All Forum Posts by: Steven Clevenger

Quote from @Tim Moore:

Although the profit margins on a fix & flip are high. It's difficult to acquire a  property with enough meat on the bone to make it worth while. Even in a buyers market, Sellers' asking price was unreasonable, but now its out of control. Sellers now are asking for 20 or 30K over market value for their homes. Limited social activity, in-climate weather, Me personally, I don't get the appeal of the area, with limited social activity and in-climate weather, but to each its own. 

Market value is whatever properties are selling for. Since Im buying and holding there are still a lot of reasonable deals around. Though I am considering moving my search to Pittsburg and Philli as those markets are not nearly as "hot" but still post solid rental returns. 

Quote from @Jared Hottle:

Reach out to as many local banks as you can and see if they will fund it. If you have 25% down and it will cash flow based on their debt service ratios I am sure someone will have better terms. It is amazing how much they differ just got to decide what factors are most important to you. Or if there are any value add opportunities including even just raising the rent I would say another option is close with your current situation. Do those value add items and refinance after shopping around for better rates/terms or refinance to the secondary market with a 30 year fixed 

sparing any new financing offers that was my plan, the loan rates aren't ideal but they don't sink the deal either.

Quote from @Tarik Turner:

Will the property be owner occupied or an investment property?

investment. I don't qualify for traditonal investor loans, already tried that with two separate credit unions. This would have to be a bank statement/credit loan based more on the property. It has the potential to generate 2900(on 166k property) in revenues per HUD, I am going to convert it to section 8.

Hello all, 

I was looking to see if the community had any suggestions on non-conventional financing for a home I currently have under contract. I do  have financing secured(bank statement loan) but the terms of the loan changed dramatically from when I was initially pre-approved making it much more expensive an I wanted to see if I could find a better offer. I have good credit, a down payment up to 25% on the property I am looking at and it is currently under contract. PM me with any details/ideas. 

Quote from @Abel Curiel:

Hello @StevenClevenger,

Congratulations on your new opportunity!

Great insight and advice on here from @Jon Schwartz and @Eric Hajdu.

3-4 family units will give you the best opportunity to live rent free. These properties will be in the $1M+ range in most parts of the 5 boroughs. 

Breaking even is also possible in some 2-family properties, especially those with an ADU. While not every deal you look into will allow you to break even, you'll have plenty of house-hack options that will allow you to pay significantly less than you would for a rental unit.

NY can be a tricky market to navigate especially with tenant-friendly laws but there are a few keys that have helped us and our house-hack clients:

1. Do not overprice your rental listing. Trying to max out on potential rental income can lead to little/no inquiries, longer vacancy period AND applications from people who do not qualify or barely qualify. We price our vacant units slightly below market rent to insure that we receive more interest than competing units and can select from the best pool of applicants.

2. Make sure your prospective tenants' net income is 3X the monthly rental amount.

3. Have a 3 step process (i.e. rental application, tenant interview, background/credit check). This will weed out folks who have something to hide and will show their commitment level BEFORE you commit to them.

4. Work with a rental agent or investor-friendly agent who can help you navigate current rental conditions while keeping your long-term goals in mind.

Lastly... with respect to location:  

The "Outer Boroughs" or boroughs outside of Manhattan will be your best targets. Brooklyn is most attractive because of its proximity to Manhattan, access to public transportation, restaurants, and other attractions. Queens is a great middle ground between city and suburbs, has a lot of transportation options and has a lower average home value than BK and Manhattan. The Bronx is the 'next borough' to gentrify and has seen a ton of new development and interest from investors who do not want to pay BK and Queens prices. 

All the best to you on your search!

Abel

I may end up going this route. As it stands right now it may be easier for me to qualify for a physician loan than a investor loan. Notably physician loans can be up to much higher amounts than my current income since the programs run under the assumption of a dramatically increased income post-residency. I could realistically save 100,000 before I move to NYC so ill be in touch if I decide to go this route. 

Quote from @Lloyd Preece:

Hey Steven, i went on this same mission 18 months ago. I agree with Jon's comment about a successful House Hack not needing to be a break-even. In NYC you could easily be paying north of $2000 on rent for a mere bedroom, so getting your monthly housing cost to under 4 digits is a huge win. I found that LI/Brooklyn/Queens neighborhoods where househacking multifams was possible seemed to be too far for my commute to midtown Manhattan (generally around 1 hour from south/east BK/Queens). In the end I looked to Hudson County in NJ which had much lower door-to-door commutes and more HH opportunities. I ended up going for a $340K 2 bedroom condo in Weehawken (10-15mins to Times Square) with 10% down which resulted in a $2k housing payment. Market rent for 1 of those 2 bedrooms is $1000-1200, so you do the maths!

 You know I was looking at the condo options all around manhattan and brooklyn but they are all COOP which comes with significant rules attached. How did you navigate that issue? I will also be working out in Queens when I move in June so I have no issues doing it outside mahatten or even into long island a bit

Hello all,

I have been having trouble acquiring a investor loan line of credit to acquire my second property. My credit score is good(750) and I have enough for 25% down on a 250K home(which is the price point I am looking around). The trouble seems to be 3-fold.

1)I sublease the rooms in my primary residence and it covers my mortgage + ~$500 a month, so overall an excellent cashflow and I have had zero vacancies in the 18 months I have owned the home. Thus far lenders have said this income "doesn't qualify" even though If I rented the entire home it would.(seems arbitrary and stupid)

2)My primary income is ~60k salary income but I have contractor based income that amounts to about another $4000 a month(I understand that I can't count this per se as its variable and less than 2 years for the contractor income) 

3)I have medical school loans that are currently in deferment, I am on the 10 year IBR so my loan balance will be forgiven tax free in 6 more years. Though they are currently in COVID deferment I acquired a letter from my loan servicer indicating if I did put the loans into repayment it would only be ~$300 a month. However the one underwriter I worked with thus far insisted on counting 0.5% of the loan balance per month against my income in spite of having assurance from my loan processer and this is in no way reflective of the reality of my loan situation. 

My question is how do investors get around these issues? As I understand it most real estate investors have loads of debt and income that is not salaried. Am I just asking for money from the wrong mortgage underwriter? 

Yes you have a point, however I was asking peoples opinions who have experience in NYC, not LA. The taxes and housing rules are completely different in Los Angeles, to the favor of house hacking. The Northeast is rather notorious for having both high property taxes and extensive regulations, thus given this headache I am setting a high standard because I can still throw my money back in the midwest and manage properties remotely. 

I don't. I rent rooms for ~650 a month on average. If you can't even clear 2000 a month I probably don't want to rent to you. Most my tenants are young professionals trying to save money and make 5-6x what I ask. 

Hello all, 

I am not a new landlord but professional opportunities have me moving away from the Midwest to NYC. I am wondering if it is even possible to house-hack effectively in NYC or LI? I would be happy to break even(live rent free) given the market. I have been house-hacking for the last few years in the midwest and it was an absolute gamechanger in terms of my finances after years of renting in Los Angeles. Do any of you have experience in this market. Thanks!