All Forum Posts by: Laurence Fru

Thanks Heath, I think the challenge with the 203k is the loan limits.

As my plan is to go from 3 family to 2 family, I think I would only get a limit of $1,053,000? Is that right? And that wouldn’t be enough to get the property to completed unfortunately. 

Good morning all, 

I’m looking for advice on finding a full renovation of a multi-family. 

The property needs gut renovating - essentially back to exterior walls, then new everything within. 

My original plan was to purchase using an FHA loan with 3.5% down as the property is technically habitable and then fund the entire renovation with cash. However, the work required is more than originally anticipated.

Working through the numbers on the property, the work still makes sense. Purchase price $1m, ARV $1.7m and requires approximately $4-500k of work.
The challenge I have is that with the work being more significant, I wouldn’t be able to fund entirely with cash  

Does anyone have any other suggestions on how this could be funded? Appreciate any ideas or feedback on this

Thanks  

Thanks Jonathan - appreciate the reply. 

Would that still be the case going from a very run down, needing full renovation, 3 family to a fully modernized and extended 2 family? 

Is more units always the better ROI?

Morning all, 

I'm in the process of looking into purchasing a 3 family with the intent of partial house-hacking. In truth, this will be more of a family home, so the plan would be to turn the 3 family into a 2 family - taking the top 3 floors and making them into a owners tri, and then having the basement unit as an Airbnb. 

Does anyone have experience with changing the designation from 3 to 2 family? As this would be one of my first major projects here, this is all pretty new to me. 

Are there any errors I can make with doing so? 

The current tenants in the property are on a month to month lease, due to the nature of the work I would be doing, I would likely be looking to purchase as vacant.

Hey all, 

Question that is not hugely investment related. If you are conducting a home improvement (specifically replacing a kitchen), is this subject to sales tax in New Jersey? 

There seems to be hugely conflicting information out there. 

Does anyone happen to have info on this that is explicit? 

Thanks, 

L

Thanks Joe, if I were to sell now, I would drop circa $30-50k depending on what it sells for - not just in value, but in what I pay out of pocket at this point with the high mortgage and drop in value plus closing fees etc. (as you can tell, when I say I bought the wrong place at the wrong time... I really didn’t make the best investment here - bought with my heart, not my head). 

My logic was - either I lose that now, or I lose it over 3-5 years in NCF

In this situation - would you still say sell? 

It may very well not recover the value it dropped, but there’s due to location, I feel confident it will pick back up over the next 5-10 years. 

In an ideal world - I would stay living here, but life situations change, so will be living elsewhere for 2 years. 

Thanks again for the input. 

I should add - it’s in Jersey City. 

Hey all, 

Due to a change in circumstances, and a poorly (unfortunately) timed purchase of a condo. I'm going to need to rent out my condo. 

For some detail - the unit is worth less than what I paid, and I have a pretty large mortgage on it. The logic is that money is cheap to borrow, and my cash can do more for me if not tied up in the property - but equally, it's in a market that's been hit by Covid a little, and as such I'd rather hold. 

The challenge is that it's a relatively expensive place - and I will be negatively cashflowing around $750-1000 per month / not including any turn over on the property / repairs that would be needed in future. 

The question: 

As someone who has never been a landlord (yet) - is the tax benefit of owning a condo (with property taxes / mortgage interest etc.) going to make it feel better - I'm not counting on it being a hugely appreciating asset - but being based just outside of Manhattan, I am confident for long-term growth. 

When does a negative cashflow make sense? What other things do I need to consider prior to renting? How do people go about renting a single unit typically? 

Basically - I am a complete novice (not originally from the US) and I have no idea how to rent a place here, so I'd love as much advice as possible please. 

Thanks in advance 

Would be very hard to tell without knowing the area in Jersey City and some more details. 

Jersey city has its own intricacies from one area to another. I’m not from Jersey City, so really only know the heights and downtown well, but someone else could give more advice with detail on the area. 

Additionally - without knowing the price and comps, it’s impossible to say if it makes sense. Best of luck with the search. 

Yeah, similar boat for me Mark - I’ll also be keeping the full time gig for the foreseeable future.
House hacking is definitely tempting, I wish it’s something we had done before moving - and wouldn’t likely go to that now. 

Good luck with closing your first deal!