All Forum Posts by: Daniel Boufford

Zillow / Trulia / Streeteasy.

You'll need 20% down on an investment property. You should be able to get 80% financing for something like this. Go for it!

Mauricio, I think most of these posts are too conservative but I also think this is just an OK deal for Hudson County. I'm shrugging my shoulders, the numbers are average and you are definitely on the receiving end of a flip. That said, if you need to do an FHA loan, it's going to be hard to compete with other buyers (many of them cash buyers) on the good deals, so you may have to overpay slightly to get in the game.

The estimates for capEx, vacancy, and repairs are way too conservative. Using those assumptions, and considering you're living in one of the two units, there's no way you'll cash flow on anything in Hudson County.

Also, the posters here are not considering appreciation. The lower cap rates in Hudson County are because of anticipated growth. Manhattan has even worse numbers...impossible to cash flow without 50% down. Are those all bad investments? Of course not. Lower cap rate = easier more turn key investment + appreciation. Higher cap rate = more problem tenants, more repairs, less appreciation. 

I don't think you'll be in bad shape with this investment but make sure you have some cash for emergency repairs. If your'e using every last dime saved as your FHA down payment, I'd wait.

You should be able to for sure. I have a good lender I can put you in touch with. I just refinanced my JC condo with him.

PM me for his contact info!

Hello,

I'm seeking a HELOC for my condo and was wondering if anyone had recommendations for banks. I just spoke with Bank of America and it sounds like it will be a slog, like 8 weeks to close on it. Was hoping to close faster and I also wanted to compare rates as well.

Home value - $675,000

Mortgage $385,000

Want as large a HELOC as I can get. BoA has an 80% LTV max, but would rather use another lender if they can do 85% or 90% (doubtful).

Any suggestions appreciated.

Thanks

If you are caught there is a penalty of six months of rent maximum. You are unlikely to get caught and the city governements don't really care. There are thousands of these apartments in Hudson and Essex county and there simply isn't enough manpower to enforce them all and it may even be against their interests to do so. 

It's definitely worth it to rent out the bonus apartments. There's no chance you get hit with a massive find in the 10s of thousands or anything devastating. Even if you're caught, you cough up like $5K and then find another tenant, or just stop renting it out and you're back to where you were.

Try Bayonne Community Bank they leant 75% to me and a partner purchasing as an LLC for a five-family in Bayonne. You can PM me and I'll send you loan officer's contact info.

I view these two areas the opposite way. Hoboken is more of an appreciation play and JSQ is more of a cash flow play. Hoboken/downtown JC is similar to Manhattan and Brooklyn, where cap rates are crazy low at about 3-5%. This is because there is anticipated growth and strong historical growth in these areas.

Both of these properties have terrible cash-on-cash returns, probably because you're putting down 35%. If you can put less down, I would. As others mentioned, it can easily swing into the negative with margins this thin.

If you're not getting AT LEAST 10% cash on cash you're doing something wrong.  Personally I think JSQ is already expensive because the anticipated growth of the area is already fully built-in to the price. That said, if you can find something with good cash flow there and walkable to JSQ it should be a solid investment. 

I see the area immediately around the JSQ path appreciating healthily long term, but a lot of deals that claim to be "Journal Square" are like a 20 minute walk to the path. Thinking that these rents are going to skyrocket is very optimistic. There is literally no nice retail at all in JSQ as is, and it will only come in after the mega projects are completed.

Yes, three days is the standard period for attorney review and it is definitely enough time as it's typically a boilerplate contract with few alterations. Your buyer's attorney will often have a contract rider where most of the changes are done. 

Ah ok, well the nicer parts of Newark are more like an 8% cap rate. But as mentioned earlier in the thread, if that's the type of cap rate you're looking for I'd much rather focus on Jersey City close to light rail stops or Bayonne NJ, because those areas have added growth potential that Newark does not, in my opinion.