All Forum Posts by: John Errico

Hey everybody! We're having a monthly meetup for investors or soon-to-be investors in northern New Jersey on Tuesday, July 25th starting at 7 PM at the Houlihan's in Weehawken (that's at 1200 Harbor Blvd) (ask for John or the real estate meetup at the front). There should be ample parking and ample space!

We've had great turnouts in the past with a lot of BiggerPockets members and are hoping to see many more next week!

As with our meetups in the past, everything is very informal: we'll be networking and exchanging tips and stories over drinks near the bar, there won't be a set agenda. We usually have people with a very wide array of experience, ranging from people curious to get involved in local real estate investing, to people just starting out, to developers and other real estate professionals. Many of us invest in the local markets (Jersey City, Union City, North Bergen, Hoboken, Weehawken, West New York, Hudson County generally, and so on)!

Please message or PM me with any questions. If you can't make this one, we do it every month on more or less the last Tuesday of the month. Looking forward to seeing everyone very soon!

@Nick Intrieri

Hey @Yaro L.: I had a very similar situation on a house in Union City, with fines/violations (and also open permits). There are a few options that come to mind, but, as a general statement, this will take a *long* time, so hopefully there is no enormous pressure on your side or on the seller's side to get the house sold immediately (not that the seller could realistically expect that with tons of violations and fines anyways!):

First, you can buy the house notwithstanding the violations, open permits, etc. Obviously this is enormously risky because you'll then become liable for those violations and fines--but I'll explain below why this might be at least a conceivable option, if you are buying with cash/not a mortgage.

Second, more than likely, if you're getting a mortgage on the house, your lender will more than likely want to see some sort of CO or CO equivalent (in Union City it's a "No CO" letter)--regardless they probably wouldn't give you a loan if they know that there were outstanding fines/violations that perhaps exceeded the value of the house! The reality is that the city doesn't have an incentive to actually impose the full amount of the assessed fines, because they know that no future buyer/owner will ever be able to pay for them. Your best option is to therefore negotiate with the city to see if they will be willing to reduce the fines. I've done this before and is conceivable, but it requires BOTH the seller and buyer to be on board with this: obviously, you, because you're buying the house, and the seller, because they're currently liable for the outstanding fines. Normally the settlement agreement would stipulate something like: you and/or the seller pay a much reduced amount of fines (I think on one occasion it was agreed a > $500,000 fine would be reduced to $20,000) to the city and the city will drop the outstanding violation, in exchange you agree that you will actually remedy the violation(s) within a certain amount of time (apply for the appropriate permits and so on).

If you are confident that you can negotiate with the city and resolve it that way, it may be logistically easier to buy the house with the violations, and then resolve them aftewards (my first point)... but it's obviously MUCH safer for you to come to a binding agreement with the city prior to closing (that stipulates that the city gets paid for whatever they agreed to accept for the violations right after closing). Closing with the violations outstanding is probably only a viable option if the seller isn't interested in these negotiations, or the seller is a bank or etc. that is unresponsive.

Third, you may still have a problem, even with the violations resolved/a settlement agreement with the city, of open permits that delay that issuance of a CO or no CO letter. If you're buying this cash this is probably no big deal (in my opinion), though it would be nice to get a CO prior to closing. If you're buying with a mortgage you'll need to close or resolve these separately from the violations. The problem is that they may be related to whatever gave rise to the violations, but this is more of a building department issue, as opposed to the violations, which are more of a legal issue. Depending on the manner of the permits, you can usually have a licensed contractor sign an affidavit indicating the work was done satisfactorily, or you can actually call for an inspection. Probably the affidavit route is the best way to go, although you'll have to pay a non-trivial amount to get contractors to sign off on work that they didn't do ($500+ per trade in my experience).

Re: the violations--I know at least a few people in the city that you would need to speak to. It might also be advisable for you to hire your own attorney to negotiate with the city. Likely the first step will be speaking with the city attorney, in person if possible. Unfortunately I highly doubt that the building department will be of help in attempting to resolve this, unless you meet with the head of the building department, who will then likely just tell you more or less what I told you here). Send me a PM if you'd like and I can give you the contact info of a few people. (FWIW too: I am a lawyer but not your lawyer so these are just my general thoughts, not specific legal advice towards your situation!)

Best of luck!

Hey @David Lichtenstadter: you're generally not legally required to have a separate bank account (if that is your question), but for practical, accounting, and possibly some legal reasons depending on the type of entity you formed, it's probably a very good idea. There are a many banks that have small business bank accounts that are functionally free (for example, if you also maintain a personal account there, or you have a minimum balance or number of transactions). If you're going to be collecting rent in cash and depositing it into this account, I'd suggest a bank that has convenient branches for you to deposit cash into--other than personal convenience to you and fees, most banks are pretty much interchangeable for this purpose, in my opinion. Local banks in Hudson County that have a lot of branches and probably have good deals for small business accounts (though I've never used them personally for this purpose) are Oritani Bank, Lakeland Bank, and Provident Bank. In addition, probably every national bank you could think of has at least one branch somewhere in Hudson County. Good luck!

