All Forum Posts by: Ro Maga

I understand that you have two options if you come under budget or say, you didn't touch your contingency funds: (1) the balance can be applied towards your principal, or (2) you can use the monies towards additional improvements above beyond those outlined in the loan application.

@Jerry Padilla It's really awesome to have someone with your knowledge engaging so generously in these forums. I've read several of your posts, and I always learn or understand something better. Thank you!

A newbie meet up -- awesome! I'm interested. Keep me in the loop.

A friend in Jersey City sold his place last month through a Redfin-affiliated agent. I believe he paid 4% and had a great experience. His place was on the market for less than a week.

Well, speaking more as an academic than as the newbie investor that I am, I am not sure anybody really thinks Newark is "a bomb waiting to explode." The image that comes to mind is that of the riots, and that seems so very far fetched today despite everything that's taking place. Chatting with urban planners and researchers, the consensus is that the worst that can happen to Newark is nothing, and that the status quo would remain. It is no secret that Newark is rundown, that the violence in some areas is beyond tolerable (just look at all the shootings this week), and yes, it is going to take  lot to bring the city back.  Yet there is SO much happening in Newark. It is no secret either that a ton of investment and development both public and private is taking place in the city and along this (transit) corridor. (And yes, it's going to take a lot more, but if we were looking for places that are already fully developed we would be talking about Hoboken and the likes, and where is the opportunity in that?). The thing with development is that it is strategically uneven. So, investing in Newark requires doing one's homework diligently, and, as @Ibrahim Hughes stresses, that it it also requires investing in its people.  And this latter part is what ought to keep investors looking for an easier buck away. 

For a 203k, you may want to reach out to the folks from Annie Mac in Mt. Laurel, NJ. They are BP-friendly and they service renovation loans in various states including Jersey. We had a great, very informative conversation with them.  

@Jasmine Cotes , I still think your best bet is reaching out to mortgage brokers and spent some time loan shopping -- it's a great way to learn too. My husband and I looked into doing something similar to what you want to do, except we were moving from a condo to a duplex and moving to another city because of work. Because we wanted to keep the condo, the first mortgage broker we talked to would only offer us investment loans requiring 20-25% and 6 months PITI reserves for both our old condo and the new house plus we needed funds for closing. In other words to finance a modest $150k duplex, we needed to have close to $70k in the bank. This despite of having excellent credit, solid jobs, and some money saved -- alas not $70k.

We kept saving and then we talked to a few other mortgage brokers including a couple who specialized in FHA 203K loans. While brokers cannot bend underwriting requirements, your broker should be able to help you understand what you need to do to meet qualifications and find a lender/loan that better matches your situation.

Among these other brokers and lenders (do talk to your local bank!) we found loans with better terms including 203k loans As OOs, they required 3.5% down, PITI reserves for both properties between 3-6 months, and included the possibility of rolling closing costs into the loan. These loans involved PMI, but that was balanced by a lower interest rate and a much lower cash-in amount than the investment loan. Mind you, we still needed a substantial amount to pull this off (its Jersey after all), but it sure was a far cry from $70k.

Again, reach out to mortgage brokers and explain your situation clearly, and whatever you do, I'd strongly advise you refrain from using any language that even hints at breaking the rules or finding loopholes or "work-arounds." In fact, if you come across a broker that promises to fit you into loan for which you don't legitimately qualify, RUN! Somebody who thinks they can cheat the feds and the banks won't think twice about cheating you.  

I am no expert, but from the way you are phrasing your questions, it sounds to me like you still have plenty of work to do in the learning and research stage. Knowing a little bit more about this will help you realize why saying things like the "possibility to make that illegal action into a legal option" rings alarms to everyone.  

Sit down with a mortgage broker just to learn about loan products first. Explain your situations in full and figure out what loans may be available to you and their specific requirements. You should also be reading about financing (by which I mean books, not forum posts).

Wait, can you house hack repeatedly in the same area with an FHA loan? My understanding was that you have to either be a first time home owner or have justifiable reasons as to why you need to move homes like family or job location changes. Am I missing something?

Originally posted by @Account Closed:

@Richard Francois Im sorry, but what does their being Jewish have to do with anything?! Seems like an unnecessary tidbit of information that doesn't need to be in your post, or in any post for that matter. 

 If I didn't know Jersey has pockets of very close-knit traditional Orthodox Jewish communities that have very specific cultural practices, it'd be easier to agree with  Lloyd.   That said, I think the OP was simply stating that being able to strike a good deal with people who follow very distinct cultural traditions in all aspects of their lives -- including business -- requires knowing enough about that culture.