All Forum Posts by: Ryan H.

@Daniel Green I would use $150/SF to ballpark the cost of second floor add-a-level.  So a 1,000 SF second floor may cost you +/- $150k.  Of course, all the standard caveats apply, e.g., the cost will depend on finishes and materials, etc., but I find $150/SF to be a good estimate for purposes of a quick "back of the envelope" analysis.

@Michael Lee I am interested to understand your strategy.  Did you renovate the property during the term of the lease, but prior to exercising your option to purchase?  If so, how did you get comfortable with the idea of renovating a leased premises?  Was it because the option to purchase grants you the legal right to purchase the property?

In a sense, the arrangement here seems like a different version of seller financing in that seller continues to own the property for a period of time during which you pay the landlord lease payments while you renovate the property.

@Account Closed I'm not in SOCAL, so my numbers are different, but I typically look at my profit margin as a percentage of the actual cash I have to put into the deal.  For example, on my current flip project, which is a cash deal with no financing, I have acquisition costs, holding costs and rehab costs -- all of which require actual cash outlay.  I do not include the disposition costs (e.g., broker commissions, transfer taxes, etc.) because these costs get paid out of the purchase price at closing and, therefor, do not require additional cash outlay.

I’ve been focused on fix and flips in Bergen County. It has been challenging to find good deals, but not impossible.

As for buy and hold, I rarely (if ever) come across Bergen County properties that meet my cash flow and ROI requirements for a buy and hold property.

@Gal Alberman Your post lists the total annual income as being $42,800, but I think perhaps you meant that the total is $52,800.  If so, you may want to edit your original post to correct this.

You have a $2,000 expense listed for a "super."  Can you elaborate on what this is for?

With NOI of $25,940 an 8% cap rate would suggest an offer of $324,250 (without taking into account the deferred maintenance of $15,000 you mentioned.)

I think the question is whether the market in Irvington supports an 8% cap rate.

I'm not sure what the rule is under New Jersey law, but either way I would make sure that the real estate contract expressly states what is going to happen with the security deposit so that there is no misunderstanding between buyer and seller.

@Jonathan Partsch I would go with a big (i.e., wide and deep) single basin sink as it will look more high-end to a potential purchaser than a double basin or offset basin -- especially in a small-ish kitchen.  Cost for any of the sink options should be more or less similar.

@Amul Sutaria Yes it is available. I just PM’d you. 

144 Paterson Avenue, Midland Park, NJ (Bergen County)

3bd/2ba, 1500sqft, on oversized deep lot

>>>>>>>>>>>>>>>>>>>>>>

Summary:

Buy: $325,000
Rehab: $80,000
ARV: $500,000

>>>>>>>>>>>>>>>>>>>>>>

Details:

$325,000 (Buy)
$80,000   (Rehab)
$6,800     (Carry)

-------------
$411,800 (Total Cost)

>>>>>>>>>>>>>>>>>>>>>>

$500,000 (Sell)
-$25,000  (Realtor Fees)
-$4,9575  (Closing Costs)
---------------
$470,425 (Total Sale Proceeds)

>>>>>>>>>>>>>>>>>>>>

$58,625 Total Profit
14.24% Return on Investment
>>>>>>>>>>>>>>>>>>>>

NOTE 1: Seller makes no guaranties about the estimated rehab costs or ARV. Buyer should not rely on seller's estimates. Buyer is responsible for conducting their own due diligence and forming their own conclusions as to estimated rehab costs and ARV.

NOTE 2: No realtors please. Seller does not need assistance selling the property. Seller is seeking to sell directly to another flipper/rehabber.

NOTE 3: Seller will schedule showings of the property only with documented proof of funds.

On a humorous note, and I hope everyone can take this comment with the playful jest it is intended...

As a licensed attorney I always chuckle when licensed real estate brokers get bent out of shape about wholesalers brokering real estate without a license.  This is a bit of the proverbial "pot calling the kettle black."  Ask any NJ attorney and they will tell you that it is real estate brokers that are the ones practicing law without a license (in preparing contracts of sale)!  It's true!  Look it up.  In 1982, the NJ State Bar Association sued the NJ Association of Realtors.  It went all the way to the NJ Supreme Court.  The Court held that, in fact, the realtors were engaged in the unlicensed practice of law by preparing real estate contracts.  A special accommodation was reached to allow NJ realtors to prepare these contract, but only if they parties had a right to have the contract reviewed by a licensed attorney.  That's why every standard form real estate contract in NJ includes a three day attorney review period.