All Forum Posts by: Raymond Y.

@Milan Obradovic I am trying to do BRRRR right now on my first property. I won't be able to pull all of my money out, but I should be able to pull enough out to buy another property. This deal was a little more turnkey, so I wasn't able to force as much appreciation. How did you get interested in Allentown?

@James Smith All of those areas are easy to rent with good growth potential. I would also consider the location of your work as it might be better to take the bus vs. PATH. 

A couple of months ago, I was thinking of househacking around Jersey City or Union City, but I decided to continue renting and invest out of state. It sucks to have to pay rent, but there is an opportunity cost to house hacking. If you purchase a $500k duplex and rent out one side, you will most likely not cash flow or breakeven at best. On the other hand, if you take that money and invest in another market, the cash flow from the investment property should cover your rent in NYC. The downside is that it is out of state, but if you can get over that fear, the numbers would suggest investing out of state.

@Milan Obradovic Favorable landlord laws meaning I am able to kick tenants out in a month if they don't pay rent. So far, I've only been under contract for two properties in my REI career. One needed cosmetic updates and one needed pretty much a full rehab. As long as the numbers worked, I wasn't worried to tackle on a big rehab project.

Rushda Hakim The property I bought should be around a 12 CAP. Depending on the area and condition, I would expect to spend 30-70k per door. Overall, you can easily find properties that meet the 1% rule even on the MLS, but obviously it won’t be in A neighborhoods.

I invest in Allentown due to strong returns and favorable landlord laws. The tenants might not be the best, but the returns, appreciation, and proximity to NYC were the deciding factors for me. Where else can you find an area where every porperty on the MLS meets the 1% rule.

@Rushda Hakim I recently purchased a duplex under your budget in Allentown. Lehigh Valley/Allentown is 1.5-hour drive away from Jersey City and offers great CAP rates. 8-12% depending on your risk tolerance and property values have been appreciating like crazy the past couple of years.

@David Ribardo - Anything else I missed?

Welcome to BP Justin! I live in nearby Jersey City, and I decided to invest in Allentown/Lehigh Valley for higher returns. It is only a 1.5 hour drive away, so if you are ever interested in investing out of state, give me a shout. I am also down to talk about ASC 606 if that is what you are into.

@Kim Herrick I would go back to the seller and do one of the following:

1) Make the seller evict the tenant so you get the property vacant

2) Go back to the seller and ask for a price reduction based on how much you value the time it would take to kick out that tenant. This route might be riskier, but if you have a good PM they should be able to help you evict the tenant.

Depending on your purchase agreement, it might be too late to go back and negotiate, but this situation has definitely changed your numbers a little bit. Doesn't hurt to ask!

I just closed on a property with pretty much the same situation. Initially I was going to kick them out, but after talking to them, I realized they didn’t pay because the previous owners did nothing even though there was no hot water. I told them to catch up on rent and they paid it right away. I am still going to screen them as if they are prospective tenants and if there are no red flags, I will keep them. In your situation, I would talk to the tenants and the seller to find out more info. You can even use this as a bargaining chip to ask for a price reduction.

@Tracey F. I am using a local investor for this property. I thought about managing myself but the drive was a little too far for me.