Hey @Bhavik Patel welcome! My 2 cents are, like others here, that house hacking is the way to go when you're starting out. This is how we started out in Union City (not knowing that the term was called house hacking): we bought a 2 family, lived in one unit, and rented the other unit out. At the time, the rent from the unit we weren't living in covered something like 75-80% of carrying cost for the entire house (we were able to get a great deal, this is in like late 2013/early 2014). Like @Cory Lehnbeuter we used the savings from that to buy a second house, etc. and now we have a good number of smaller multifamilies mostly in the Union City area. The advantage to living near where you are is that you can manage the property yourself (assuming you have time), and you'll also learn first hand about property maintenance, finding and maintaining tenants, and so on.

My inclination is that you're going to be paying quite a premium for a turn-key ready property anywhere in Hudson County/northern New Jersey. Although I agree that it can be daunting to consider a renovation project as your first house, the fact is that some of the homes in the area (certainly there are a lot of exceptions) are not in absolutely terrible shape, more so that they just haven't been updated in the past 30 years. I think it's always easy to work with a home that no one has updated in the past 30 years (assuming whoever last worked on it did a good job!) versus one where someone has renovated it within the past ~10 years, but done a really bad job. So don't let things like ugly floors/carpet, old/bad/crazy paint, old kitchens, old bathrooms, etc. deter you. I'd be much more concerned about things like crumbling foundations, buried underground oil tanks, weird/illegal/collapsing extensions, etc. Even things like a roof needling to be replaced or old boilers can be factored into the renovation costs.

In general, I think the cost of taxes is factored into the price you'll pay for the property and the rents you'll receive. It's not as though cash flow in the area is stunted because taxes are high: I think you can look anywhere around the NYC area (which has a hugely varying property tax structure) and see that the cost of property adjusts largely relative to the property taxes assessed on it. 

Best of luck! Feel free to PM me if you'd like to grab coffee or lunch in the area!

Yea, there's definitely a possibility that the tank was not removed/that the work was not done at all. Quite frequently, in my experience, with open permits for plumbing, electrical, whatever, the work was actually done but the contractor/owner never called for a final inspection. That can be a headache if you now own the property (and most towns/cities will not give you a CO or allow you to take out additional permits until the old permits are closed), but sometimes you can resolve it by getting a contractor to sign an affidavit affirming the work was done correctly (or finding the previous contractor who did the work, ideally), or by calling for an inspection yourself to close it (either the inspector sees the work wasn't done, or was done). This process could be trivial or very challenging depending on the type of work, the town, the inspector, etc. 

For oil tanks: in my experience, usually there is a building inspector around or on site as the tank is being removed, because they need to at least see the tank out of the ground to get the permit closed. It's conceivable that the previous owner/contractor dug up the tank but decided to abandon it instead of remove it (maybe the tank was partially under the structure but this was unknown prior to digging it up) and didn't re-file for an abandonment permit. It's also possible that the permit was pulled but the work was never scheduled. I think it's probably unlikely that the permit was pulled, the tank was removed, and then the permit remained opened... but I suppose it's conceivable that there might have been some ancillary things to do to close the permit that were never done. The permit itself should have the name of the contractor, and you can call them and see what happened, but my assumption would be that the tank is still in the ground one way or another. You could also try to find the inspector who (ostensibly) was on site and see if he remembers or knows what happened. Worst case scenario but a conceivable outcome is that you'll have to re-dig up wherever the tank was or currently is to close the permit. I doubt the city will just close it for you based on your word/belief that the tank was never removed and you have no interest in removing it now.

In my opinion, it would be very unlikely that the permit was pulled, the tank was dug up and removed, and then contamination was found and subsequently hidden... if an oil tank company actually pulled a permit for removal they are probably scrupulous to know that they wouldn't be able to get away with that. I suppose anything is conceivable though.

Hey guys, looking forward to seeing everyone tonight at 7! 

Please remember that this is at the Weehawken Houlihan's (NOT the one in Secaucus where we've had some of our previous meetups)! Ask for John or the real estate group when you enter. We'll be near/around the smaller bar area!

Hi Octavio! No need to bring anything except yourself. You can feel free to bring business cards if you'd like to share them with other people who are there.

Hi @Salman Saeed: you can RSVP right here on BiggerPockets if you'd like, that will help give us a sense of how many people are coming, although the meetup is free for anyone to attend and there is no "check in" list. Hope to see you there!

Hey everybody! We're having a monthly meetup for investors or soon-to-be investors in northern New Jersey on Tuesday, March 21st starting at 7 PM at the Houlihan's in Weehawken (that's at 1200 Harbor Blvd) (ask for John or the real estate meetup at the front). There should be ample parking and ample space. Please note for those of you who have come in the past that this is NOT the same Houlihan's as previous meetups, which were in Secaucus. 

We've had great turnouts in the past with a lot of BiggerPockets members and are hoping to see many more in March! 

As with our meetups in the past, everything is very informal: we'll be networking and exchanging tips and stories over drinks near the bar, there won't be a set agenda. We usually have people with a very wide array of experience, ranging from people curious to get involved in local real estate investing, to people just starting out, to developers and other real estate professionals. Many of us invest in the local markets (Jersey City, Union City, North Bergen, Hoboken, Weehawken, West New York, Hudson County generally, and so on)!

Please message or PM me with any questions. If you can't make this one, we do it every month on more or less the last Tuesday of the month. Looking forward to seeing everyone very soon!

@Nick Intrieri

Hope to see everyone tonight at 7! We will be behind the bar in Houlihan's. Please ask the hostess at the front for the real estate meetup if you can't find us. Looking forward to it!