All Forum Posts by: Stephen Chatto

BRRR and Wholesale. Private Money to Purchase, Bank money to Cash out Private money.

@Rashonda Montgomery - There are 2 Issues. Banks don't like to be 100% in Trenton in my experience. And you need a few houses to refinance. It's hard to do them one off because the values are so low. ARV... That's a tough one in Trenton.

Do you Mom and Uncle need the money Now,   What are they going to do with it?   Let them be your 1st Private Lender.   It is easier to get Long Term Bank bank money once the asset is performing.  

If they are flexible there are a lot of ways to do this.  

Good Luck

 Faith, 

What type of recommendations are you looking for?  

Rissa, 

I AM NOT AN ATTORNEY - NOT LEGAL ADVICE.  Just my opinions here:

NJ is not an attorney state.   BUT traditionally North Jersey uses attorneys and South Jersey not so much.   I have done a lot of deals in NJ and have never used an attorney to represent me as a buyer.   Attorneys like any profession are a mixed bag.  Here is what I can tell you.  

1)  Don't use a $10 Earnest Money Deposit... the Attorney will immediately discredit you to the seller, and in return push for a REALLY High deposit. 

2)  Make sure you are comfortable with all the terms of the agreement.   Usually, You will present the offer.  The attorney will review, and then make an addendum with things not agreed to, or other provisions.   They are all negotiable.   Now you are going back and forth and the process gets slowed up.   Some attorneys will reject your contract completely and send you their boiler plate contract they are comfortable with.  You need to make a decision if you are comfortable reading and understanding their contract / addendum.   This is where an attorney representing you may be helpful...  But could get expensive.  You need to have a comfort level reading and understanding contracts.

3)  NJ Has a 3 day attorney review period unless waived in writing by BOTH Parties.  So if you present the a contract, and the seller signs it.  They have 3 days to let an attorney review and get back to you.  Most don't..  but just throwing that out there.   

4)  A plus about the seller having an attorney is that their attorney prepares the seller docs and thus the seller pays to get those prepared.  

5)  My contract ALWAYS states the seller pay's their own attorney fees.   In some people's mind attorney fees are a closing cost, so if the buyer is paying closing costs and this point is not clear...   turbulence ahead.  :)  Ask me how I know. 

6)  When title issues come up:  sometimes an attorney goes a long way in getting those cleared up quickly.

7)  If you are assigning your contract...  and the buyer is different on the deed then what was on the contract they sometimes prompt them to question it.  Usually letting them know a different entity is closing as buyer, and they move on.  Sometime I need to tell them I assigned it, and they move on.  Sometimes they want proof of an assignment agreement, and then they move on.  Sometimes... etc etc etc.   So be aware of that.  

Story Time:  Recently, after informing the attorney we assigned the contract, he emails me that "no where does it say the contract is assignable".   LOLS.   I emailed back "no where does it say the contract is NOT assignable".  Anyway they asked for proof of funds from the new buyer.   I had no need to give them that, but the buyer was able to send me a screen shot of his balances to move forward without further back and forth, and I was able to send it over to move forward easily.  

Another story.  I had a buyer who had an attorney.   His attorney see that we are not the owner of record and thinking we were trying to rip off his buyer.   Attorney takes it upon himself to track down and call the seller to "figure out what was going on".   So right up front the seller now knew we were not the end buyer, and that we were making 10k on the deal.  (30k purchase with 10k Assignment)   Obviously the conversation with the seller after getting that call from the attorney was a little interesting.  But we got the deal done.   

Good Luck,

Steve

 Sure, shoot me a DM

Sasha, 

Trenton is a good cash flow market.  The eviction process is not too bad.  Don't bank on appreciation.  Make sure you invest in better areas and find good management in order to stay profitable.   Feel free to reach out to me with any questions that you have.

Is anyone living there?

Seems like they are trying to keep investors out...  :)

Joe, Multi's have REALLY high taxes. Check whats available. The taxes on the SFR actually went down on a lot of my properties with the last assessment... but the multi's went through the roof. We appealed a bunch of multi's and got them all reduced a little. You just need to run the numbers on everything you purchase. Multi's you also need to deal with the state once you get to 4 units.

There is Cashflow in Trenton NJ.   Purchase wisely.   Invest your time to get good tenants.   Fix your properties up REALLY WELL.   Don't skimp.  You will get the cream of the crop when it comes time to get a tenant and maintenance expenses will go down.      

Good Luck

Chatto