All Forum Posts by: JooYung Choi

First off, congratulations on your first property deal. No money in the deal, 70k equity and you are cash flowing. 

Something to consider:

Cash out refinance - You'd be able to get a lower rate, pull that equity out tax free and use that to buy your next property. 

Buying a property turn key is great if you are sure the renovations were done properly. Instead of spending money renovating it yourself, you are purchasing a finished property with the best loan product there is (30 year fixed, lower interest rate than other products).

IE: Let's say you are buying in an area with ARV 200K

Buy a 100K home and renovate with 75K -> BRRRR -> 160K loan, 15K in the deal

Buy a 200K renovated home 5% down -> 190K loan, 10K DP + closing costs

Option 1 will require time and energy, but less mortgage. 

Depends on your style, but personally I wouldn't mind buying turnkey and paying a little more if the product is good.

It is hard to find a perfect BRRRR deal on the market these days. Personally, I am comfortable with leaving up to 50K in the deal.

50K to have 20% equity in a fully renovated home that will be cash flowing sounds like a win to me. 

Honestly, buy and hold is the best strategy for most assets (stocks, real estate, etc).

The amount of appreciation you'd get in a 10 year span is significantly greater the cash flow you'd get in that time span. 

The goal is to get both with every property you buy (if buy and hold if your strategy)!

Hey Kevin,

The plan to live in the condo for a year and rent it out after would be a good plan but just some things to think about:

-HOA policies on renting

-Will the rents cover PITIH?

I personally do not like condos because of HOAs. They also tend to appreciate much more slowly than single family homes.

Come on over to NJ! You will grow to love it as much as I do :)

I agree with the above posts. Unless you can foresee incredible appreciation in your area, the numbers just aren't penciling out. If you can walk out of this deal with 20-30K, I'd take it and tackle your next project!

If I were in your shoes, I'd keep that 2.65% rate. You will easily cash flow and as long as you are able to manage out of state, it'll just be a nice cash flowing property in your portfolio. 

If managing out of state is something you'd rather not do, you could also hire a property manager or a find a cohost to explore the MTR option. 

Also something to think about is if you did sell, what would you do with the money? Opportunity Cost!

Hey Brandon,

You have plenty of capital to start your search now. Personally, I don't like to do 20% down for a house hack but rather 5-10% and use the remainder to renovate the home. You'd be able to force equity and if done correctly, you'd probably be sitting at 20% equity and drop that PMI anyway. The key for investing in New Jersey lies with the appreciation. You aren't going to find incredible cash flow (unless you MTR). I am willing to bet that in 7-10 years, even if you did nothing to the property other than maintain, you would be sitting on a lot of equity.

Best of luck!

Hey Bonnie,

I second the MTR option. Of course you will have to spend some money furnishing, pay utilities and manage the property more. The trade off is significantly higher rents! That's how I am able to cash flow in a market like New Jersey where high home values & property taxes really kill all deals for long term rentals.

MTRs would be a great pivot to cater to the digital nomads! I don't think it affects vacation rentals because you will always have a large pool of vacationers travelling to your market. But if you have a property in a major city, the MTR game is extremely powerful. 

Definitely the right way to do it. If I were to go back in time, I would have also gone for a MFH instead of a SFH. Work your numbers conservatively and definitely budget a little more for your capex / vacancy. Fourplexes are hard to come by in North Jersey and competition is fierce. If you are open to it, duplexes would also be a solid first house hack. Good luck!