All Forum Posts by: Jonathan Greene

Don't do anything, but tell him no and walk away. You are about to walk into a first-time investor trap. You only rent to fully verified and vetted tenants or you will be in for a long road.

@Natalie Schanne , there isn't really negotiation on back HOA dues. You can't take possession unless you pay the HOA dues in full. On-market you can negotiate that out against the sales price, but not at foreclosure. You are responsible for all liens and all of them are not always disclosed at the time of the auction. IRS liens are your responsibility as well sometimes.

Great point @Account Closed about sitting down with the tenants face-to-face to review the lease terms. If you really want to be a good landlord who cares about your tenants, this is THE way to do it.

@Eric S. , correct. If you buy in your name, they will know. If you identify yourself as part of the management group or ownership, they will know. The only way they won't know is to have an outside handyman take the service calls and buy in an LLC.

Thanks @Beily Pan . The only drawback that I am aware of would be regarding financing. If you intend to finance through an LLC, you will need 2 years of tax returns for the LLC. This is where the problem lies. LLCs funded by cash and held by cash can do this much easier.

Hey @Eric S. . One of the biggest mistakes new investors make when they attempt to house hack is that they don't property vet the tenants. In Northern NJ in my market, most rentals are tenant pays the realtor fee which does reduce the applications, but seemingly increases the likelihood of a successful tenant. With this in mind, landlords still attempt to find tenants on their own and fail. Using a service like NTN is a fail-safe for tenant background. Tenants who have to pay a security (one month or one and a half months), one month rent and one month realtor fee may have a higher likelihood of success and certainly have more skin in the game.

Also, one of the biggest failures of new landlords who house hack is letting the tenants know that you are the owner. If at all possible, you should buy in an LLC and let the tenants think that you are just another tenant in the building so you get less knocks on your door at midnight because their faucet is leaky.

In short, the majority of disastrous tenant stories boil down to rushing to find a renter, keeping holdover renters who have not been checked, and not doing your due diligence on your prospective tenants.

Hi @Rachel Krull . If your sister is looking for a home to live, why is she looking for a foreclosure? Does she know that in NJ for foreclosures that trade at sheriff's sale auctions, these are the requirements:

1. cash only-no finance, 20 pct down at time of the auction

2. as-is transactions

3. no inspections

4. no viewings (unless it is also listed as a short sale at the time)

5. you are responsible for holdover tenants and holdover homeowners

6. auction docket is not fixed, most properties get continued between 4-8x before selling at auction

These are just a few of the pitfalls with buying foreclosures to live in. Let me know if that makes sense. There is a reason that foreclosures are investor-friendly - because they can and are used to taking the risks above because they are going to flip the properties of fix and hold.

@Yinna Wang - Wholesalers can definitely find off-market opportunities, but their interests are not always the same as yours and therefore, the property value to them and you may be much different. They are looking for a quick trade to make money to offload early so it may not be what you are looking for.

Any numbers that get tossed around on the podcasts in terms of door/pct are location specific. With taxes as high as they are in NJ, the numbers are different. Owner/occupy is a great first option, but you have to be prepared to be an on-site landlord. So, unless you are buying in an LLC, which is preferable, the tenant will know their landlord lives next door. This means 1 am knocks on your door because their toilet doesn't work.

Block value can be assessed by looking at an overview of all the median values of homes on the block to assess where your deal fits it. You will want it to be at the low end so there is high return with time. Also, multi-family homes in Northern NJ are often on blocks mixed with single-family homes so you need to be able evaluate the difference in value between them.

You only need a contractor to give you reno estimates and you definitely want to find one of those on referral from someone you trust. I hope this helps.

@Chaits J. - a title search SHOULD yield all results to be weary of, but normally you can get most of it up front. With properties that end up at foreclosure, I never say anything is a guarantee and pre-title work can get expensive for multiple properties when you have to bid to win on them, before knowing the initial bid price (which often is too high). I sent you a PM for referral assistance in your area.

Hi @Yinna Wang . There are a variety of options to get into the multi game in Essex, but as @Jessica Zolotorofe mentioned, the taxes are high so you have to have a strategy in place to make that work. There are deals to be had for multis off-market with an agent who knows how to find them or via REO and foreclosure before they drop, but on-market multi deals are hard because there are SO many people bidding on them. You need to have a gameplan in place that takes into account the following:

1. What is your cash flow expectancy for the property? (Harder than it seems to achieve with high taxes in many areas)

2. What is your property management experience and how will you manage the property?

3. What does the corresponding block value tell you about the future value of the property in terms of your rent roll?

Remember the best deals for multis will come on ones where renovation is necessary to get the rents up to where you want them. Hope that helps a little.