always demand. You just in the dip of the cycle.

1. I would suggest tighten up your belt and trying to get you person expenses as lean as possible before your tenant lease is up

2. Recognize if you sell now you will be taking a loss and leaving a asset that will give you back way more if you held on to it. So do what you need to do to hold it and protect it. Now with that said if you can afford to hold it then you have no choice but take the lost. If I was you I would say maybe you have to loss 1k a month which is 12k a year to get back to the upswing of the market to grab 50k or more and additional equity. The fees you will pay for the sale at that price point is much more expensive. Realtor fee, transfer tax, closing cost etc....

3. Don't lower the rent since it's rent control get creative. Of the rent price as normal with some perks. Free internet, parking, food credit, utility credit etc......

4. GET CREATIVE!

5. STAY CREATIVE!

6. Covid is just a moment in time. Your in a dip and are a little nervous because you been on a little bit of a sugar high. Just realize a lot of people moving will be moving back its just the way it is.

In NYC they said it was dead in the 80's, 90's, 2008 now 2020. Pay attention to the cycle. Every 10 years for the most part it was forecasted doom and gloom. Not take a look at the appreciation of the same assets from each 10 year cycle. INSANE!!!!!!

Now I ask you to do the same cycle analysis for Cleveland or Indiana. Hahahaha what a disaster you will see. The swings are up and down 50% +/-. So on average a 50k property in the past 40 years is worth 180k at the top of the market and when things contract it will be 110k.

Your in the right market dont buy into all the realestate day trading hype of buying cheap in cheap markets is always a winner. Because its not. Buying cheap on the outline of a major city is completely different the buying up a city that has never really been alive

Best of luck brother dig deep and get CREATIVE!

@Nwakaego Onike do not pay this person another penny! You are being fleeced

@Nwakaego Onike

Ok, thank goodness you are in the state of New Jersey. As a very experienced GC in the state I will let you know as the consumer in this state you are in the driving seat because I'm almost certain nothing about this transaction is "consumer fraud compliant"

NJ has very strick (to be honest barbaric) laws on the books for contractors in the state. I would say probably the worse in the country. This state has the CFPA ( Consumer Fraud Protection Agency) with determines how all contractors are suppose to do business in the state. These rules are very specific in there nature. Specific to Contract must have language, font size, right of refusal, insurance/ works comp, registration, fee schedule, start and completion date, rescheck, warranty etc etc etc..... The average NJ GC contract should be 16-18 pages minimum not including project scope of work.

If your contract with him isn't this long minimum then his contract is consider non CFPA compliant and he is on the hook for "TRIPPLE DAMAGES" That would mean 3 times the damage of the total contract prices no matter how much of the project he already completed. So you 80k contract is a easy 240k award from a judge or a substantial settlement from the GC to you to make it go away.

So if you need guidance on what you need to say to convince him that he has stepped on a huge land mine all walk you through it. Just shoot me a PM.

As a GC what I'm telling you doesn't make me feel good because I personally hate the law because there are many shady people that take advantage of the law to do harm to hard working people for the benefit of there own self greed. However, in your case it is pretty clear your in Newark and you signed up for the whole bate and switch. Give you a contract you can stomach so you sign. Start the project by not providing the right construction methods, create issue that you know are going to happen and then hand you a massive bill. Its completely disgusting but unfortunately it happens all the time in this state but definitely in areas like Newark.

On closing I notice someone mentioning in the other comments about him leaning your property. NO A CHANCE IN HELL. He would be the stupidest GC on earth. The only concern you need to have is i hope you are not so far ahead of him with payments because he may just try to ghost you. If he does that he probably doesn't have a real foot print in the state and that means you may be out some funds.

Like I mentioned feel free to reach out and Best Luck on this one!

@Ryan Copeland

Congrat on closing! Welcome to the pond

@David Han its when you are able to refi all your purchase, closing, carrying money out of the deal. You have no money in the deal and you still have pure cash flow and equity.

Winning!