All Forum Posts by: Ryan Goldfarb

@Coretta Johnson - Search the MLS nearby for SOLD comps -- similar size, location, and condition. Make sure it's priced properly.

Find out who bought similar properties in need of rehab in that area. There's a good chance they're an investor. Reach out to those buyers, and present your deal as another opportunity. If it still doesn't tell, they may be able to tell you why.

There is no better way to set yourself up for success than to start young. Remember to play the long game; shortcuts aren't worth it if they jeopardize your long-term vision.

Regarding your questions:

1. Impossible to say as it varies greatly, but your cost per SF will be higher in this part of the country than most others (higher labor costs due to high cost-of-living, etc.). The nature of the building will also dictate your costs -- a 2-story, 2-family home will have a different cost structure than a 16-story high-rise apartment building (which requires a different type of construction, elevators, etc.). For hard costs (note that this doesn't include soft costs) on a no-frills 2-family on a standard lot in a place like Newark, your starting point could be somewhere in the $150-200/SF range. Again, note that this doesn't account for the cost of the land, soft costs, site cleanup, or anything out of the ordinary that may pertain to a specific deal.
2. As was mentioned above, property taxes are public record. If you're developing, your tax assessment will change post-construction, which will, in all likelihood, increase your tax bill.
3. If you're seeking a loan for development (i.e., new construction), a bank will look at your loan as a commercial mortgage rather than a residential mortgage. As such, your credit score won't affect the pricing or terms of the loan all that much, though it still behooves you to keep your credit strong as banks will scrutinize your deal harder without good credit. The LTV will depend on whether you own the land or are seeking a loan to purchase that as well. Commercial lenders will have different loan programs with different terms. Rates will vary a lot, too, and your options will depend on the economic climate (for example, your financing options as a developer are vastly different today in 2016 than they were in 2008-2009). Nowadays, if you own the land, you can typically find a lender who will loan 70-75% of the construction costs, sometimes on an interest-only basis. YMMV here.
4. (Not all real estate related) Rich Dad, Poor Dad, The Millionaire Real Estate Investor, The ABC's of Real Estate Investing. J Scott's books (search Amazon for them). There are many good ones.

Hey @Sant S. - shoot me a PM, and I'll connect you with a local lender who may be able to help. 

Welcome @Jack OConnell!

Hi, all--

I'm exploring an opportunity on a 2-family property where most of the value is tied to the land. It's an oversized lot adjacent to a parcel zoned for high-density residential.

My goal is to acquire both lots and begin the entitlement process for a larger development.

Now for my question... If the lots are combined but fall within different zones, does one zoning designation take priority over the other? Obviously I'd prefer to leverage the high-density designation over the lower-density one, but is there any norm for how a zoning board will rule on this?

Thanks in advance!

@Michael Wolffs - Most banks sell off their loans with a Fannie/Freddie guarantee. On residential deals, I believe it's a Fannie/Freddie requirement that the loan is in the name of an individual rather than an LLC.

More than likely, if you find a lender willing to lend directly to an LLC, they're lending off of their balance sheet rather than planning to sell the paper after funding of the loan. Fannie/Freddie loans are easy for banks to unload off their books. By boosting the liquidity for the lenders, this acts as a subsidy on the loans to keep rates a bit lower compared to traditional commercial loans.

Sorry to hijack the thread, but how has the process been with the city to legitimize the conversion?

Welcome, @Paul Baek!

@Joseph Berdugo - 

Disclaimer: I'm in no way a zoning expert, but I've read my share of zoning reports and requirements.

Legal non-conforming is pretty common around here, given the historic nature of most development in Jersey City. Most of the city was developed prior to modern zoning standards.

Do you happen to know the grounds on which the structure is non-conforming?

In Jersey City, R-1 is the designation for 1- and 2-family structures. (R-1A and R-1F also exist.) R-2 is the designation for multifamily up to four stories, which can allow for more than two units.

The reason for my question above is that nonconformance can vary in nature. While I'm not sure whether or not an appraiser would take this into account -- which may be what @Darren Sager is insinuating -- technically speaking, a property can be nonconforming based on a variety of characteristics:

• Use -- think commercial vs. residential OR single-family vs. multi-family
• Setbacks -- if that zoning district requires a minimum setback of 10 feet from the property line on either side, and one side is only 5 feet from the property line, that can be grounds for nonconformance
• Parking -- the property may not meet the minimum parking requirement for its zoning
• Lot Coverage
• Building Height
• Density

My point is, various factors can trigger nonconformance. Again, disclaimer -- I'm not an expert -- but if your intent is to keep this as a 2-family dwelling, you should be safe based on your legal nonconforming status.

Another element to this is the rebuildability. Where this comes into play is in the event of significant destruction to the property (i.e., fire). Not sure what JC's stance on this is, but municipalities typically have a threshold at which point the property can be rebuilt to its prior existence regardless of nonconformance. In some places, even if the property is completely destroyed (100% loss), the building can be rebuilt to what it was previously even if the structure was previously nonconforming. In others, you may only be permitted to do so if the damage sustained is considered less then a 50% (or 75%) loss. If the damage eclipses this threshold, the property must be rebuilt to today's zoning requirements.

Lastly, while zoning requirements are requirements, it's not unheard of to receive a variance. For example, if you had unfinished ground level space at your property and are sitting on a large lot in an area where 3- and 4-family properties are prevalent, the zoning board may consider a variance to allow you to add another dwelling, provided you adhere to certain additional requirements (providing sufficient points of egress, adding a sprinkler system, etc.). Know that this will be time intensive and expensive, and I would not buy anything with the assumption that you'll be granted a variance. Could be a nice bonus if you're willing to put forth the effort, though.

If you have any other questions, I'm happy to take a stab at them. Don't hesitate to reach out to the city's zoning office either; they can be helpful.

The biggest difference is if it's a walk-up vs. amenitized luxury high-rise. I'm on the 3rd floor of a walk-up in a 2-BR, probably comparable size. It's not brand new but has SS appliances, granite, and in unit W/D for $2,600. Proximity to the PATH is nice, too.

I'm a block or so from @Gerold Koch at 70 Columbus and the rents vary drastically, though his building is newer with far more amenities.

My landlord lives in the building has a preference for tenants he can deal with easily, so market rent on our place is probably closer to $2,700 or $2,800.