All Forum Posts by: Brian Dalton

I think it all depends on: what the general practice is in your county, appetite of the lender to fund you knowing that there could be contamination issues, you're appetite and budget to get involved in what can be an extremely expensive remediation process, and the prevalence of tanks where the house is. Here in Essex County, a tank sweep is SOP. Our lender won't fund us and our lawyer won't let us proceed with a purchase unless we have the sweep done. In my opinion, a good agent won't let you buy a house without a sweep either. 

We are currently under contract on a house that had a tank pulled a few years ago. We have an NFA letter as well as the paperwork for the well tests that were completed subsequent to that and we still did a tank sweep. Our tank guy has horror stories about multiple and hidden tanks on a property. 

My advice: spend a few hundred bucks for peace of mind even if there's no evidence of a tank. Ping me if you want the name of our tank guy. 

@Mike Cumbie, @Chris Mason, and @Zack Karp, apologies for the very late follow up, but we did eventually have to provide Wells with the HUD from when we purchased the property. We provided them a heavily redacted version and they seemed to take it. My wife who has a background in banking, called Wells and asked tons of questions. Neither the requester nor her supervisor could give a straight answer. We just moved on, figuring it was based on a random checklist item. The property closed two weeks ago and we cleared a decent profit. Thank you all for opining.

Question for all of you probate researchers:

There's a house on my block that owned by the "estate" of the deceased based on an online search. I went down to the courthouse today and searched the probate records, and the son of the deceased owns it, but I can't find a trace of him. The address he listed on the death certificate is the address of the vacant house. Any tips on how to track him down other than a basic Google search or Facebook stalking him? Any probate search tips in general? FYI - I'm in Essex County NJ so everything is at the courthouse on microfiche. 

Thanks.

@Mike Cumbie no, it's not. They're a 20% down buyer, which makes it just strange.  

My wife and I are under contract on a flip we purchased last summer. The buyer's lender, Wells, wants the HUD from when we purchased the property. Our lawyer has been pushing back as there doesn't appear to be any legal reason given for doing this. The only explanation we've received is as follows:

"The justification for needing this document is we need an acceptable document that confirms purchase price paid by the sellers for the subject. We need to verify this is truly a flip transaction and all those documents once reviewed by our quality review department will indicate if the property is truly a flip and how we proceed. If all of the documents are not provided, we will not be able to approve the property and the transaction cannot continue." 

We're not trying to derail our own transaction, but is the case of a lender run amok with random paperwork requirements based on nothing more than a checklist? Has anyone else ever had this requirement forced on them, and if so, what did you do? Why wouldn't they just use the tax records?

@Michael Knowles I think a lot of it depends on where you want to work and what kind of investing you want to be involved in once you separate from the military. Do you want to do debt or equity? Large institutional investor or smaller RE shop? Regional or national investor? The list goes on. From my research, RE programs appear to be regional; in the Northeast, NYU and Cornell have good programs. Here's a good list from US News:

http://colleges.usnews.rankingsandreviews.com/best...

That being said, my suggestion, as a veteran, is you keep focused on what's in front of you: 4 years in the service. 

Good luck.

Hi @Eric D., as a fellow Maplewood investor, I thought I'd throw in my two cents. Before I get into what our strategy is, I think you need to start with an area, more specific than NNJ/CNJ. You need to know which counties, towns, and specific areas of the town you want to invest in. As an example, my wife and I invest in Hudson County, Jersey City, Journal Square/McGinley Square. We also invest here in Essex County, looking in Maplewood, South Orange, and West Orange. Once you know where you want to invest, you need to find yourself an agent that works with investors and can help guide you. We have two agents, one for Essex and one for Hudson. Also know you're price point and what you can afford. You don't want to buy a house and be existing on the Dollar Menu. When we find a potential rental opportunity, I do a lot of modelling in Excel to do analytics regarding rental price, cash flow, equity buildup, etc. I know that I can, if need be, drop our JC rental to $965/month in a worst case scenario and still break even.  

