All Forum Posts by: Michael G.

I strongly recommend you do not rent the basement as a unit. No matter how much of a livable space it may resemble, if the basement or garden level isn't legal habitable space, you are taking on significant risk renting it. Here are some scenarios that may help you make this decision:

1. Fire caused due to illegal tenancy in basement may void home insurance coverage (i.e. stoves are not permitted in basement)

2. In the event of a fire caused by an illegal tenancy, injuries or death sustained by tenants in your building may result in criminal charges against you. 

3. Renting an illegal unit does not offer you the protections a traditional rental would. Your tenant could not pay rent and there would be little you can do about it on an eviction standpoint. They can also report you to the city which may result in fines or civil penalties. 

Yes and no!

I think housing prices in a general sense will pull back in the near term, but investments (multis vs. single family dwellings) and their respective locations have the opportunity to resist steep pull backs. If I was looking to buy now, i'd be very selective of the location, more so than before, due to the risk of down trend.

Another factor to consider is all the new apartment buildings/condos that have been built in the last five years. I don't know about you guys, but i feel like i see a new one being built every day! I bring this up as a warning to those looking to enter the "luxury apartment" market - I don't want to be competing with these developers for rental prospects after I've paid a premium for my investment. Look to purchase something that distinguishes you from the competition!

Hi Ravi.

I would proceed with caution to say the least regarding a negative cashflow of 500/month. Im not sure if that is including any other costs (i.e. maintenance, renovation, and other typical expenses), but your taking a sizable risk with such a negative cashflow. 

Even with a hot market, you should be able to cashflow better. Perhaps consider taking a higher equity position in your investment.

Best of luck.

Generally, the Bigger Pockets "golden rules" for investing will not work in North Jersey. That's not to say there aren't pockets where you can see more favorable returns, similar to some of the suggestions the folks here have offered.

Essex County has some good opportunities but be wary of the locations when browsing. 

I agree with @Megan Brooks comments. I know people who have succeeded purchasing via those routes.

I've worked with different realtors and lawyers and I've found two things to be true and consistent:

1. Lawyers show little interest in these transactions. I feel like they pencil whip contracts and provide the buyer little-to-no guidance. The attorney review portion of the transaction, in my experience, feels more like a formality, than an attempt to protect my interests.

2. Realtors representing the buyer will do and say pretty much anything to make the deal. Never have I worked with an RE agent who provided an opinion on the house/investment or local market conditions beyond "everything is selling fast".

As you might be able to infer, I haven't had good experiences with either of these parties. While it took some lessons learned (the hard way, similar to what you've experienced) I now know the ropes and know what to expect from these people. Until I find people I can trust and value, I will not depend on them to protect my interests.

Some honest feedback:

-Don't vest all your time in trying to find a "investor friendly" realtor. In most cases you wont be able to build a connection with a realtor who can truly provide value unless you have a track record or a lot of cash. I encourage you to do what it takes to find the properties on your own - may take some more work, but if you know the areas which you listed well enough, you will be able to identify value (deals) without the need of "help".

-Finding a good GC or group of contractors: what i categorize as people I can trust, do good work, at a reasonable price is not easy. Unfortunately trial and error is the only real way of going about this. Now you can hedge your bet by asking for referrals and reading reviews, but it's not that clear cut in this type of work. I wish it was analogous to reading a yelp review, but you wont know if your contractor is good or bad (to be general) until you've worked with them and gotten to know their habits and workmanship.

I don't want you take my comments as a negative outlook because they are not intended to be so. I feel strongly about these topics because they are ones I struggled with myself and are problems I had to overcome through trial and error. These are the difficult learning experiences which will make you a seasoned and stronger investor. 

I wish you the best of luck!

I've had similar questions regarding C/Os. Not to take away from your question or divert the conversation, but I purchased a home from the bank where all certifications responsibilities were placed on the purchaser (me) - I had to get a conditional CO. After renovating it, I was unsure if I needed a C/O. I called the county's engineering department and I was told the same as you: "You only need a C/O for new constructions".

I happily accepted that as I didnt need to take anymore action, however I feel that the guidance I was provided was somehow incorrect.
 

Thank you both for your recommendations. I've been thinking about contacting the universities directly, but navigating through school websites and email addresses is rather a rather daunting task!

I'll do some research today and update you guys if I make progress.

Hello folks.

Recently completed a large purchase and rehab of an three unit building in a downtown area. The units were nicely renovated and are brand new top to bottom. This building is located in a city area with plenty of attractions such as universities (x3), state offices, corporate offices, retail business, restaurants, bars, etc...

We are interested in marketing the rentals towards university professionals (i.e. professors) due to the presumed ease of management it will represent for us (low turnover, moderate-high salaries, presumed care of property, etc...)

My question to you: How do I effectively market these units to the university professionals I am seeking to attract? For those of you wondering, the COVID-19 health crisis has slowed down the process as we haven't had too many inquiries thus far.

It would have been appropriate to look up the subject area before providing negative feedback on the deal. Frankly, I am tired of PA and Midwest investors attacking the NYC/NJ markets because they don't conform to the "Bigger Pockets golden rules" for investing.