All Forum Posts by: Joe Edwards

@Alberto Nikodimov

I am full steam ahead my friend!

I sold all my flips early this year and with COVID its been tremendous. I thought I was going to get stuck carrying some serious properties and the mark completely showed me that my investment strategy of investing in the suburbs of New Jersey outside of NYC was a gold mine. 

I recently closed on 2 separate sweet BRRRR duplex deals and I'm setting up to close on another a third duplex before the end of the year. All these properties are total fixers with huge value add componte

1st Duplex I have demoed down down to the existing foundation. I will be adding 3 coarse of block to get larger ceiling and then add 3 additional floors. The new duplex units will be 2 floor luxury units with UNIT 1 being the basement, 1st floor and UNIT 2 being 2nd, 3rd floors. UNIT 1 will have access to the yard and the UNIT 2 will have a roof top deck. 

2nd Duplex is all ready a large existing 2 family approx 3500 sq ft. This house has been gutted down to the studs and exterior stripped to the sheathing. This home is all being converted to 2 floor units making UNIT1 the basement/1st floor and UNIT 2 will be 2nd floor/ Attic. These home will all new everything

The 3rd property in works is a existing duplex that sits on a lot large enough lot for me to subdivide an build a additional duplex unit. The existing duplex will be fully gut renovated with brand new everything and the new house will be a ground up duplex which basically gives me a QUADPLEX out of this property for the ultimate home run. 

My investment strategy is the focus heavy on the construction, value-add and making all my property brand to new. The market that I am in is very expensive but the upside if the properties are done right your get incredible ARV's, sold appreciation and big rent with amazing NET cash flow. So for me its all about new everything which keeps the capex down to almost zero for the 1st 5-7 years and the tenants want to stay long term because the units all killer lifestyle pads.

So I'm still looking for deals because I'm showing my lending partners there are still amazing opportunities out there and whether there is a crash or not the properties I am purchasing will more demand in a crash and killer cash flow no matter what.

So if anyone is sitting on the sidelines waiting for the meltdown of 2021 I think your making a huge mistake. Its not going to HAPPEN. or shall I say the correction is going to HAPPEN but your not going to feel it because all the large institutional money is going to be there buying up everything from the banks. So the ECO system at large will not feel it. 

By the way these institutional investors will be paying retail for these assets because cash flow is king and the largest payer in the world will be printing loads of money for housing and that player is the US GOVERNMENT! UBI (Universal Basic Income) is coming and it will be used for food and shelter only. Do some research and look into it. So double down if you can 

@Jayson Greenblatt

Is the seller asking you to out up 30% for earnest money?

If so I would be gun shy of that since he is pushing for 5% more that will just go in escrow. I try not to put that much down unless it's a killer steal of a deal and I'm showing them I'm very serious. But normally showing them proof of funds will be fine

Your closing with a conventional loan so I dont get it

Best of luck!

@Michael Lettieri

If your going to section 8 the unit in NJ then it matters for sure. 4 bedrooms get more money and are in more demand. So depending on what part of JC your buying in it depends. The additional bathroom in the good sections will fetch more rent. 2 baths are nice for roommate situations.

Good luck on your 1st purchase

@Filipe Pereira

There you go! In 2008 melt down not crash the market didnt truly feel it until 2014-15. So what makes people think 2021 is going to be the year. Banks are sitting on loads of cash. The banks already knows all there clients that will default issues so they have reserved liquidity for that. It's not going to be what people think.

With that said like 2008 there will be people hurt and for the experienced investor there will be some good deals out there to be had. Those deal however want be easy, straight forward deal. They will be deals that experienced creative people will put together that works inside there model of investing

@Steve Vaughan

You are right on point my friend. If you arent doing deals now if you dont have experience your probably wont be doing deals when the lending tightens up or drys up.

In my opinion I think many people are missing the massive elephant in the room. Very large institutional investors are loaded up with cash with WAR rooms on go mode to buy up as much of these assets as possible. They will be buying large packages of trouble assets straight from the bank for pennies on the dollar. Most of this inventory wont even hit the market whole sale like the 2008 crash.

This info is coming straight from investment banker friends who learned from Black Rocks moves in the 2008 crash .

So good luck in waiting for all the unicorn deals! I dont think it's going to be there folks so stay active in the game

@Bradley Swett

What i was referencing was if you get the HELOC and pull 55k out in the HELOC to invest that cash into property your are doing BNRH (Buy, New, Rent, Heloc) lol. It's not to far off from a BRRRR (Buy, Rehan, Rent, Refinance)

@Bradley Swett

If you can hit the property for a $55k HELOC I would do it right away and find yourself another giving you a great return then the expense of the HELOC.

If you could equity and put it in another asset you would have a defacto BRRRR! I guess if theres such a thing lol

Good luck!

@Tom Wagner

Right on! Property taxes here in our state can make or break a deal.

I'm located in Bergen County. I do my investing in Bergen and Essex mostly. BRRRR model multi holds and value you add buy and sell.

@Kim Hud

Congrats on pulling the trigger! The numbers on your BP sheet look solid. However, I would most certainly run your new rent numbers from a much more conservative perspective.

▪︎Unit 1 you are looking for a 3x increase in rent and the other 3 units 2x. My gut/ experience tells me your numbers may be a bit of a stretch. When I see those rent number my 1st question would be why didnt a experienced local investor beat you to the purchase given your purchase terms and the market showing such strong numbers?

So think about that and tighten up those numbers and set up a worse case scenario of rent numbers and make sure your still cash flowing.

Now ill put on my construction hat and tell you that you might want to rethink that $190k full gut rehab budget. Your property is roughly 3400 sq ft with 4 full kitchens , 4 full baths, as you mentioned new mechanicals for all units. Given the scale of the project your going to need architecturals, permits so that will be additional cost and included in the $190k you have all the finished materials for the project as well. Plus your GC's profit is in that number.

The budget seems a little light. The sq ft all in cost for construction and finish materials is roughly $56 per sq ft of liveable space. Up here in NJ I recieve phone calls all the time from 203k projects that have gone upside down due to budgets that dont cover actual real world cost.

Please do yourself a favor and have a very strong reserve fund for that possible event. Also prepare with additional funds in reserves for the fees you will have to pay to extend the 203k loan past 6 months.

▪︎Verify those things and if everything works out you have a solid base hit for your 1st deal.

If you have any questions or you need a experienced 3rd eye to look over your construction budget scope to make sure you are dialed in feel free to shoot me a PM.

No cost for me to review just a experienced investor helping a new invester! Dont want you to get jambed up on your 1st deal your taking on a big deal👍🏾

@Gaspare U.

I'm in! Coming from Bergen County