All Forum Posts by: John Walter

Should have specified: talking about the typical two family MFR you find everywhere in Elizabeth.

Trying to get an idea of what a bottom up build of a MFR in Elizabeth, NJ would run. I realize an exact price isn't possible, but ballpark is all I'm really looking for. Found a plot of land for $160k, which seems to be cheaper than most others in the area.

Any information would be greatly appreciated.  Thank you!

@Zachary Olley I don’t think there is any better education on a first deal than a live and flip (especially for a future flipper). Do as much work yourself as you can to learn the process, the amount of time that goes into a job, and what prices look like for items in your area. If you have any friends in construction, grab them to help out. Also, grab ‘1-2-3 Home Improvement’ from Home Depot. It’s a book filled with how-to’s on tons of projects. 

I haven't heard of that ever happening. I've seen anywhere from 15-35% for a MFR as an investment property. Do you have a conventional loan on your other property? Your DTI may make it difficult to get a conventional, depending on when you made that first purchase.

@Kenneth Garrett Your example makes perfect sense, but I thought in order to make a private loan like that there were legal hurdles (isn’t that where the whole credited vs accredited comes from)? If not, that seems great.

@Charlie Anne I really like Elizabeth, NJ. In honing in on this area lately and everything seems to be going on the right direction. 

@David Cha Welcome to BP! Thank you for your service, and congrats on your decision to invest in your future. I was laughing the more I read your post, because you're the Philly version of me. I'm a Vet, same age, I use the VA loan, and I work for the government as well.

Why would you choose FHA over the VA' loan? They have a lot of similarities, but I don't see FHA loans having any better benefits than the VA. By any chance, do you have a disability rating? If so, that would exempt you from the VA Funding Fee.

When choosing a property, it's important to distinguish what your goals are. When you are looking for a primary residence, I would argue that cash flow is not your biggest concern. You need to choose a location that you are comfortable with and a property that works for your specific family situation. If it cash flows on top of that, great.

My last point here: If you use the VA loan for the $400k property, why do you need the $25k down payment? Would that be all of your savings? Don't forget you'll have closing costs, possible vacancy at day one, and you always (ALWAYS) need to have some money for reserves. What I am trying to say, is if $25k is what you have, that may be better spent to keep in your reserves fund, upgrades, maintenance, etc.

As Abel was saying, take some time to find a great agent. They're priceless. I have found the agents from Zillow and other sites haven't been the most honest. I interviewed one on a property I was interested in a few weeks ago and the first thing out of his mouth is I had to move quick because there were multiple offers, and some of those were above asking price.

I found that odd since it had been listed for several months, and this Corona thing was fully under way. I kept asking questions, and finally he told me he needed to actually look the property up because he didn't even know which one I was referring to. Of course there are plenty of honest people out there, but always do your due diligence.

@Christian Estrella Elizabeth can be a great area, and they're are definitely deals out there. My best advice is to do your own research and don't take what anyone tells you as fact. I was told by at least a dozen people that renting out a basement was illegal, and lo and behold I decided to look into it myself (and it's not). There are ways to do everything and you can always find deals. Stick with it!

@Paul D. Hey Paul, I'm from that area and new to NJ. As others have said, there aren't many MFR there, and depending on where you are, you can get into some less than desirable areas.

As a matter of note, USF (University of South Florida) is one of the largest universities by number of students in the country, so anywhere near the campus will be inundated with students. Most of the houses and apartments close by are literally built to cater to students. 

As for other areas, Orlando has a pretty good number of duplexes and small MFR. The population is on the rise, and they seem to be really cleaning up the place the past few years (especially around the Lake Eola area).

Jacksonville is another opportunity area. Really, there are a ton of areas in FL, depending on what you want and where you want to live. 

Hope this helps a bit. 

I’m in NJ as well and I’m all but being forced to wait it out. I’m under contract for a new construction (and have been forever), but construction stopped with all of this. I also put in an offer early last week on another property, but unfortunately (they said) they had a Covid related death in the family and aren’t rushing to sell anymore so they’re not entertaining any offers. 

To get back to your question, both of these are buy and holds. My backup plan for one of them is to flip, but buy and hold is my main strategy...both overall and right now. 

Hey @Cordtz Tuatoo. Yes, there are several "limitations" to the VA loan for multiple uses. There is a cap per person, but a lot goes into that. If you're going to be purchasing out of state from your previous purchase, that actually helps you. Also, VA loans look at DTI very closely, but assuming you bought right, you can always refinance to paint a better picture for you.

Just know, typically, the VA will not look at rental income as actual income so don't include that if you're trying to calculate your DTI.