All Forum Posts by: Orlando Goodon

I understand Newark CAN be a hassle for newer small investors, due to renter friendly courts and low potential low quality tenants. However the risks are relative to the investor profile as always. So would like your thoughts on mine, being an investor with $40k disposable income.

Here are the basics:

-Looking for 3-4 unit
-I'd live there for at least a year to get 3.5% down mortgage
-I don't need ANY tenants to pay the mortgage
-Tenants paying mortgage just lets me save FASTER for my next property & build reserves for this property(repairs and such)
-I'd be EXTRA careful in screening candidates; especially looking at job history/industry/credit
-My goal/focus is $2000 NET income from 6 units. (ideally 2 triplex or 1 quad & 1 duplex; minimal amount of properties) AND build equity.

So my thoughts are, the reason Newark is not best for new investors, more relates to those with limited funds. For example, if 6 months or even a year of no rent from one of your units would kill you, then it's a bad place for you. However, if you are not so sensitive to the risk of tenants that stop paying is it so bad to invest there?

Also crime is an issue. So I'd say, be careful what parts of Newark you chose. Also invest in the best security systems you can get and do everything else you need to be safe. Good doors. Good lighting.

Finally I'd try my best to incentivize good tenants to stay. End of year on time rent bonus? Reduced rent for direct deposit tenants? Treat them well, as you would a valued client/customer.

Thoughts? Thanks in advance!

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I wonder if there is some kind of online community like this for people in the USVI or maybe Caribbean? Someplace I can speak with many other local landlords. Any ideas?

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Thank you! Gotta love 2020 though. I literally closed the week before my contract ended unexpectedly. So on top of everything else, I'm now an unemployed new home owner with no tenant! :)

We tried to work with Remax but I'm not sure I trust them. I know property management is ripe with a LOT of bad people in the USA, so who knows how it is on the island. They actually discussed $4100/month rent through corporate contracts. So perhaps some of those workers you discussed. A corporation doing work on the island might need housing for several workers. They would stuff 4-5 workers in our house. Charge us $1000/month and charge maybe $3000 every time we get a new tenant. After I asked them some probing questions, they seemed to have gone silent. They also require we spend some maybe $4000 for multiple AC units. So we would be looking at $7000 on top of all the money we just spent on flooring and other work. That might be very close to all our first year profits.

I'm now considering looking for short term rentals too. No reason to completely abandon the original plan. If there are people looking for short terms, I'll provide it. I'm just not very optimistic about that market.

BTW, a lot of the opportunity you mentioned is related to what is happening now. What happens when all the work is done and the contractors leave the island? Will I have trouble finding $3000/month tenants? LOL...I just thought to myself "You mean like I'm having right NOW??". LOL

Originally posted by @Mike Hinton:

Congratulations Orlando!

We’ve been on St Croix since 2016 and experienced 2 bad hurricanes in two weeks in 2017 we never thought we’d see. So be prepared best you can.

With that devastation brought lots of assistance and FEMA and contractors that needed accommodations and thankfully we could happily provide. There are still recovery people around there.

In2016, the bankrupt oil refinery was taken over and is being rebuilt and is about to start production. That has added jobs. Still lots of hurricane recovery work to do but it should be better built for the future.

Lots of cool history there and frozen drinks! If you’re not on island, You need a property manager. Be glad to chat more sometime.

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Originally posted by @Brian Garrett:

All the questions you're asking are things you needed to research and answer before buying the property.

What made you pull the trigger without having any market knowledge and without doing any due diligence prior?

Remember, the point was Air BnB. Covid has killed that. So now my hand is being forced to adjust my business model. What is happening now is unprecedented but we have to get creative and adjust.

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This might be just the pandemic affect but I'm concerned that there might not be enough renters at the $3000/month price point on St. Croix. We need at least $2500 to cover costs. So we are seeking a $500/month cash flow.

The house is a 4 bedroom in a private neighborhood. Half an acre land with some fruit trees. Washer and drier. Thing is, not a lot of high paying jobs on St. Croix I presume. I'm not really sure what the size of the market is there. How many properties are being rented for $3000 or more? Who is living in them?