Now, on to strategy, we look to do one to two flips a year (one is currently underway, it's our first) to help us fund purchases of rental properties. Ideally, we're looking to buy multi families as rentals (following the @Darren Sager strategy. I highly suggest you listen to his podcast, #48 I believe. I also had the opportunity to sit down with him for a few hours last week to talk through a range of issues. He's been investing here for almost 20 years, and is quite knowledgeable. It's also a reaffirmation that RE investing can be done in this area.) but if we can get a predetermined amount of cash flow, we're interested. The last property we bought was just south of JSQ, good building, $300/month in cash flow, and given the building going on in JSQ, we also see it as a long term appreciation play. 

I can't speak to wholesaling, but I agree, it is expensive to invest here, and IMHO, I don't think the stock market is the way to go. I used to, but given the way the Fed has manipulated rates and asset valuations, and the frontrunning HFT algos, I think what many would consider "normal" stock valuation (Gordon Growth model, DCF, P/E ratio and such) holds no water anymore. A lot of people on here will talk about scaling. Find an area you can invest in, and either through appreciation, cash flow, or some combination of both, scale up. As an example, go invest in the Hillsborough area, maybe you flip, maybe you hold. In a few years, if you held, see how much the property is worth, maybe you sell and move to a more expensive area. maybe you stay where you are and just trade up.

You need to put together a good team: agent, contractor, lawyer, accountant. We have put together what we feel is a really great team of professionals. Since we're also financing through traditional methods for now (depending on the price), we also have a banker. Call around, talk to the banks, lay out your strategy, see what they're willing to do. Definitely be able to articulate your strategy in about 30 seconds. I called 4 different bankers before I got to someone who would do business with me. We've been through 3 different lawyers and finally have someone we're satisfied with and trust. We got lucky with our agent and contractor.   

Lastly, be smart. Be smart in who you bring on board. You need to be able to trust them. Be choosy. Be choosy about what projects you take on. Our first flip "spoke" to us. As crazy as it sounds, we just had a good feeling about the house. It had good character, is in a good area, and was at the right price. Run numbers, over and over and over again. As an investor, there's no emotional attachment. If the numbers work, they work, if they don't, you walk away and find another property. Make offers. Most of the time, you're going to get outbid. We're going to make a cash offer on a house here in town. The offer will be $140k below ask, but you never know what motivates a seller. Offers fall through all the time for one reason or another. Twice we've had sellers come back to us because the initial offer fell through.    

Good luck on your venture.

Hi Loui, I grew up in SI on the south shore but had friends all over (North Shore, Todt Hill, Grasmere, etc). My parents still live there and at some point I'd like to pick up a property in my old neighborhood (Great Kills). I currently live in Northern NJ (Essex County) and my wife and I own 2 condos in JC and are in the process of flipping a house in West Orange. Would be happy to answer questions about any of the aforementioned, 

Fannie and Freddie are starting to drift back towards this, and that gives me pause about putting money into the market (Quicken Rocket Mortgage is a good reminder of pre-crisis lending). That being said, they appear to be trying to attract millennial buyers, however, at the sametime, some of the other larger banks are closing out of certain residential/consumer mortgage lending practices. Additionally, some of the securitized Non-Agency RMBS that are coming to market have much higher lending standards than they did 8 years ago, due to most of the large banks maintaining higher underwriting standards, because they don't want the bad press of a taxpayer funded backstop. 

At the end of the day it really depends on the market. I would just say that NY/Miami would be forward economic indicators, so if I saw a slowdown in the NYC rental market, like I do now, I would anticipate a ripple effect through the residual markets surrounding the area, as personal experience is indicating. Lastly, there was a real estate investor that mentioned on one of the podcasts that the number of cranes on a skyline is inversely proportional to the direction of said housing market. If you were to look at the NYC skyline right now, there's a lot..... just saying. 

Thanks.  That makes sense.  I think commission on the profit was what we were thinking.  Not true equity/control of the deal.  Maybe we are just mixing up terms being newbies.  Thanks for the quick replies!