All Forum Posts by: Libby Tucker

Also I'm not sure if they will trash the house after the inspection when moving out.  I've definitely had some bad luck with tenants, especially if they are forced to move. 

Thanks @Dom K. it does help.  I have seen the house and it's not in bad shape.  I just worry that she will squat and not pay - and NY laws would be okay with that.  Anyone else have experience in NY state with Section 8?  I think I might go ahead with the deal since the other floors rent will cover the mortgage while I get her to move, but it's not the idea situation.  Also - the rent is fixed at below-market rates.  

People rent to section 8 because it's supposed to be guaranteed income.  I considered it but I think it's the wrong move.  Like Phil said they are notoriously bad tenants.  The upside is consistent rent.  The downside is they don't take care of anything.  But what I didn't know was that they could take a really long time to leave and during that time rent is not guaranteed.  Or does anyone have a different experience?  Would you close on a house that had a Section 8 tenant?  

I'm really glad I read this.  I'm getting closer to closing on a 2 family in NY.  There is a Section 8 tenant who was given a voucher on January 20th to find another Section 8 house.  It's March 26th and she has yet to have found anything.  If I close on the house, I would likely have to evict her. According to Section 8 housing authorities, I do not have to accept Section 8, and I could evict.  I would want to start the proceedings immediately upon closing.  I just read that it could take 6 months (and also this forum just confirmed).  I was under the impression that the government would pay the rent in the meantime?  Sounds like that was wishful thinking.  Best to wait until the tenant leaves to close.  "In the end it could take 60-90 days to get your back rent." - is this covered by section 8?  by court costs?  

Rebecca - congrats!  And thanks for your comment.  This property is in the Morisania area, on Tinton Ave.  Some suggestions I got from a friend who invests in Philly: 

1) Try asking the seller for financing 

If they have equity in the property and they are an investor they may want the option to carry a note at 6% 

2) Try taking out a HELOC (~4% interest)

I have another property with ~250k equity, but I maxed out the loan amount on this triplex and that is really risky to try to get a HELOC because I could get denied with the new loan. From what I understand you can have up to 5 FHA loans (if you meet requirements).

3) Hard money lender 

Find a hard money lender, but this will run me 16-18% interest.  Can possibly leverage existing equity on existing properties, but in the triplex property I would not have equity yet.  I'm planning to explore this. 

There are 9 bedrooms.  I would live in the 9th bedroom and rent the other 8.  I don't need to do all the repairs at once. It's mostly livable but I would need to replace carpets, paint, perhaps upgrade some laminate flooring, etc.  

If friends/family cash gift works, all else is okay?  Could I ask a friend to lend money to a family member to give to me as a gift? 

Rooms rent for 600-800/mo each, 8 rentable rooms, mortgage is covered with cashflow, hence the reason I could guarantee pay back to a lender. 

It's NYC, hence the reason getting creative often feels like the only option to get in the game. :) 

I was pre-approved to buy a house in NYC (a goal I've had for a long time)!  I now have an accepted offer on a triplex in the Bronx.  I'm looking at a 10-20 year hold and rent strategy. 

Loan requires only 3.5% downpayment, with purchase price of 515k.  

I'm short on cash, I just used what cash I had for a seller-financed deal.   

I was told by the lender that I would qualify for a downpayment assistance grant for 15k but that fell through (the program only allows well-known lenders (i.e. Chase, Bank of America, etc and they were not on the list).  

I'm looking for cash for 3 things: 

1. 1) downpayment (3.5%) 
2. 2) closing costs (5%) 
3. 3) cosmetic repairs (up to 50k) 

We are doing a concession for 15k to the seller so that reduces the cost of closing but without the grant that would have been 15k I'm still short 40k just to close.  After closing I could get a 203k rehab loan for up to 30k I'm told.  

But, I need help to close.  

I'm asking friends, investors, etc for 50-100k to help me close on this deal (and possibly also cover basic cosmetic repairs vs. taking out the 203k loan). 

In exchange I was looking to pay back the loan at 6% over 24-48 months (depending on the amount borrowed).  

Does this sound like a good deal for the personal lender?  Are there people who are willing to do this?  I know there are hard money lenders but I'm not sure the interest rate or term would work for them. 

Are there any other grants or things I should be looking at?  

Does anyone have any ideas or comments based on personal experience?  Thanks so much for the help!  

Libby 

Wow, thanks for all the support!  I actually do have some airbnb rentals to try to save up a little cash.  Also, talking with property management companies and brokers asking about 'giving' me some of their inventory.  The tricky part is they either want a guarantor or they want credit checks, income verification, etc for each of the tenants.  I don't qualify on my own for multiple spaces. 

I found an ideal spot East Village once but they wanted $35k upfront and they were only willing to give me 7 months lease.  It felt shady.  I thought to myself - why spend 35k upfront for rent (I didn't have it at the time though I had 'pre-sold' the spaces 3 months upfront), find a guarantor for backing, when I could use the money towards a downpayment.  Also, on a loan I'm not paying market rent prices and am able to have more revenue.  But I don't have the downpayment.  

I've also searched craigslist for "take over lease" but the management companies still want to run credit check, income verification, etc.  

I'm definitely interested in creative options.  

Thanks Anthony!  Yes, it's a very tough nut to crack with little capital - I've been working on it some time.  But I'm going to crack it!  

Also - another follow up question. Assuming I get a hold of the building owner. I tell them about what I'm planning to do. How do I structure this? Same as creating LLC holding company as in earlier response from Bob?