I keep searching for listings but what I find is limited or inconclusive. They may not be listing properties where I'm looking. Who knows.

Any tips on the best way to get a tenant soon? A GOOD tenant. lol I was to do Air BnB but Covid changed that.

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Sorry I missed your note. Just closed on the house a few weeks ago. Did some flooring work and cabinets. Not getting much responses to our ads. Looking for long term since the covid situation

Originally posted by @Chris Seveney:

@Orlando Goodon

How did this go?

My research is there are only a handful of lenders for the USVI and right now finding rates about 1/4 point higher. Every lender I talked with required 20-25% down payment on the property

As others noted electricity is High, insurance is high and depending on location probably have anywhere from 30-60% occupancy which is a big delta. But one hurricane could crush your prime season as well.

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Hey I was thinking there IS a valid reason to try to get mortgate now. I have not used a lot of credit so my score is low. I been living cash lifestyle. So 2 years ago i realized I needed to establish more credit (had not had loan in years). I got 4 credit cards and have been working my way up. 660 now. So my higher income allows me to qualify better. They say, credit low but income is very high and I think I lose that advantage later if I get 30% pay cut.

So I would not be trying to get something I can't afford but effectively lowering their credit requirements. Credit standards are much higher post covid. I should not be penalized for simply avoiding debt for 80% of my life. However banks just follow their models. I'm not a model. I'm a human with my own unique circumstances.

Keep in mind I would only buy a house where with a tenant I'm paying about the same I've been paying since a long time and even paid while I was out of work on unemployment. Basically I want mortgages close to my rent now for one bedroom. With tenant, it should be no more than about ~$300 for me to live there. Ideally I make $300+ a month, rather than cost me that.

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Thank you so much for the feedback! I will look for some duplexes.

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Based on your reply, I think I was not clear in my question. This is what I'm saying:

1) If I apply now, I'll get approved for 1 million mortgage (was already approved early this year with much lower credit score than I have now)
2) If I apply in a few months, due to income reduction, I'll get approved for much less.
3) So, is there any sensible advantage to applying now while I still qualify for a larger mortgage?

In other words, as a person only interested in rental income, would you ever WANT to be approved for more than the bank would give you? So imagine you have Jedi mind trick skills but can only use it once and on the loan officer. Would it ever make sense to after then say "Approved for $500k", you then say "Yes, you approved me for $700k!" and then they say "Yes, $700k".

Bank approves based on risk to them and therefore you as well as if you can't pay it hurts you too. So I guess I'm really asking if banks are too strict now as for the amount they approve for relative to income or is it just right? If you could talk your bank into approving you for a 30% more expensive home, would you or would you prefer to stick with thier level of risk asceptance?

Originally posted by @Andrew B.:

@Orlando Goodon

You can’t get a $700k mortgage on a house if you’re only buying it for $500k. It doesn’t work like that.

The bank won’t even let you mortgage the whole cost...you have to provide some down payment so they know you have “skin in the game”

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Originally posted by @Andrew B.:

I should say "usually" you can't get a mortgage for the whole cost. The only exception I'm aware of is VA loans

I have navy federal. They approved me for 1 million dollar mortgage. They say they will do 100% financing. Unless I heard them wrong. They dont do FHA anymore due to Covid+

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All Forum Posts by: Orlando Goodon

Orlando Goodon has started 35 posts and replied 123 times.

Post: Investing in NEWARK multi-family for person with $40k disposable

Post: Just closed on St. Croix USVI rental property!! Vacancy fear :(

Post: Just closed on St. Croix USVI rental property!! Vacancy fear :(

Post: Just closed on St. Croix USVI rental property!! Vacancy fear :(

Post: Just closed on St. Croix USVI rental property!! Vacancy fear :(

Post: $300k US Virgin Islands house for Air BnB? Vacancy rate?

Post: Qualify for million dollar mortgage but about to get 30% paycut.

Post: Qualify for million dollar mortgage but about to get 30% paycut.

Post: Qualify for million dollar mortgage but about to get 30% paycut.

Post: Qualify for million dollar mortgage but about to get 30% paycut.