All Forum Posts by: Ashley L.

@Steve K.   ah amazing response, thank you so much. to clear a few things up, that was a professional appraisal that appraised at 650k. The 3800/month payment includes All renovation (homestyle loan has all renovation costs built into mortgage,) principle AND escrow (taxes, insurance, etc). And this would be a collaborative management and maintenance effort between us and my parents as we all live in town and my parents have been investing in real estate for decades so they have a great deal of experience. Here, I am happy with this margin to start.  Everything will mostly be handled by us,  and in all honestly, rentals dont really sit vacant here, especially not next to the train station that goes direct into NYC. But of course we have to account for the slight chance of that, and im okay with that and still will be very happy with this investment, as this town is expected to boom as the next Hoboken.  Whether a shift happens or not (and in this market, we are closely monitoring it), i am still very confident with this purchase and the future equity of this house.  A similar comp on this same street just sold for almost 900k.   I appreciate the advice on all of these things, as i am completely new to bigger pockets and will start to take advantage of those calculators and podcasts you mention.  This is just such a different market than what others who have commented have experience in, so i am taking that into account, as well.  Thank you so much for these scenarios. I will be having a sit-down where we go over all of this and figure out what works best and is most fair.  Again, at end of day, I am still happy with this purchase and am currently the envy of many investors in this area for snagging this pocket listing in this location.  This is a great learning process for me and I am so grateful for all of the advice!

@Elijah F ...yes they want ownership, not just to hold a note, great advice.really helpful, thanks so much

Also ,I am a Realtor here and run all neighborhood and town comps to see what everything is selling and renting for to make sure this Is a good investment. I also have my finger on the pulse of the local market every day, along with the impending shift. $2500/month in cash flow after mortgage is not good investment to you? What would be? 

If I owned it 100% outright, I wouldn't pay rent either for the year I have to live there, so why would I pay it now just because my parents put in a little bit of $ in exchange for stake in ownership?How would me paying market rent help the situation?  I'm not understanding that.. Any help appreciated 

Why would you think it is not a good investment as a rental property? Mortgage is 3800 until I refinance as soon as I can. Rental income will be $6300 to start, tenants pay utilities.taxes are low. How much do your rental properties generate every month?

hey Jaysen-- thanks for the reply. Just to be clear, this is in a town which is one of the hottest real estate markets in the greater nyc area right now. I already appraised at 650k, and this will only go up after the work, as the town is experiencing an astounding amount of growth and gentrification at the moment.This is the #1 street in the center of town, 2 minutes walk from the nyc mid-town direct train station, and 2 minutes from all of the bars, shops, and restaurants.  I will not be in the red on this property.  I am a Realtor here, as well, so I am very in touch with the comps and local market.  This was an estate sale, and it was a Very good deal for a multi-family house here. The rent for the house already appraised at $6300 in this market, and that will also only go up.  For the year that I live in the home, I will break even,  as rent on the 2nd unit is the same as my monthly payment. after that we will have cash flow of a minimum of 2500/month from this house.

As far as the ownership, this is  Homestyle loan, which means the renovation is done by a GC and built into the mortgage.  So, the 3800/month payment includes the renovation loan and taxes and insurance escrows.. everything.    Does this change your answer? 

If we live here for a year rent free, doesnt that help to even things out a little bit more in terms of ownership? Its a unique situation so its hard to figure out.... also, yes i realize its not a gift, but thats what it started out as.  Only mine and my husbands' names are on the deed, so i dont consider them owners at this current time.  Once we figure this all out, we intend to add them to the deed and add their share in this home into their wills.

I'm confused about what you mean about us paying market rent. Market rent on our unit would be $2500. If we already put $40k more than my parents into the home as downpayment, why would we pay rent of 2500? then that would just be putting more money in their pockets when we are trying to even this out, not give them More money.  Maybe a little more clarification on this would help... thanks so much for your help!

Hi All! Just purchased my second investment long-term Hold Property. Because it ended up that I couldnt use an FHA due the proximity of a gas station to the house, my parents decided to own the house with me, contributing to the downpayment, and i would do a homestyle mortgage (15% down mortgage with 115k reno loan built in). So it would be $475k purchase price+$115kish in Reno...108K down total (that includes the 15% downpayment plus closing costs). My parents gifted a total of 35k, and my husband and I put the rest in.. a little less than 75k. My husband and I have been trying to work out these financials with my parents to see how this will be fair. My husband and I have to live in the property for 1 year as primary residence (just like an FHA) and we are the ones on the deed because my parents credit isnt good enough. We will renovate and rent the upstairs apartment out at 3800/month and, after 1 year, we move out of the bottom, and we will make another 2500/month on that unit. Our mortgage payment is approximately 3800/month. During the first year while we have to live there as primary residence, once we rent it, basically it is a 1 year wash with no cash flow and we just break even, as the rent coming in is the same as our 3800/month mortgage payment. After we move out after 1 year, we will then be making positive cash flow of 2500 from now also renting the bottom unit (yes NJ rent prices are astronomical). So, what we are trying to figure out is, if we put in 75k, and they put in 35k, and then we live in the house for 1 year rent free (basically 2500x12=30k) do we then add that non-paid 30k rent to what they contributed and now we are basically almost 50/50 on ownership? My husband doesnt think it is fair still, but since we are living rent and mortgage free for 1 year, my parents think it is fair that we then have 50/50 ownership after 1 year. We are all so confused on this, as it is a very unique situation, and even my accountant brother is having a hard time determining what is fair here. What are all of your thoughts?? Help!