All Forum Posts by: Robert McCormick

I'm looking to purchase my first property in the very near future. (Duplex househack in North Jersey) I have 5% of the purchase price saved up + enough for closing costs, immediate repairs and reserves (roughly 5 months PITI).

Since the market is so competitive right now I was considering getting funds gifted from a family member, to increase my down payment (an extra 10% to get to 15% combined down) so that my offer would be more competitive. My questions are:

1. Is there a certain amount of time the funds need to be sitting in my account in order to use them towards a down payment?

2. What is the seasoning time period needed for funds in the donor's account?

3. Do these amounts of time vary from Conventional vs FHA?

I appreciate any help that can be offered!

-Rob

@Shanti S. I was stating I would be ok with a 25% loss in general as far as my risk tolerance goes. My brokerage account is currently run by a robo advisor so it's my understanding it automatically rebalances my portfolio for me so I don't need to worry about adding stop losses for specific securities, ETFs etc. It will automatically sell once each ETF falls below a certain threshold and will reinvest for me.

I plan on keeping the expenses in a checking as well, but the 7.4% APR sounds awesome. I just sent you a DM about the 7.4% for more info.

I'll look into continuously rolling over the money in a 30-day CD, I've never thought of that before. If the CD rates don't look sufficient I'll most likely keep it in the brokerage account then. It's reassuring though to know that it's not uncommon for others to stash their reserves in a brokerage account. I appreciate the input @Brad Hammond 

I've recently reached my savings goal and am ready to purchase a property in the near future. I currently have funds saved up for a 5% down payment, closing costs, and some small repairs right out of the gate. These are saved in my checking account so the cash is immediately available. 

I also have around 5-6 months in potential mortgage payments saved in a brokerage account run by a robo advisor in case of long term vacancies or any larger major repairs are needed. 

My question is, since I'm about ready to purchase, would you recommend pulling my money out of the brokerage account and into a checking account so that it is readily available and doesn't risk fluctuating in value? Or since the money in the brokerage account is just for emergencies, should I just leave it in there to allow it to potentially grow, further padding my reserves overtime? 

(It's worth noting I do have other personal cash reserves and even if my brokerage account would fall 25% in value short term, this wouldn't be too big of a blow)

Thanks!

I have recently considered pursuing a side hustle of becoming a Notary Loan Signing Agent as a means of extra cash for building up my reserves. I have considered paying a couple of hundred dollars for a training course and receiving a certification, but before I did I, was curious if anyone who is currently a LSA can speak to this.

Do you need coursework/a certification to get started?

Building on that, which courses do you recommend? (I was considering the "Loan Signing System" by Mark Wills)

Overall, would you say it is something worth pursuing and the ends justify the means? Or do the low barriers of entry make this more competitive then it seems?

I appreciate any help, anyone can offer. (I am also located in North Jersey)

Hi @Mark F.,

I'll have to checkout his meetups. 

It's good to know you were able to start without a mentor right off the bat, I thought it was almost one of those unwritten rules that you almost "have" to have one before diving in. You're also not the first person to tell me to be patient and not jump in right away, so I can definitely sense a lot of truth in that. Thanks for sharing and I plan on continuing to be a sponge, soaking up knowledge.

Thanks!

Hi @Larry S.,

It was just an oversight. I would be open to investing in Hudson county, my only drawback is I figured the closer to NYC, the more expensive property values seem to be, aside from rougher neighborhoods. I'm not sure I could afford the more expensive housing there.I do like the close proximity to transit lines though. However, they go all over North Jersey so I haven't really locked down too many towns in particular. I plan on using one of the lower down payment options 3.5-5% as well but whether it's FHA or a conventional first time home buyer loan, I'm still researching that.

I went to a few in person meetups prior to Covid as well and found them very useful, but then things shut down right as I was starting to get comfortable in them. (of course) Do you know of any/have any recommendations for virtual meetups in North NJ currently running?

Yeah, I've noticed after analyzing a bunch of deals over the past couple of months that the rules of thumb didn't seem to be too realistic around this area. It's comforting to know after hearing from you that lack of cashflow while living in the house is normal for the area. That definitely puts my mind at ease so far. Thanks for sharing, it's helpful to hear of people who have successfully used this strategy in this area.

I plan on owning my first duplex this upcoming year (2021) to househack as my first investment property and was hoping to get in touch with people who have been successful using this strategy in Northern New Jersey. I know the area has a high cost of living compared to most markets since I've lived here the majority of my life but I'm curious how others were able to do it successfully. Specifically, I'm curious...

How did you decide on a particular market?

How did you finance your deal?

Did you find a mentor before diving in? If so, how did you find one?

If anyone wants to add anything feel free. I would just really like to tap into the local resources to better prepare myself for the upcoming investment.

Cheers!

Counties: (Morris, Warren, Sussex, Passaic, Bergen, Essex, Union, Somerset, Hunterdon)

@Jonathan Greene Hi Jonathan, Alternatively to my original post above, where I could house hack a single family residence and rent out the rooms...Would it make more sense to buy a SFR, live in it myself for a year, then move it out and rent it out fully to a family at full price once I reside somewhere else? Or does my ability to qualify for a mortgage for this type of situation decrease significantly while also increasing competition with other homebuyers?

@Ethan Perry Thanks for the advice Ethan. I've had my sights set on getting my first property for almost a year now and it feels reassuring hearing you tell me to stick to the plan. I agree with getting our feet wet before totally jumping in head first. I think it may be premature to form a long term partnership, but I' m open to pivot if it makes sense.

I've considered switching to other properties and expanding my criteria, so I'll keep that option open as well. Congrats on the first property! Especially at turbulent times such as this, that's definitely something to be proud of man.