All Forum Posts by: Josh Starner

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $490,000
Cash invested: $150,000

Property generates $4,050 a month income, rents are below market. Expenses including mortgage are $3,100 a month. The play is a 3 to 5 year hold, raise rents to get the valuation up to 600K and liquidate to 1031 into another investment. The 1K a month (12K annual) will be reinvested into the property to minimize taxable gains in total portfolio and increase the value of the property. Looking to turn the $150K to $250K in a 3 to 5 year hold while maximizing deductions.

In my area, I am seeing most listings only listed as accepting Conventional or Cash due to all time supply lows and record demand. With things going significantly above ask in most cases, sellers are wary of the ability to cover an appraisal gap and fear that it may go back on market which taints the property. Additionally with most sales being listed strictly as is, they are unlikely to make any of the needed repairs from the FHA inspection.

Best of luck to you! 

The pros are generally great pricing for the seller, sub-to deals often will have a premium on price as they pose a risk for the seller. 

The cons is that the lender could accelerate payments if title changes, and the insurance companies may not pay a claim if they are not in the loop. It is a complicated. Definitely refer to you loan packet and search for the "due on clause" to see what they specifically outline in their terms. 

If done correctly they can create almost something like an annuity for the seller and the balance of the purchase price you can negotiate the rate in which they are paying you back. Best of luck. 

@Jordan Petchel I am a local investor/resident and agent in AP. You are fortunate that you will be living there as anything 3 family or higher non owner occupied in AP is subject to rent control. (3.5% annual increases with no considerationfor CPI). Rent control has created an environment in which MF houses are trading much lower than similar sized SFH counterparts. Since a lot of the MF's that hit the market are priced low due to "low rents or long term tenants" you have a solid opportunity to owner occupy and raise rents on remaining units to market. Feel free to shoot me a DM and I'd be happy to go into the weeds on this if you'd like. I think I know exactly which one you're talking about and I can give you the details from my end as a local agent/investor.

Best of luck to you,

Josh

Congrats on your expansion Adriana, 

I use Chris Bonk of Bonk Law Firm in Edison, and John Poulos of Poulos LoPiccolo in Ocean Township for attorneys. 

As far as title companies I use Two Rivers Title in West Long Branch as they work in multiple states so I can use them for deals in NJ and others. 

Best of luck to you, 

Josh

It won't be listed, however if you are using a local agent they may be able to ask their collegues to give them a rough number or at least to know if they got ask. This will help give you the most current data. 

Hey Robert, 

I would provide in writing to the tenant a weekly text/letter/email reminding them of their deadline to pick up their property and provide them reasonable times and dates to obtain their property.  Make sure you save these correspondences in case something comes up in the future. Unless the tenant says to you in writing that the items are trash, I would hold onto them for at least 30 days. If you need to re-rent the property you could relocate them to the basement or garage of the property as well. 

Regards, 

Josh

Hey Roger, most towns have the form available on their website. Some require it to be emailed or faxed while others can be submitted directly on the website. This is usually free if you want an electronic copy or the will charge a small fee for a printout. The town clerk is generally the point of contact or the head of construction management.  Takes 1 to 3 business days in most cases, if you go in person and are really nice they might just print it out same day. 

Excited to be closing this week on my first flip! I wanted to share some valuable lessons that I learned along the way. If you are thinking about investing in real estate, feel free to shoot me a message, I would be happy to help. This property earned over 100% annualized cash on cash return. From purchase to sales took less than four months. 

1) Patience is key, make sure the work needed is within your wheelhouse, the less you can sub out the more flexibility you will have in the event you need to complete things yourself to save budget.
2) Pull an OPRA request for all open permits prior to even putting in a bid, you want to verify age of upgrades and know if any permits are still open, especially if you are agreeing to handle the CO.
3) Pull all work permits day of closing, and line your contractors up prior to close. I had already purchased and designed the kitchen prior to closing.
4) Acquire general supplies and fixtures ahead of time, big box construction stores have generous return policies and it will save you time and headaches of having to run out for a paint brush.
5) Meet inspectors and code enforcement officials in person and don’t be a jerk, approach any conflict with curiosity and understanding and ask how they would like to see you address any issues. It goes a long way!
6) Don’t fall in love with the property! I found myself getting lost in the details, looking at things I overlook at my own house. Keep it simple.
7) Design to your demographics. don't overspend unless it's required by the market
8) Have a 10% discretionary budget in your calculations, things will come up. I got stories, just ask.
9) Utilize local social media to vet contractors and take a pulse of the neighborhood, Nextdoor is a great place to see what is happening in your neighborhood, or join a local Facebook group for recommendations.
10) I would discourage you from buying in an area with a HOA, most are poorly managed and the dues add to your carrying cost.
11) Work with the door open and engage anyone who is looking at the house. I was able to meet three perspective buyers just by talking to people who were looking at the house inquisitively. I also put a For Sale By Owner sign in the window to gauge interest in the property prior to listing on the MLS.
12) Be nice and respectful to the neighbors! I carried in groceries for the neighbors and gave them my cell, not once did they complain about noise or work being completed, they knew I respected them.
13) The highest offer might not be the best offer especially if you are flipping in an area far away from your comfort zone. Vet your buyer agents as much as you would the offer. I was fortunate to work with an amazing buyer agent who made my life as a seller and seller agent/owner easy.
14) Lastly, be prepared to learn more than you can in any book or blog written by a guy like me and have fun!

Greetings from NJ, 

The only time I "formally" disclose that I am an agent is when I am buying and selling a property as our state contracts require that we do. My tenants are aware that I do real estate through conversation and frankly it has benefited me as they have given me referals, and insights into properties in the neighborhoods I already own that may be going up for sale.  I think if you have a strong landlord tenant relationship than its a huge win as they can give you a local pulse in neighborhoods that you may not be in on a daily basis.   

Regarding my brokerage, they cut their portion of the commission in half on all properties that I, or a family member or my LLC owns that I list or buy. But they also allow me to list FSBO if I prefer.