All Forum Posts by: John Walter

@Tiago Ferreira Got it. Elmora Hills is the more affluent part of Elizabeth (northern part), so you may want to start your search there. East Grand Street, west of 1-9 has been experiencing a great turnaround the past few years, but as a result there’s a lot of competition. My family gets text messages from investors almost on a daily basis, trying to buy property. The one positive, most investors here haven’t realized English isn’t most peoples first language so texts are ignored and post cards get thrown away. There definitely potential here. 

@Mark F. Actually, the tax abatement is due to the fact that it is new construction. Rule is it has to be an owner-occupant, so if I did move, I would lose the abatement. Since I'm saving about $1,000 / month in taxes, I'll be staying here a while. Veteran benefits are pretty low in NJ (at least that I an aware of).

@Mark F. Good to see you on the call today; I've been out a while. I'm living on the second Floor and am renting the first floor and basement together as one large unit. Paid 535k with a 5-year tax abatement, so my PITI for five years is only $2,807. There is also a home warranty since it's new construction so I don't plan on having too many repairs in the first few years. Rent for the other unit is $3,000 even and tenant pays all utilities. If I moved right now, I could get around $2k-$2.2k a month for my unit and still not be the most expensive.

@Tiago Ferreira Do you plan on living in the unit? If so, it’s more important you love where you want than trying to snag a great deal. We can definitely talk about the better areas though if you want. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $535,000
Cash invested: $12,000
Sale price: $545,000

Purchased a duplex as a house hack in Elizabeth, NJ. This was a new construction, which was delayed nearly nine months for whatever reason. In the end, it worked out in my favor, as COVID has dramatically pushed prices up in my area. Other new builds in less attractive parts of town are selling for over $600k, which is great for me.

What made you interested in investing in this type of deal?

I really wanted someone else to pay for my mortgage. I am only a few miles from NYC, so the cost of living is through the roof. My goal was to eliminate my largest expense.

How did you find this deal and how did you negotiate it?

This new construction was available in the neighborhood where my family lives. It also just so happens to be three blocks from a train station with direct access to NYC (currently under a $70+ million renovation). Asking price was $545k; my realtor suggested I offer $555k because of the hot market. I decided to offer $535k and that was immediately accepted.

How did you finance this deal?

I used a VA Home Loan through Veterans United. Typically, Veterans Affairs charges the VA Funding Fee with mortgages, which would have equated to over $11,000 for my property; however, because I have a disability rating, I was exempt from this. In the end, I put $0 and had the other unit rented a month before my first mortgage payment was due.

How did you add value to the deal?

This was a new construction so I was able to choose my own finishes and pick upgrades where I thought appropriate. Since closing, I have made upgrades to the backyard, as I will be living in one of the units.

What was the outcome?

I am living for free.

Lessons learned? Challenges?

The importance of a good team and having those you can trust on your side. Choose a realtor with some experience. Ask questions and do not settle.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Rob Weigand, my loan officer, from Veterans United is a Rock Star. He was the only solid member on my team. He provided fantastic service, advice, and prevented me from erupting on my realtor more than I ended up doing.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $535,000
Cash invested: $12,000
Sale price: $545,000

Purchased a duplex as a house hack in Elizabeth, NJ. This was a new construction, which was delayed nearly nine months for whatever reason. In the end, it worked out in my favor, as COVID has dramatically pushed prices up in my area. Other new builds in less attractive parts of town are selling for over $600k, which is great for me.

Lessons learned: the importance of a good team. As I mentioned, this was delayed nearly nine months, and I was never given a good reason as to why. At one point, my realtor, my attorney, and everyone from the seller's side all disappeared and I could not get a hold of anyone for two months. Going forward, I have been introduced to several great RE attorneys and realtors that I will use for the next deal(s) in this area.

I am happy to report that after PITI, and a little extra for expenses (new-build so not much here) I am living for free in an extremely high cost area. Not bad for $0 down (except closing costs), especially when this was my first deal on my own.

What made you interested in investing in this type of deal?

I really wanted someone else to pay for my mortgage. I am only a few miles from NYC, so the cost of living is through the roof. My goal was to eliminate my largest expense.

How did you find this deal and how did you negotiate it?

This new construction was available in the neighborhood where my family lives. It also just so happens to be three blocks from a train station with direct access to NYC (currently under a $70+ million renovation). Asking price was $545k; my realtor suggested I offer $555k because of the hot market. I decided to offer $535k and that was immediately accepted.

How did you finance this deal?

I used a VA Home Loan through Veterans United. Typically, Veterans Affairs charges the VA Funding Fee with mortgages, which would have equated to over $11,000 for my property; however, because I have a disability rating, I was exempt from this. In the end, I put $0 and had the other unit rented a month before my first mortgage payment was due.

How did you add value to the deal?

This was a new construction so I was able to choose my own finishes and pick upgrades where I thought appropriate. Since closing, I have made upgrades to the backyard, as I will be living in one of the units.

What was the outcome?

I am living for free.

Lessons learned? Challenges?

As discussed previously, the importance of a good team and having those you can trust on your side. Choose a realtor with some experience. Ask questions and do not settle.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Rob Weigand, my loan office, from Veterans United is a Rock Star. He was the only solid member on my team. He provided fantastic service, advice, and prevented me from erupting on my realtor more than I ended up doing.

Thank you @Matt Crusinberry I’ll reach out. I appreciate it. 

Does anyone have any recommendations for a wholesaler they have used in the Orlando, FL area? I have some flippers there looking for their next project. 

Thank you. 

Hey David. Yes, the inspection cost you a total of $850, but what did it save you? That first purchase may have a special assessment soon due to the lack of action hey the HOA that could cost much more than $850. When you think of it in those terms, you should be happy with the inspector. Also, remember no property will ever be perfect. Rust, fridge issues, etc are all easily fixable. That's why you have Rehab budgets.

I know the process is scary, but everything boils down to a number. Mold, cat piss, roofs... they're all just numbers and if your numbers work, you don’t have to worry. 

I agree. I don’t foresee any type of “normalcy” returning for several months after a viable vaccine becomes available. At that point, employees can be recalled into their offices. They will start going out to lunch, happy hour, dinner and spending will increase across the board, getting others back to work in the process. 

I’m interested to see how Europe fares with certain countries doing better than others. The Eurozone as a whole just posted a record 12.1% drop in GDP, with Spain leading the contraction at 18.5%.