All Forum Posts by: Natalie Schanne

@Davon Johnson - the deal I talked about was listed on MLS but the person offered all cash, "as is," fast closing.

@Davon Johnson - you can pull off cash out refinances in any market. You will be looking for a property where the deal is so good that in 6-12 months, you are all in for 65-70% of its current value.

In New Jersey this might look like buy a four unit for $500k with owner occupied loan, 15% down 3.25% loan (or even fha at 3.5% down but you are likely to overpay to a seller for a fha loan), rehab for 100k, property appraises for $860k after renovations and rent increases. So if you did a 75% LTV cash out refi with closing costs, you can pull out $600k you have into it (fully repaying the 200k cash). Airbnb or furnished rentals can increase your cash returns. Almost all banks will want to see a 12 mo lease and rental history before financing you. (Unless your w2 is so good the property income doesn't matter for the loan).

Case in point, friend bought a duplex in New Jersey for $250k in May 2021 and looking to cash out refi at a 350k value or higher now. $350k x .75 cash out is 262.5k. Minus closing costs for the loan, new title insurance. Mortgage will be like $2200/mo and rent is $4200/mo and there will be effectively no $$ left into the property. This is a quintessential BRRR. Some large investors have been able to do this with large multifamily properties.

@Dyllon Gibbs - pros - can rent to people working or volunteering at the church, probably some wide open space, May look neat if it’s an architecturally interesting church

Cons - churches have been failing - may be prone to blight or redevelopment. Excess cars and human traffic. (More likely someone would call code enforcement for not clearing sidewalk snow?) Any additional noise, trash, traffic or parking issues likely?

@Brittany C Spragins - another vote here for starting with a real estate agent (or interviewing several before picking one). BiggerPockets has an excellent agent finder tool and also your local REIAs are likely to have agents who “get it”. 90%+ of agents do not invest in rentals and are trained in rapport and door opening more than helping you get a good deal.

The top agents in your area also know which lenders communicate well, perform, and give good rates. My current top recommendation comes from a local bank that offers rates that nobody else beats every time I’ve had a buyer compare them with any other firm. Or alternatively your agent can connect you with a lender that offers a special product like a rehab loan (not all do) or is better with underwriting self employed individuals. Some clients need more hand holding and pick up my phone call asap type service. (Versus a website like Better where you upload all your docs and someone remotely checks them and sends you requests for more docs).

@Eric Chludzinski - Welcome Eric! House hacking is a great way to build wealth. Most of the 2-4 units in the area are older homes (think 1960 or older), however they provide great opportunities in terms of getting a 3% 30 year loan on a property that can be an investment after you move out after one year

@Alexander Hartwell - my vote is to stay in new jersey, within 20 mins of your other property and buy another 3-4 unit with a homeowner occupant loan to house hack. You can do this every year until you have a good portfolio with 3% 30 year fixed loans. Airbnb income in New Jersey is very strong because the incomes are high. I’d rather take a property down the street where I can tweak the revenue and expense levers than an out of state property where I need to trust that the property manager is putting in good tenants and I am not subject to getting oversized “automatically authorized” charges like replacing a $100 toilet for $500. Your mileage may vary. I believe buying larger scale (100+ units) professionally managed units is ok out of state, but below 50 units should belong to local investors imo. I think out of state investors are more likely to overpay.

@Ryan Bogrow - Welcome to the Piscataway NJ area. Definitely connect with other local investors at the meetups / reia events so you can learn from other people’s successes. I don’t know if you already bought your home, but house hacking is a great way to snowball your wealth. I’ve been very successful with Airbnb in New Jersey as well, because the incomes here are high, so the furnished apartment and room rentals $$ are also high. Wish you the best of luck!

@Jon D. - If you’re savvy and don’t need full pro representation your choices are:

1. Get a real estate license and hang your license with the agency that’s best for you (a flat fee broker might charge $1200/year in fees plus $625 a deal and you otherwise keep 100% of all commissions). I believe you get more insights from other agents as a party to the transaction. (From their tone, how strong are the other offers?)

2. Marry or date or get a business partner with a license

3. Negotiate the buyer agency rebate (as allowed by law) and write letters like an attorney would and stick to your ideas. In New Jersey, the lawyer sends the repairs requests to the other lawyer, and each lawyer discusses with the client. The real estate agent can work to smooth over the negotiations - ok what things are really important to you that we repair vs give credit for, but if you don’t ask them to engage especially if you feel like they’re working against you like by acting like your requests are unreasonable, then you should ask them to Forward the written requests. Then stick to your plans and walk away if no negotiated settlement can be reached.

@Rigoberto Torres Meza - I learned 100x more by jumping in and doing my first deal (bought a foreclosure). Until you own a rental property (or house hack), almost all of the education doesn't hit home. You don't have the foundation. You don't retain it. Whereas, if you join a mentorship program while you have already started your business, you can make a savvier choice about what mentorship and you will ask better questions and retain more information and solve real life problems. You have no idea how many people who don't do any deals get worked up over LLC questions. Should I make my LLC and hire my cpa and bookkeeper and stuff now before I have any business at all? I personally don't believe you can retain very much before you own something or you're actively taking action along with a peer group. There are many tiers of "training". You have awesome free YouTube channels like Pace Morby, Brent Daniels, Zach Ginn flip with Rick. (The former two have paid masterminds). You have inexpensive reia (like Ohio Coree) and meetup live events and zoom calls. (Under $250/year). You have misc guru courses in the $1000ish price point like Vena Jones Cox who is excellent. And then you have the $10k+ courses where someone like Ron Legrand or Tarek el Moussa or robert kiyosaki or whatever has licensed their name to some guru white label training and paid salesmen exist to convince you that YOU'RE WORTH the investment, you should invest in yourself, if you do ONE deal then it will pay for itself, you NEED coaching little newbie so you won't lose money, etc. I don't trust any coaching course that's convincing me to learn how to increase my credit limits so I can buy their class and selling dreams of grandeur.

Ultimately I think the best investment is connecting with local investors through meetup, connecting with an investor savvy realtor through BiggerPockets or the reia, and buying SOMETHING. After you have your first one, you’ll understand, ask better questions, and learn the right way to go. Even the “smart” investors who should know better get schooled when contractors steal our money.

I subscribed to a 15,000 per year mastermind and it’s worth every penny to me. But that’s because I’m surrounded by people who are go-givers, who are walking alongside me doing the same activities, and who will answer my questions as I have the problems I experience because I’m trying and failing and trying again. There’s nothing like being surrounded by your TRIBE. I will say the people in these groups who are not out there making offers, flipping homes, dealing with problems, are on the periphery and don’t seem to be making much progress. Whereas the people who were in motion are accelerated by surrounding themselves by other people in motion at a higher level. The reias are often populated by sweet investors with very few properties (under 10) and the people who are doing big big things in your area aren’t the same ones at each meeting.

@Yuhei Kato - I have a property where the area under a tree is incapable of growing anything but moss. I had some creeping vines - periwinkle but they got destroyed by the guy who mows the yard even though I told him not to mow the periwinkle area under the tree. Now I’ve got dirt and the odd fast growing tall weed during the spring instead of lush green that was low ground cover and blocked all the weeds.

One of the landlords in my town put fake green grass on his lawn so he’d not have to maintain it besides hosing it down. It looks kind of like green carpet.

I found out when I tried to stick an open house sign directional on his corner.