All Forum Posts by: Andrew Rodriguez

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $760,000
Cash invested: $35,000

House-hacking a new construction two-family home in northern NJ just outside New York City. Used FHA loan to purchase, will re-fi as soon as possible to get rid of PMI and, as a result, increase monthly cashflow to $600/mo+.

What made you interested in investing in this type of deal?

I was interested in leveraging a low-money down route into RE investing because I graduated college with $150k+ of student loans that I am aggressively paying down and, as a result, wanted to get into RE with as little money down so that I did not have to change how I paid down my student debt.

How did you find this deal and how did you negotiate it?

Being close to NYC, the market is very competitive. I looked in several NJ towns (Jersey City, Hoboken, etc.) for 12-18 months before finding this property through my RE agent, which was my 2nd or 3rd agent. We lost our first bid on the property, but the original buyer lost his job due to COVID-19 and lost his financing for the deal. When the house came back on market, we made an offer the first day and negotiated the seller covering half the closing costs.

How did you finance this deal?

FHA loan with 3.5% down.

How did you add value to the deal?

The house is new construction so this is not a sweat equity play. We are trying to manage a high-end rental property and provide a great place to live with great landlording service. The property is walking distance to the PATH train (subway) into lower Manhattan, so rent rates are increasing and we aim to appeal to high earning tenants.

What was the outcome?

We are still house-hacking and have thus far had two sets of good tenants.

Lessons learned? Challenges?

The PMI on the FHA loan is signifcant and cutting into profits more than expected given the high purchase price of the home. We tried to re-fi into a conventional using the appreciation on the property from the market going up. Instead of sticking with our trusted lender, we went with Bank of America because of the low rate they offered even though I was warned that their assessors were sub-par. We received an egregiously low assessment and did not qualify for the re-fi.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes. Estrella Rosenberg is our agent, she does residential and multi-families, and we love her. She can recommend her partners (lenders, attorney, etc.) that we also liked.

Thanks, all. This is very helpful. 

We're going to house hack for at least 2-3 years, so I'm looking primarily for cash flow to cut our out-of-pocket expenses as much as possible in the near term, and obviously provide some income long-term after we move out and keep it. I just started looking along NJ Transit stops, so good to hear. I'm also digging deeper into properties in Bayonne along the light rail. Definitely interested in hearing any experience with Bayonne, particularly near the 34th St. Light Rail. 

I appreciate it. I've been looking in those areas already, but have tried expanding my search to compare deals a bit further out in Jersey. What area is your JC property(s?) located in?

Hey Guys - I'm looking to purchase a small MF in Northern New Jersey and was looking for any thoughts, recommendations or advice on which towns are the best to keep an eye on. In particular, I'm curius about towns with preferential taxes and easy commutes to NYC. Thanks!

Thanks! Appreciate the input. 

I appreciate the input, but I'm not looking for advice on Jersey City AirBnB regulations, as I've done my hw there and it doesn't appear that they apply to this particular investment situation. However, I would greatly appreciate any feedback from folks in the Greater-NYC area that have run AirBnB listings and whether or not there are down seasons. And, if there are, how bad are they and when?

Because the AirBnB monthly income estimates are around $3k/mo vs. $1,800/mo for the unit. Obviously, there's additional risk involved, which is why I posed the question about a down season.

I'm looking at a new property in Jersey City and am considering using one unit for short-term rental on AirBnB/VRBO. I'm curious, is there a significant down season in the AirBnB market for the Greater New York City area?

Not sure, that's a good question. Although the 60 days only applies to owners who don't live in the property. 

Allan - From what I've read and been told, the ordinace that passed still allows owners of 1-4 unit properties to rent for less than 60 days pending a yearly permit approval. Is that accurate?

https://jerseydigs.com/voters-may-decide-ballot-initiative-airbnb-jersey-city/