All Forum Posts by: Francisco B.

Hello all,

Just bought my first duplex in Bergen County, North New Jersey and I need a reliable contractor that is investor friendly. House needs a new roof and a few other things. 

Thanks Cisco

Thanks for the replies. Its in queens. I would prefer Brooklyn but the prices are to high for me at the moment. Queens is now seeing a big spike because Brooklyn is so expensive. I will double check with my accountant about the transfer taxes.

That's great that your getting your NY license. It's an interesting place that seems to break all the rules lol. The pace is fast and furious. Should be lots of fun for you. I plan on getting licensed myself one day. Must be great to have access to all that info.

Hey Darren,

Here in NYC it is common practice that the buyer pays the transfer taxes. Its not the law just common practice. I was able to get a 3k contribution from the realtor because he wanted to keep the sale. Seller would not agree to pay it but took money off the asking price. Here in NYC new constructions 3 families in decent areas are getting harder and harder to come by so I didn't want to make it a deal breaker.

What sucks for me is that the transfer taxes are not tax deductible from what I understand.

Hello all. I'm wondering if my closing costs are to high even for NYC.

@David, Great answer.

@Bharath, I am far from a pro but I am mentoring with friends who are pros in the RE game who warned me about houses with leaking oil tanks. We went to see a bank owned fixer upper that was $120k, potential resale $400k. The house was a great candidate for a flip until he found out about the leaking oil tank. He said he wouldn't take it for free just because of the potential liability and clean up costs. Be extra careful in areas with high water tables as the possibility of contamination to water supplies and homes nearby are increased like David said. He also said if the EPA gets involved it gets very expensive very fast.

What ever you decide to do I wish you the best of luck.

@Michael J. Thanks for the thorough break down. You brought up some very good points that will make me crunch the numbers again. This property is in NY so prices out here are a bit high. I could find a lower priced older MFH but not in an area where I would want to live. The older homes I saw were smaller and needed lots of work so I chose to stay away. At the time they were priced $150k less than this house. Now those same older homes are almost as much as this new construction home. I will definitely reconsider this deal after using the information you gave gave me. Thanks again.

@ Raynomd B. Thanks for the wake up call. I don't know what I was thinking. Water and common area lights are only paid by the landlord in multifamily properties. Thanks again.

@Kurt

Thanks for your response. Can you elaborate on why your opinion changed from last year? Thanks

@ Tom

Thanks for your Response also. The lack of confidence in the deal is just my nerves working on me about being a first time landlord. I have friends who say they felt the same way in the beginig also. I am doing my homework on the do's and dont's of being a landlord in order to avoid costly mistakes.

Here is a snap shot of what I think the numbers will be.

Current house with no mortgage.

Rent $1800 a month

Taxes $-442 a month

Water. $-50 a month if I can't get the tenant to pay for it.

Insurance $-100

Left over. $1158 which i will apply to the heloc i used for the down payment on the MFH. Interest would be $450 appx. a month

Now for the MFH

Unit #1 will be the unit I stay in.

Unit #2 $1900 tenants pay utilities

Unit #3 $1900 tenants pay utilities

Mortgage $-3700 including taxes and insurance.

Water. $-200

Total $-100

I figure it will only cost me $100 a month to live at the MFH plus utilities and food of course. In order to pay the heloc off faster I would apply an extra 2k a month out of pocket just towards the principle. Once the heloc is paid off I could apply the $1158 from the first property, $450 interest i no longer have to pay on the heloc, and the extra 2k a month to attack the MFH mortgage. Once the MFH is paid off I would take a heloc out on it, sell the SFH and use the cash to buy the next MFH. Am I crazy or do the numbers make sense?

Thanks again for your input.

Hello all, I am in the process of buying my first multifamily investment property and would like some feedback or advice on my strategy. Can anyone poke a hole in this plan? It looks great on paper but as we all know life is like a box of chocolates.

I am using cash and part of my HELOC for a downpayment on a new construction three family house for $680k. My first house is paid off and I plan to rent it for $1800 a month. I will use this rent plus part of my salary to pay the heloc off as soon as possible. I figure two years.

I will live in one unit of the MFH and rent the other two for $1900 a month. I figure interest and principle on my Heloc will be $1200 a month and roughly $3500 on the MFH. If things get a little tight financially I plan to only pay the interest on the heloc.

Is this a solid plan. Can I improve it in any way. My biggest fear is that someone will not pay their rent and put me at risk of loosing my properties. Someone suggested i rent to section 8 so the rent would be guaranteed.

What do you guys think?. Thanks in advance.

Thanks for the quick reply S.

Hello all. I want to start off by thanking the creators and users of this site for providing a place where people can learn and share their real life experiences with each other.

Question for you guys. We bought a fixer upper 3br 1b home in Bergen County NJ in 2007 for 220k. We put about 50k into it and paid it off in 2012. We are now in contract to buy a new construction three family house in NY about 30 minutes away from our current home.

We applied for a down payment assistance program for 30k and got a conditional approval. In order to qualify we would have to

1. sell our current home.

2. Use one of their preferred lenders for our mortgage.

3. Take a home buyer and landlord classes for a total of $300 - $500.

4. The new house would have to be owner occupied.

5. After living in it for 5 years the 30k loan is forgiven.

We have a heloc and our own funds to use for the downpayment and closing if we decide to go with out the program. Unfortunately our current house might only fetch between 225k and 269k. The price of the new house is 680k. The rents in the area are $1800 - $2000 a month.

We were approved by a non-preferred lender who would allow us to rent our current home for $1800 - $2000 and move into the new house but we wouldn't qualify for the 30k grant.

Our question to you guys is, should we sell our current home and use the funds for the new house or rent it out to help pay off the portion of the heloc used and eventually the new house.

Numbers on our current home

No mortgage

Taxes $5300 a year

Insurance $600 a year

Water $360 a year.

Utilities $150 - 350 a month

New house

Three family new construction

Price $680k

Taxes approximately 6k

Two rental units at $1800 - $2000 a month.

Hopefully i have included enough info. Please let me know if i left anything out. Thanks in advance for you help.

Cisco