All Forum Posts by: Shawn Mcenteer

Quote from @Jose Ferreiras:

@Shawn Mcenteer we currently do not occupy any of them. They are both rented We live in NY at the moment. And yes you are right, coming up with that down payment is really tough. It seems you did find the right lender to help you out, how did you come across them?

 If you can show that both properties are fully rented, getting another owner occupied loan should be achievable. I specialize in house hacking, creative lending plays a huge part in most of my deals.  Need to dive deeper with everything but from what you are saying so far it sounds like you would qualify for these types of loans. 

Quote from @Joe Auletta:

Hello everyone I'm new to real estate and looking for a good market to invest in a duplex around the 100-200k mark. I'm currently looking in Cleveland OH. Any advice or recommendations would be greatly appreciated thanks.

Best advice I can give is look locally to where you live and house hack. Owner occupied loans are a major advantage.  

Quote from @Cole Jennings:

I am new to real estate investing and I am planning on buying a 100k house in the Cleveland area and renting out to section 8. I don't live in Ohio so I would be an out of state investor. The market around where I live is too expensive for me at the moment. Just want some advice on whether this is a good idea for a first-time investor or if I should take a different direction.

Hi Cole.  I see this situation a lot and in most cases it can comes down to miss information. Regardless of the market you live in from New Jersey to the midwest leveraging a house hacking strategy is very tough to beat.  NJ is extremely high priced with high taxes but we also have extremely high rents that appreciate fast.  when you break down what it takes to by OOS compared to owner occupying a duplex multiple things will happen.  
-25% down loan means 100K property requires you to have 25K.  Leverage a 5% down owner occupied loan will get you a 500K property for same down payment
-when things go wrong in your house hack, you live on site already. When something goes wrong with OOS your 6+ hours away
-you need a place to live right now, why not have tenants pay for portion of asset you are living in
-100k property today.  maybe appreciates slightly at some point but not much.  There is a reason why NJ is expensive, we appreciate fast.  No joke cash flow is the joke, equity blows cash flow away.  Few hundred bucks per month does not change lives, hundreds of thousands of dollars in equity through appreciation is life changing.  Appreciate then buy the cash flow if you must (or keep property because cash flow comes with rent increases)
-management fees are not cheap, learning to self manage is easy
-having team in place 6 hours away is tough, situating team locally much easier especially if you align yourself with people doing what your doing.

To me OOS is taking step in wrong direction for new investor. 

Hi @Jose Ferreiras which property do you currently live in SFR or MFR? I will let you know my wife and I have lived in multiple properties, the largest down payment we ever put down was 10%. We have purchased multiple properties in which we still have today for a low as 5% down. The biggest hold up I see for people getting from one property to the next is down payment. When a property requirers 20-25% down it can slow process down big time. The trick is finding the right lender that will make low money down work in your situation, very few lenders specialize in multi family/owner occupied investment properties so most will push their basic loan options without getting creative.

Hi @Eric Waldron are you able to house hack another property? Find another Duplex East on 78.  House hacking with wife and daughter is very achievable.  My wife and I house hacked with 4 kids and 2 dogs multiple times in New Jersey.  Best part is the farther East you come the more creative options are available for higher rents.  Perhaps a town like Raritan could work for you?   Always happy to take a deeper dive with your situation and toss some creative ideas around. 

Quote from @Matthew Platon:

Hello everyone ! 

I been thinking about taking out a HELOC on my current primary residence (Two family) . Is it a good idea ? Or should I look into other creative financing options? My two ideas are one to search/purchase another multi family unit and house hack. Or two make improvements to my current property. Such as upgrading the HVAC system in both units and other items that are value add and could increase rental income. I'm located in central NJ . Let me know your thoughts or idea's ! Thank you !

 Hi Matthew, seeing this post now.  I commented on another thread you were...

To answer your question this very property by property. I have been house hacking for over a decade in NJ and have dozens of house hacking clients. I will say the majority of the time HVAC does not produce significant ROI unless you already have a forced air system and you can tie the AC portion into the existing duct work. Also something else to consider is having open attic space and basement space if you are over under. Side by side tend to be little more difficult.

I have used HELOC a few times on properties I was house hacking. It for sure tends to be best option. I am not a huge fan of REFI becuase it restarts the loan back to month 1 and for obvious reason if rates are higher. Happy to chat more and map out a plan with you, tough to give definitive answer without knowing more about situation but if you have the equity there tends to be a way to make HH number 2 happen.

Quote from @Matthew Platon:

Hey Leroy, 

I'm very similar position as you and trying to figure out a way to getting my hands on another property. I'm looking into the HELOC route as well. Being the equity I have in my current primary is decent enough to get my hands on something. Although my market is tough still will try ( I'm in NJ )

Hi Matthew. Is your primary a multifamily? I have used HELOC a few times on MFR in North Jersey in order to get to the next one. How's the process been working out for you so far?

Quote from @Brad Currao:

I'm currently starting my real estate investing journey, looking for my first rental in Myrtle Beach, SC. I started working with a local agent that is helping me begin the process as I am located in New Jersey. The initial goal is to narrow our focus on the type of property and style of rental I want (Long term vs. short term). My budget is on the lower side but would love to hear from anyone who has experience in the area and what their thoughts are!

Hi Brad, any particular reason for wanting to invest OOS over maybe investing in state for as little as 3.5 or 5% down via a house hacking option?  If budget is on lower side seems like low money down loan could be huge help.  $500k OOS property may require as much as $100k down payment (unless you are considering vacation loan) where as $1m owner occupied property may only cost you $50k down payment and you'll be able to qualify rental income along with having tenants pay large portion of mortgage which depending on your current living situations may reduce your monthly expenses substantially. 

In your case House hacking may be a great way to go, even with baby boy. My newest youtube video released is all about house hacking with a family.  MY wife and I did it with 4 kids, multiple times. The basic system we used was: Find distress duplex in favorable area, upgrade it, increase the rents, force the appreciation while tenants pay large portion of mortgage.  In a relatively sort period of time we got to Fi using this strategy and even in todays market I have clients that are finding better deals compared to when I first started 10 years ago.

Quote from @Oscar Barbecho:

@Shawn Mcenteer Hi Shawn, yes actually I did house hacking with my house, Do you know any best towns in NJ to do ? I tried 3 years ago in Trenton NJ because it was very cheap but tenants were bad.. so I sold a property with a loss .thanks Shawn..

 NJ is very much a town by town state.  Believe it or not New Jersey gets a horrible reputation especially from those looking to promote out of state rentals but really in fact it comes down to towns you avoid and towns that are more favorable.  I have been doing this for over 10 years, I am yet to miss a single payment of rent.  My clients are in the same boat, it is very very rare for a client of mine to have a tenant or rent collection issue. I am talking thousands of months of rent amongst myself and my clients all without missing payments or going through evictions.  NJ for sure has opportunity if you know where to go and implement the correct process.