All Forum Posts by: William Kwong

Saw this question was from LONG time ago and that you probably already purchased and figured this out on your own but will answer just in case.

Ex. If the purchase price was $500K and the rehab was $100K (using 203K loan) your loan amount is $600K. (Say you put 3.5% down)

If you refinance and lets say the appraisal came in at $800K, they offer 75% LTV for multifamilies meaning they'll lend you $600K to pay off your old loan. ($800K * 75% = $600K)

You've built 25K equity, PMI will disappear and you forced 3.5% equity to 25% equity.

Hope this helps.

It use to be! Unfortunately, JC has a limitation that was voted on about two years ago where they banned AirBnB for investment purposes. You have to apply for a permit with the town and will be able to AirBnB the property 2 weeks out of the year. 

However, if it's an "owner occupied" property, then you can apply for a permit for STR and there's no limits to how much you can rent it out. Cheers!

@Stefanie R. Hey Stefanie, to other people's point JC is very difficult to find a 450K multi. Bayonne has some price points under 450K but taxes I feel are higher than JC. Also, I've noticed rental prices are relatively cheap for the purchase prices of what you get. Union City is not bad but typically will need updating. You'd have to do some soul searching and figure out what your goals are with the house hack. (Return on Cash flow? Or Return on Equity? Of course to be both is ideal but you'd have to run the numbers and also would depend on your down payment. Also, if you're looking for more turnkey properties, then you're most likely at your limit of 450K.)

Essex in areas such as Newark, Irvington, East Orange are where you'll get the biggest bang for your buck IMO but definitely do some due diligence on all the areas. Bloomfield has some options in the $400K range but they are slim and need some work. Rahway (Union County) is a good town and has a train station also, but not as walkable as other urban areas. - There's a few options there right now & Garfield in Bergen County has some options as well but you'll most likely need a vehicle for all these places as their more suburban.

Let me know if you need anything else.

I'm a JC investor & agent but looking in Middlesex as well as Hudson & Union counties for more properties. Would definitely love to connect with y'all!

Hey @Joseph Chacko vellukunnel,

1. Definitely get the structural engineer to look at the joists & support beams to see what's up with the uneven floors. Home could've settled and nothing further to do or you could be seeing a bigger issue at hand that the seller needs to fix. Is it being sold As Is?

Horizontal cracks on the foundation may just be wear & tear. Vertical cracks could be foundation issues. Definitely make those assessments during inspection or prior to making an offer if you can to save yourself the time. If the home is 100 yrs old, I'm assuming it's a definite gut which is going to require new plumbing, electrical, heating, cosmetics.

I spent about $140K reno on my multi family in the heights on NY ave and there were massive problems with it but it was a gut to 3 units & adding 2 bathrooms, 3 brand new kitchens 4 bathroom reno in total, all new flooring, sheetrock , insulation, framing, doors, electrical, plumbing, paint, parts of roof etc. (Heating system left alone and siding left alone)

Get quotes as in Hudson county I've gotten pretty expensive pricing. I have a good GC who I trust who does work for my clients and myself. Let me know if you want me to connect you, not sure if they're too busy lmk. Also, try to get two or more electrical boxes so the tenants pay their own as well as heating zones. Water - landlord plays in JC heights typically. Use LVP flooring, it's cheaper than installing new hard wood floors and they're more durable for longevity purposes. If you only have to resand the flooring and it's cheaper, maybe go with that instead,

JC township will definitely require permits for plumbing, electrical, gas lines. Moving/adding any lines, etc. I would need to know more specs on the house but with material shortages It's difficult to say how much to budget. 80K-120K for full gut perhaps but unsure with lumber beings so expensive and shortages.

I would plan 9 months of vacancy between the pain you will endure pulling permits & having your contractors show up everyday to complete the work & then final inspections to get a CO. Took me longer but I didn't like the contractor I used, and unfortunately he took advantage of my kindness. Live and learn I guess haha.

2. I did an FHA 203K loan and it was a pain but it worked out and I built the necessary equity to BRRRR. I cash out refinanced with a local Hoboken loan officer I know and they were really great. Work with a loan officer & agent to know what your appraised value is before you even do the work. With my refi I wrapped in closing costs as well so avoid paying it twice. It's going to be incredibly difficult to cash out refi BRRRR in the Heights right now, the pricing is too high imo. This was back in 2016.

