All Forum Posts by: Moises Mari

Hi @Chris Montalvo, I recently closed a few wholesale deals, me being on the buy side, the title company I worked with was great.  They were referred to me by a wholesaler that does a lot of deals with them. They definitely seem familiar with the process and also have an attorney they normally like to work with.  Feel free to PM me and I'll be glad to provide their contact info. FYI - They are located in North Jersey.

Hi @Alex Kellman, PM, I have an insurance guy that I have used for all my rental property purchases, he is pretty good and has normally given me the lowest quotes.  Feel free to reach out and I'll forward you his contact info. 

Hi @David Klein, Welcome to Biggerpockets! - I'm an investor from Essex County, so not too far away.  You have many ways to get a loan but the most common ways are the following:

FHA:

This allows you to put the least amount of money down - 3.5%, however, you have to pay Mortgage Insurance, which can be a little pricey, that combined with the higher loan amount because you are only putting 3.5% will increase your monthly mortgage payment. With it being a sellers market and people having a lot of cash floating around, it can get challenging landing a deal because sellers will almost always prefer either cash or a conventional loan over an FHA. I'm not saying it's impossible, we just had a similar situation with a client and we were able to get him under contract, your agent will definitely need to know how to maneuver this issue and find ways to make your offer more enticing, whether is by waving contingencies, offer a higher down payment, etc, not saying these are the best ideas, but just some ideas to ponder.

A few additional pros and cons of an FHA loan is that the appraiser has stricter guidelines, one of them being that they have to point out any health and safety hazard that are present and require them to be fixed prior to closing, which translates to potentially a riskier transaction for the seller. Some benefits are that they obviously require a lower down payment, and lower credit scores are permitted, etc..

CONVENTIONAL:
A conventional loan allows you to put as low as 5% down and go up as high as you want, some banks may allow you to come even lower. The biggest benefit I see for going with a conventional mortgage is the fact that in most cases the Mortgage Insurance drops off after paying down your mortgage balance to 80% of the home's original appraised value. This is not allowed via an FHA loan, in order for you to get rid of the FHA private mortgage you have to refinance your loan.

A few additional pros and cons of a conventional loan is that the mortgage insurance amount can depend on your credit which if you have less than ideal credit this amount can increase. Some benefits are that the loan can cover much higher loan amounts in comparison to an FHA loan which may have county limits, among other things.

Full disclosure, I'm not a mortgage professional, the information I have shared is based on my experience in the market. Please make sure you connect with a qualified mortgage lender that can help you analyze your personal situation. Let me know if you have any questions. Best of luck!

Hi @David Klein! Definitely read up on it, it literally takes approximate 15 minutes to open an LLC. I had to open an LLC yesterday to purchase a new investment property and I timed myself lol. As mentioned here, there is definitely more to just opening one, but the paperwork doesn't take too long to do. The best think you can do is educate yourself on it, and then decide if you want to go ahead and handle it yourself or have the experts do that part, regardless, the education will stay with you forever.

Best of luck!

Hi @Terrence Manderville, I recently closed on a couple of similar transactions and I was really satisfied with the attorney I used as she has extensive experience in these types of transactions. Feel free to PM me and I'll be happy to share her contact info. 

Hi @Karim Kazemi Bidokhti, I recently had to do this on one of my rental properties in Newark, Essex County.  In my case, I went from oil to gas, but I also had to split the system as the entire property was running off one boiler, and to top it off, when splitting the system, I went from steam to hydronic or baseboard heating, which required me to replumb most of the property with new base boards.  

OIL TANK:
To simplify it, it is not mandatory but I would highly suggest removing the oil tank if its underground. The cost for this will vary, but for the most part, most companies charged between $1,500 - $2,000 to remove the tank from underground assuming it's easily accessible to remove.  There may be a potential additional expense which relates to removing the oil and/or water currently in the tank prior to removing the tank. This additional cost runs at about $1 - 2 dollars per gallon in the tank.

BOILER:
Once the tank is removed, you will need to replace the boiler, assuming you are getting it professionally replaced, the cost for this will run you somewhere around $6,000 - $8,000. This will obviously vary depending on the size of the boiler needed to heat whatever areas you need to heat. Since the areas you are currently looking into are somewhat higher end areas, this may increase the cost of the replacement slightly.

This does not account for permit costs, and other small misc expenses. 

Feel free to let me know if you have any additional questions, always glad to help! Best of luck!

Hi @Jonathan Y., just a quick tip about getting work done on a Condo:  Check what the association requires in terms of insurance from the contractors. One of the hard things to work around condos is the fact that you to some extend are at the mercy of the association in charge of that complex.  I had a client not long ago wanting to sell their condo, however, they wanted to do some updates to the kitchen and bathroom before selling. 

They ended up having to cancel their project and decided to sell as is because the association required a lot from an insurance standpoint from the contractors, therefore, my client struggled to find a contractor with sufficient insurance coverage for the association to accept. This may be a good consideration when searching for a condo, as contractors will give you a bid based on the difficulty of the work, as well as the requirements needed to get the job done.

Hi @Chuck Dangar, good to hear that you are taking action!  

There are many ways to do this:  I will share the way I personally do it with my rental portfolio in New Jersey.  

I have a few bank accounts in order to keep things organize. It's easier to keep things organized if you run this as a business from day one.  There are several different type of software that could help you stay organize for little or no cost to you.

But yes, essentially I pay all the bills, including my share/profits on a monthly basis from my operating account and place it on a separate bank account. Technically, that is me getting paid, but normally I don't transfer those funds to my personal savings account till the end of the year, that is just personal preference as I don't need those funds to live the day to day. At that point we use the cash for whatever we desire, but normally is used to continue purchasing more real estate  :D ...  

In a perfect world, you should be allocating some cash for repairs/maintenance/vacancies and capex in order not to have any surprises when something breaks. Good luck and happy investing!

Full Disclosure - I'm not an attorney - Are you purchasing these deals cash? or financing them under your name? LLC financing in many cases is more expensive. Consider looking into umbrella insurance. Just sharing some information I have learned through purchasing my own properties here in Northern NJ. If you still need an attorney, PM me, I have a contact that could advise you more on this.

Hi @Bethany Weinmann, I have an awesome lender I work with, he has helped me with all my deals in Northern New Jersey, he always finds a way or a program that works for whatever the circumstance is. Be careful getting a HELOC or doing anything before talking to a lender because it can affect your ability to purchase or qualify once it is done. Let me know and I can share his contact info. Best of luck!

@Account Closed, awesome to hear you are looking to begin investing! Make sure you talk to a good lender and share your ideas, specially one that is familiar with real estate investing as they can guide you to the best lending strategy to take when trying to purchase more than 1 property.  Let me know and I can also connect you with the lender I work with.