@Patrick Q.
If you don't want PMI, see if you can do a 5% conventional loan instead. These days the PMI (known as MIP for FHA loans) on an FHA loan sticks for the life of the loan or until you refi out. At least with a conventional, you may be able to get rid of it once you reach 80% LTV.
Cash offers will always be tempting for the seller. The only way I've found to counter this is to bid higher. So yes, you'll be paying quite a bit over asking, especially in a hot area like jersey city. Think of it as the cost of entry to get your investing journey started. Make sure it still makes sense for you of course. If you go FHA, the lender will make sure for you, as in, if your rents don't cover your mortgage and then some, you won't qualify for the house.
Also, think strategically about which unit you want to renovate and live in first. I would go for the one that is most run down and in need of repair.
And a word about legacy tenants. If your property comes with tenants, you have one opportunity to ask them to leave: you can ask for some units to be delivered vacant. Ask for the rent roll so you can determine which tenants are good and worth keeping, and which ones are delinquent and should be asked to move out before you take control of the property.
All this is speaking from a personal perspective, I was in your position a few years ago. There's so much I wish I had known and asked about before I started. But as they say, the only way you can do it sometimes is to jump first and figure it out as you go. Good luck!
Thank you for this advice.
I am waiting for the preapproval from one of the finance companies that I have been working with.
My plan then is to sit with them all and ask for suggestions and analyze what they come back to me with.
In terms of preexisting tenants, I like your approach. One of my concerns is with this.
I would prefer to start fresh with new tenants if that makes sense.
Gonna feel that one out as I get closer to pulling the trigger.
Thanks for taking the time to respond.
Best,
P. Quaid.