3. I would talk to your agent about this, they should know these answers like the back of their hand but I'll give my two cents. I think there definitely is still room for appreciation but with a lack of opportunity, inventory wise. If you're looking for long term buy & hold, there's money to be made. - Renting in this area is solid, I've gotten what they call B class tenants and more or less they've been great. Turnover is higher than suburbs. I've had 1 tenant stay for 3 years, the others have stayed for a year on average but it depends. You're close to the bus stop so you'll attract NYC goers & they move a lot around here. But I have the tenant pay the broker fee & in my lease I ask them within 90 days if they want to stay for another year and give them 15 days to respond so I have 75 days to rent out the property to avoid vacancy.

4. I have contractors / an awesome home inspector. My GC should be able to find you the rest.

(Some helpful benchmarks: Kitchens Stay under 17K-20K with materials/labor, bathrooms stay under 8K with materials/labor, Flooring stay around 2.50 per sq ft for labor., Paint try to stay under 4K-5K)

Hope this helps, let me know if you need anything..Cheers!

@Kevin Agunbiade I currently house hack in Jersey City heights / did a 203K FHA loan BRRRR strat. Sounds promising regarding potential cash flow for 3 bed 2 bath units depending on purchase price. Which part of JC?

Yes, y ou can live in your basement and I believe someone made the point above about no stove. Like a lot of JC multis I go inside of, I do see lots of illegal kitchenettes down in basements anyway that are live listings and 2 fam dwellings sold as is. I also see full bathrooms in basements which Jersey City won't allow you to build. (Only Powder Rooms) However, in Jersey City during a resale, only a fire certificate is required to close vs. acquiring a Certificate of Occupancy (CO). The fire inspection can be performed by a licensed real estate agent as well.

I am also selling a similar 2 family with your specs in the Heights on Hopkins ave. Let me know how it goes or if you need any help/advice.

Did underwriting say there was something going on with your credit? Seems like it's the banks fault for not being able to deliver the clear-to-close. Unless you took out a loan mid transaction lol. Deals get delayed for a multitude of reasons, this is unfortunately the reality of real estate transactions and both sides suffer. They can ask for the $500, and I totally get why they would, doesn't mean you have to pay it and I doubt they'll kill the deal for $500. Everything is negotiable. As a buyer's agent I would put this on the bank, not you and decline to pay. Unless they would absolutely kill the deal over $500, then I would have you pay it. Hope it all works out!

Hey, not sure if you still need someone.

Curran & Company LLP - Newark

Ryan Curran was really solid for me this year. I've also used three different CPAs over 3 years and I'm sticking with him going forward. 

Hope this helps. Cheers!

Hey @Gage Green , These guys just about covered everything. But to add, try to connect with some investors at your local meetups. I networked with some flippers/contractors and went to their flips that were in progress and asked a lot of questions. Bought them coffee & offered to pay them for the day even but they were nice enough to not take my money anyway. Now I'm more seasoned and we all keep in touch for potential deals in the future.

I can also send you a spread sheet of my rehab costs from when I subcontracted everything out on a flip. It prices out labor & materials for mostly everything. Granted, it was before lumber went 3X & materials skyrocketed but it's helpful to reference. This is also in New Jersey so Delaware could be a little different.

GC costs could result in a 15-20% upcharge from subcontracting out but you're also super involved in the process which is difficult if you have a full time job. Hope this helps!

Hey @Cody McVay, I guess it will really depend on your financials & what your expectations are with each home you plan to house hack. From a loan perspective, if it's an owner-occupied loan, you'll qualify for a lower down payment but the bank may require you to live there for 12 months. (At least that's how it is in NJ to my understanding.) So you might have to put that 25% down instead and you'll most likely receive a higher interest rate if it's for investment purposes. Of course taking into account mgmt costs 7-12% for each property to see if the numbers make sense for your ROI for each individual property. I see the appeal since you'd have to commit to renting for the next two years if you didn't house hack but seems difficult to pull off.

Just my opinion of course, I would stick with building your rental portfolio in Columbus and expanding later. it's a market you're familiar with and from what I heard has a lot of potential if you're OK investing from a far for the time being. I guess I would want 4 props close by than 4 in different states but that's just me. I think if you were able to figure out the finance side of things it would give you a better idea of next steps and how feasible it is. Let me know how you make out!!!