All Forum Posts by: JooYung Choi

Highly recommend doing a full rewire. You are risking your property, especially with knob and tube. Since you are going to be keeping the property, wouldn't you want to own a property with updated mechanicals? Less headaches for you down the road.

Your best bet is to buy a home and house hack. That way you can utilize a low down payment loan. Otherwise, you are looking at 20-25% for an investment loan. 

You could buy a home 3.5%-5% down + closing costs, ideally a multi family home. Collect rent and stabilize. Then do it again to move into your next home. Now you can rent out the unit you are living in, should be cash flowing. 

Hey Austin,

I would opt for buying the MFH, but it depends. If the car loan is taking up too much space on your DTI to be able to buy a deal, then it would have to go there first. If you can buy the home you want without paying it off, then go for the MFH. The asset could pay your car loan every month!

@Morgan Tondre would be able to give you some good insight on property management!

Personally, I don't like taking on existing tenants. I like to renovate my property so that I am able to capture the better rents / force equity / peace of mind knowing that property will be good for many years to come.

Always be sure to set aside some % for capex and vacancy. 

Any particular reason why you are investing out of state for your first property? Have you considered househacking your next property and renting out your current home? 

Hi Heather,

Personally, I would start investing sooner than later because the longer you hold, the more equity you'd be able to build. You wouldn't be able to refi out unless you have 20% equity in the property so if you are planning to do renovations, that would be the best way to get to that equity. 

One thing to note is that is generally harder to go from SFH to MFH, but not impossible. Also if you have a FHA loan on your profile, you would not be able to get another one until you refi out. Stacking SFHs utilizing low down payment owner occupied loans is a great way to build your portfolio fast! Just target neighborhoods with high appreciation potential and strategically move to your properties.

good luck!

Hey Lane,

Congratulations on your first property. Highly recommend a lease, even if they are friends. You can use property management software like Innago. There's plenty out there, just find you are comfortable with. Venmo / Zelle is fine too. Be sure to open bank accounts (savings to hold the security deposit, checking for all income / expenses related to the home). Your rent should be relative to what 1 bedroom rentals are going for in your area. Just price it under that since it's a shared space. 

How are you getting a 3.99% interest rate? 

I agree with the other posts here. It is very risky to leverage yourself into 10 single family homes. Vacancy and Repairs could cost you more than $1,500 a month. Not only will you be liable for the PITI on the properties, you also have to think about paying back your HELOC as well.

I would say start with one and then get your systems down first. Once you have a model that works and can easily replicate, you would have more direction on how to better invest the rest of your money. 

Hey Roman,

I currently invest in NJ and out of state. 

Pros of investing in NJ:

-Appreciation potential

-Able to utilize a low down payment owner occupied loan

-Proximity to NY

Cons of investing in NJ:

-Minimal cashflow for LTR

-Property taxes

-Not a landlord friendly state

-Higher purchase price, lots of competition

Pros of investing out of state:

-Cash flow

-Lower purchase price, lower property taxes

-If buying an STR, bonus depreciation / amazing tax benefits

Cons of investing out of state:

-20% down payment for an investment loan

-Out of state managing (you need a solid team)

-If buying an STR, have to self-manage to get bonus depreciation

-Minimal appreciation potential

So I guess it really depends on what you are looking for. If you are a buy and hold investor, NJ appreciation is the way to go. If you are looking for pure cashflow, investing out of state will give you better returns. I will say if you are planning to buy out of state for a long term rental, I would recommend buying a NJ house hack instead.

Hey Giovanni,

Sounds like you have a solid first deal / house hack there, congratulations. 

I currently invest in NJ & Out of State. 

I mainly buy and hold for the appreciation in NJ. Every year or so, I move to my next property to house hack utilizing a 5% down conventional loan, only buying properties that I believe have strong appreciation potential. Of course, the property taxes and the high purchase price make it challenging, but I've been taking advantage of the strong MTR demand in North Jersey so the math has been mathing. 

I invest out of state to target more cash flow with STRs / MTRs. Luckily, I also work a remote W2, so I am able to venture out there to set it up and renovate, etc. 

I have not gone through an eviction, and I am praying that I never will. We have a very strict tenant criteria and always do everything we can to make the best informed decisions. I don't think the fear of an eviction should deter you from investing in NJ. I strongly believe in the power of NJ appreciation and I know my future self will thank me greatly for it. 

Definitely recommend. It's also a checkbox for amenities so I'd say it's worth the $20.