All Forum Posts by: Christopher Wraback

Hey all - I'm looking to close in on my next investment property in Ewing. I have an idea of rehab costs, but I want an actual number from a vetted source so I can go back to deal analysis and come up with my offer price. Based on the current description of the property (haven't checked it out yet), I'm looking to add about 400-800 square feet of space through a bedroom, a full bathroom, and maybe another common area. Looking to get an offer under contract by the end of next week at the latest, hopefully this week. Going to check out the property Tuesday, and would be open to meeting with the contractor at the property then, Wednesday, or Thursday. Goal is to get pro-forma ready by Friday and start capital commitments then.

Anyone have a good contractor in mind or is a contractor that would be able to meet and do a consultation with me?

Also, if anyone is looking for a passive investment opportunity and is looking to build their wealth through real estate, feel free to reach out to me. This is exclusively a passive income investment and in return I charge a small fee.

Thanks BP Fam!

Yeah @Gerald Boone there's nothing you can really do there. It's noble of you to try to help your friend out, but it's not going to work. The best thing to do is try to do a short sale just so your friend's credit doesn't get ruined from foreclosure. If he wants he can rent it out but he's still going to be losing $200/month.

Yes! Feel free to reach out to me, I specialize in lease options in NJ.

If you're the landlord, you can easily do a lease option on your property. You want to make sure the tenant is qualified and the rent exceeds all your monthly expenses. I would recommend a lease term for 3 years, with the option to purchase. And when they purchase they would have to get a new mortgage.

If you're the tenant, it's going to be a little harder. You will have to find a motivated landlord or a property that has been on the market for a while and the sellers are motivated. You would have to do your due diligence to determine the monthly payment of the seller, and offer rent at around $200/mo over that. Then negotiate a sales price for the end of the term that ACCOUNTS FOR APPRECIATION. Many people who try to do lease options are unsuccessful because they offer the price of the property today, and sellers know their home will not be worth that when the renter is ready to buy. I recommend you work with a qualified attorney throughout the entire transaction as well.

Any other questions feel free to reach out to me and best of luck!

Yeah, I agree with @William M. You have to check with the municipality and see if they're willing to allow it which may be difficult depending on how many other parcels in the area are commercial. For example if they're all residential then it's going to be difficult to make that happen, but it's definitely possible. If the numbers make sense, I think a mansion-type property would work perfectly for a wedding event. There's a similar place down by me in Aberdeen called The Addison Park which looks similar to a mansion and is now a wedding venue. I have a feeling you'll need to have a big budget for renovations though to convert it into the style you're looking for. Best of luck!

Don't let the capital you have available dictate what type of investment strategy you take on. You want to assess all factors that play a part in choosing your investment strategy: risk, skill of the members (is anyone handy or know a contractor?), and reason for investing. Believe it or not, capital is actually pretty easy to raise, so if fix and flip is your go to and you don't think you have enough capital, I can connect you with hard money or private money lenders that may be able to help you purchase a better property (say, a 200k property all cash with an ARV of 550k). If rentals are the way you want to go, then capital wise you're okay, and you would just need to get a mortgage personally, then transfer it over to the LLC. Also remember you may have repair costs for a property to make it rentable, so you will have to factor that in. (Say, you need 30k down for a mortgage, but 40k for repairs to make it rentable, then you wouldn't have the capital needed for the investment).

Hope this helps and best of luck!

Hey Dalwin! Congratulations and good luck! When analyzing the property, it's important to utilize the Direct Cap and DCF Valuation methods, rather than Sales Comparables. Then, after you do the analysis, you compare the Cap Rate that you derived with Cap Rates in the area to make sure it's a good deal. Do you have experience in this kind of valuation? If not, feel free to reach out and I can help you.

Hey Melody! I am an investor's agent that works exclusively with new investors to help with planning their financial goals and determining their investment strategy, while also helping them through every step of the investment process.

In regards to your question, I would DEFINITELY create an LLC. It is so important to protect yourself legally because there are great risks to be incurred from a financial liability side, and you want to ensure that if the property defaults, no one goes after you specifically for that money, and if the property does foreclose, that your exceptional credit score does not get ruined.

With that being said, what would probably make the most sense is getting the mortgage in your name, and then transferring this over to the LLC. This may cost some money, but it shields you from being personally responsible, and you will still be able to take advantage of great rates.

If you plan on rehabbing the 2 bedroom SFH, it's important to determine accurate rehab costs, and ensuring you get the property for a significant discount. If the property's ARV is only 50k, then it may be a little too risky because of the renovations that you are putting into it, and any closing or miscellaneous costs that will be incurred throughout the process.

Hope this helps and best of luck in your future endeavors! And if I can be of any assistance, feel free to reach out!

Due to the landlord/tenant laws of New Jersey, it is very difficult to find good rentals. However, college student rentals are great because the parents guarantee them, and you can set up payment made directly from the parents rather than the students themselves. Rents for students can also be charged on a per student basis, which will cause the rent of the SFH to be much higher than that of a normal SFH. However, the risk with renting to students is the increased operating expenses that come with constantly maintaining the property which will cut into your cash flow. Depending on the home price, these could be great rental opportunities!

@Jake S. thanks, that's what I was thinking. Do you think a 1% transaction fee and a 30/70 split would also be an option? I was thinking about offering them both the 50/50 option and a 1%, 30/70 option, or do you think that's too much? It's a $255,000 offer so for 1% I would be getting 2550, in addition to 30% of the NCF.

I am looking at buying a rental property in New Jersey. I have found it, done the analysis, and determined that it is a sound investment property and ready to purchase. I have a funding partner who is putting all of the money up. It is a single family home so we are getting a mortgage and only need $50k up front. The funding partner is taking care of that and the operating income will pay the mortgage. With the funding partner putting up money for the entire investment, how should I, the active manager that performed the analysis and found the property, get paid? Do I go 50/50, maybe lower, charge a transaction fee, or charge a commission? I am hiring a property manager as well so it's not like I am extremely active either, I just found the property and am taking care of the whole buying process and overseeing the property manager.