All Forum Posts by: Michael Carlson

Hi @Michael Carlson what's your goal purchasing? Replacing roof, repainting house, minor landlord scaping for a multi family is not going to see a major jump in ARV. I need more information to give a clear diagnosis/ advice. I really need to know what your personal plan is with the property, are you house hacking or buying strictly as investment. This makes a huge difference when it comes to removing tenants. If existing tenants are 50% under market value, you will need to make sure current tenants are out. You cannot just raise rents 50%

Not sure what your cash reserves are or if you are planning to 1031 or something along those lines but I would rather see you keep cash in your pocket and apply it to a rehab that involves addition or updating kitchen/bath so you can see sizable jump in ARV and rent increases.

After 40% down I will still have 200k cash in pocket. I will update the kitchens and bathrooms, there is hardwood throughout the house so the rest of the house is in good shape. I'm looking to keep this long term (35 years). Current tenants are paying under $1k a month. I would want them to leave but if they wanted to stay I suppose and increase to $1400 a month would be fair.

0 Votes

Jersey City, New Jersey

Quote from @Jaycee Greene:

@Michael Carlson With those numbers, and using $2,400/unit for rent, I'm coming up with a 7% cap rate on the $580k ARV. This seems to be a VERY good deal for a BRRRR and I think you should be able to find a local lender (bank or credit union) that would finance this with a DSCR loan.

Thats awesome thank you so much for the information.

1 Vote

Jersey City, New Jersey

Quote from @Jaycee Greene:

Quote from @Michael Carlson:

Quote from @Jaycee Greene:

Quote from @Michael Carlson:

Hi Biggerpockets community just wanted to check in and see what you guys thought of this deal

490k purchase price duplex in Morris county at 6.5% for 15 years. With my 40% down payment mortgage with property taxes and insurance comes out to $3600 a month.

Current rents are 50% of market value, I'm looking to renovate and bump up to 1800 a unit which is still at least $400 below market value for a 2 bed 1 bath in Morris county.

I strongly believe after replacing the roof, repainting the house, minor landscaping, minor kitchen and bathroom updates I could increase the value of the house to at least 580k. It has modern electrical and copper plumbing. Electrical work was done in the past 10 years, all romex.

I don't feel so confident about this deal since my last deal was 350k purchase price, 100k in renovation and 700k sale price but I need some place to park my money. What are your thoughts?

Hey @Michael Carlson, welcome to the BP Forum! How much will the reno cost and how long will it take to complete? What zip code is the property in?

Hi Jayce, thank you for your response. Zipcode is 07054. High end I'm estimating $20k. I'm doing the roof myself as I did on the other property along with the other renovations. Total time will be 30 days max.

@Michael Carlson Great, thanks for that. I'm assuming this won't be rented to a Section 8 tenant, but I often work with my CFO clients and set a "minimum rent" for their property at the Fair Market Rent (FMR) and usually increase it from that number based on the developer's desired tenant. The FMR for that zip code for 2 Bedroom unit is $2,400, so I think you'd have a solid basis for a MUCH higher rent. Whether you can get $580k for a 2BR house there, I have no idea.

By any chance, are you modeling your reno project to end up looking like this one: https://www.realtor.com/realestateandhomes-detail/244-Myrtle-Ave_Boonton_NJ_07005_M64709-02530

This is a 2 family so its actually a 4 bed 2 bath, 2 bed 1 bath each. I saw that listing for sale, the one I'm purchasing is much nicer on the inside without the ancient steam heating. At 650k i feel that asking price is too much, the garage space is nice though

0 Votes

Jersey City, New Jersey

Quote from @Jaycee Greene:

Quote from @Michael Carlson:

Hi Biggerpockets community just wanted to check in and see what you guys thought of this deal

490k purchase price duplex in Morris county at 6.5% for 15 years. With my 40% down payment mortgage with property taxes and insurance comes out to $3600 a month.

Current rents are 50% of market value, I'm looking to renovate and bump up to 1800 a unit which is still at least $400 below market value for a 2 bed 1 bath in Morris county.

I don't feel so confident about this deal since my last deal was 350k purchase price, 100k in renovation and 700k sale price but I need some place to park my money. What are your thoughts?

Hey @Michael Carlson, welcome to the BP Forum! How much will the reno cost and how long will it take to complete? What zip code is the property in?

0 Votes

Jersey City, New Jersey

Hi Biggerpockets community just wanted to check in and see what you guys thought of this deal

490k purchase price duplex in Morris county at 6.5% for 15 years. With my 40% down payment mortgage with property taxes and insurance comes out to $3600 a month.

Current rents are 50% of market value, I'm looking to renovate and bump up to 1800 a unit which is still at least $400 below market value for a 2 bed 1 bath in Morris county.

I don't feel so confident about this deal since my last deal was 350k purchase price, 100k in renovation and 700k sale price but I need some place to park my money. What are your thoughts?

0 Votes

Jersey City, New Jersey

All Forum Posts by: Michael Carlson

Michael Carlson has started 1 posts and replied 5 times.

Post: First time multi family duplex buyer

Post: First time multi family duplex buyer

Post: First time multi family duplex buyer

Post: First time multi family duplex buyer

Post: First time multi family duplex buyer