All Forum Posts by: Eric P.

I run a rapidly growing furniture company. We're currently in 5,000 square feet but need 10,000. We're looking at moving the warehouse about 100 miles south and the owner of the company wants to avoid risk as hes not going to move his personal home. As a result hes asked me if I'd be interested in getting an LLC and putting the warehouse in my own name and our company renting the warehouse from "my company". (He's worried if I get hit by a car or something he'll be locked into a warehouse he lives over 150 miles from)

As you can see this gives me a great opportunity to buy a warehouse, be my own tenant, and have someone else cover the bill, while I build my net worth.  The problem is my wife and I are getting ready to purchase a house this year and any capital left over is there for emergencies.  So is there any way for me to purchase a warehouse that I imagine would cost $600k-$800k with no money down???

I think this totally depends on the situation of the house.  If you find something that has been on the market for a few months and you have a motivated seller, using an attorney might be a great way for the selling agent to "push through" a lower offer.  

For example:

If I'm interest in a house that's $450k that has been on the market for 2 months now with no offers and I'm working with a buyers agent, my offer of $435,000 might not look too enticing.  But if I'm working with an attorney, and I put in an offer of $420,000 and I'm the only one making an offer on the home, the selling agent has a little more motivation to try and convince the buyer to take the offer.  "I know its lower then we had hoped for, but we haven't received any offers and it looks like this could be a pretty quick close.  Might be a good idea to take this offer now"

I feel like in this situation an attorney becomes worth it, anything else I'm not so sure.

I've been considering doing section 8 in a neighboring town that isn't all that great of an area, safe enough though.  You can find houses for $50k-$100k in fair shape.  Just focus on the stuff that needs fixing to pass inspections and should rent through section 8 around $1000 per month.  With the $500 or so profit a month I'd put $250 toward getting more property, and the other $250 toward the almost guaranteed repair that would need to be done at the end of the lease.  If the tenant leaves and there's no damage I get a bonus.   But if I have a nice property, that I put serious money into I probably wouldn't do section 8.  I've read too many horror stories.  Cash flow needs to be serious for section 8 IMO.

It looks like I might be able to roll closing costs into my mortgage if I can't get the seller to cover most of them.  So I don't think I need quite as much money up front as I thought.  Now I just need to figure out how much cash reserves I'm expected to have.  Its amazing the amount of Cash needed upfront to purchase a home here in Jersey.  On a $300k NJ starter home you're talking $30k down, $10k cash reserves and probably $6k closing..   And thats just 10% down.  No wonder why I've rented for so long.  

Anyone have any experience with this? I have no interest in an FHA loan, and with how cheap borrowed money is right now I'd rather keep more cash. If you can add closing costs to the loan, would they be added to the 80% loan or the 10% loan?

Then I'm stuck paying PMI.. Most of what I've seen the FHA loans are NOT the way to go if you can avoid them.

Here in Jersey most nice homes in good neighborhoods start around $400k.  Money is just so cheap right now and the market is treating me so well I'd rather not dump all my cash into a down payment.  $20k down on a nice house and $2700 a month with taxes is no problem, we currently rent for $2400 and this move would be reducing commuter costs by about $300 a month.  So I'm wondering if a first time home buyer, with excellent credit, almost no debt and a household income between $120-$140k could get an 80/15/5 or am I stuck with the 80/10/10?

This would NOT be an owner-occupied property.  A house recently hit the market, the location for me is perfect (around the block from my handyman/property manager), price is right, and potential rents are perfect.  Needs updating but looks to be all cosmetic most of which I can do myself (rip up carpet for hardwood, wood panel walls, and needs a few appliances).  What are some questions I should be asking when considering a duplex?    

My youngest brother and his friends rented a prom house down the jersey shore.  Apparently the guy that owns the house is a genius.  He bought a big old house, and rents it out to proms every year.  He hires 2 security guards, one at the door and one in the house.  He doesn't care how many kids stay at the house but there needs to be a firm number and the kids get wristbands.  He charges around $400 per kid.  Parents love it because they know the parties wont get too out of hand so they happily pay, kids love it cause they know they can't get in trouble.  Just from my brothers group the guy had over 30 kids in the house over the weekend.  That's $12,000! apparently he rents the house 6 weekends in a row to different schools during the OFF SEASON!..  He then has the house to rent all summer long during peak summer rental probably around $4,000 a week for 12 weeks.  My brother's school has had a group of kids rent this house every year for 6 years running.

So by my calculations this guy is bringing in around $120,000 a year on this property.  Of course there will be fees for security guards, but there wouldn't be much damage as the security guards would be there regulating.  So figure even if the house has a $3,000 mortgage and after he pays the security guards he is still probably cash flow positive $80,000 a year on one property!

This is such great motivation.  My wife and I are 30 living in over priced North Jersey.  We hope to be home owners this year and start purchasing rental property.  My father is a handyman and plans to retire from his day job in a year or 2 so we've thought about purchasing collegetown property. I know the tenants are hard on the property, but its not uncommon to find a beat up $200k home in this area and have 6 kids living in it for $550 a head.  Having a handyman in my backpocket is the only reason I'd consider going this route.  My wife and I have discussed that we'd love to have 5 properties by 35, and ramp it up to 15 by 40.  The fact that you managed 25 properties in just 8 years gives us a ton of hope!