All Forum Posts by: Steve Wilcox

Hey all, thanks for the responses, I don't want anyone to think I am letting this thread die or not taking advantage of the great references provided

Over the next few days I am going to be evaluating the pricing, service, and coverage of various insurers, and I will update this thread when I have some information to share with everyone

This is very common with many wholesalers in our area, they want to make sure you are actually going to close, not just another wholesaler who is going to try to mark up the deal they already have then go market it with no intention or ability to ever close on the deal. 

I have no problem giving 10% deposits, however they NEVER EVER go to the seller, sellers attorney (in this case they dont have one), or sellers title co. They always go to my attorney's trust account, or at worst my title co who will be doing the closing. 

If they want to hold the money that is a big red flag. If they are promising clean and clear title as them to send over the title binder for your attorney and title co to review and see if you ever get anything. 

Many actual sellers want to make sure they don't get their time wasted by wholesalers and wanna be buyers who do not have the resources to actually buy the property, and that is understandable.

Make sure they dont see the money until you take title, and have had the title work reviewed and possibly redone by an independent title co of you and your attorneys choosing. 

There are no real secrets but the most effective things we find for renting out quickly are as follows. Presumably you have an idea of rents in the area before you purchased, but check craigslist (you can even go secret shop an apartment or 2 in your price point that will be a competitor to yours).

1. Having a great product- make your product at least as nice or nicer as other options at the same price point. (don't go crazy over-improving but people have to have a reason to want your apartment over another they could choose)

2. Curb appeal and nice block- you cant control your street or neighborhood after you own so make sure the area is clean before you buy a property because you are not going to change the neighbors once. Assuming that is good put some landscaping in, make the place look nice from the street, ect

3. Answer your phone, answer your emails, ect for rental apps right away. Lots of people don't leave voicemail so a missed call could be a lost lead. 

4. Price it right- you can't expect people to pay more for your property than any other in the area even if it is the nicest. 

5. Put lots of pictures highlighting all the improvements on the listing if you are listing online

Our strategy is to have a better product then our competition at the same price. 

foreclosure.com has lots of resources, http://www.njlispendens.com/ is also great.

Both sites are paid, I have never used foreclosure but nj lis pendens is a great site.   

Hey @George Stewart welcome to the site from a fellow north jersey investor. 

Good luck learning and getting started

For us cap rate is not as big of a factor in our purchase as we are buying distressed based on future cap. 

Different areas of Newark have very different cap rates, a new construction house in iron bound will have a very different valuation than an old building in the south ward. 

We are also finding that commercial buildings (actual apartment complexes) are offered at dramatically lower cap rates than 2-4 family buildings. 

 I don't own anything in iron bound or downtown because the returns are too small. 

In most of the rest of newark we are seeing an actual cap rate of about 13-15% on our purchase plus renovations, and about a 8-9% cap rate based on ARV and neighborhood. In Ironbound and downtown we are seeing things trade at closer to 6-7% cap rate.

Cap rate is somewhat less important when you are looking at 2-4 family buildings as appraisers are going to look at comps not cap rate when assessing value. We like to see a certain amount of gross and net cashflow from a building to meet or acquisition criteria for newark, I look for over $2500 in gross rent, and average of $300 per door on paper when taking out all expenses, maintenance, management, ect

As someone who started with no specific 'mentor' I think the concept of having someone show you the ropes and hold your hand through becoming a successful investor yourself somewhat unrealistic. You need to get out there and hustle, and if you have honesty, integrity, and put yourself out there you will meet good people, and they may help you and give you good advice to help get through specific obstacles you may be facing. 

To hope someone will guide you through all the trials and tribulations is unrealistic unless you are bringing something worth while to the table (i.e money, a deal, securing financing, ect). Just your ambition with little else is not worth a whole lot. Focus on learning as much as you can and building a nest egg of capital to use to start your business. 

Experienced investors are busy running and growing their own business, and newbies generally have very little of value to offer except possibly capital, and ambition. 

If you want someone to guide you through it and 'hold you accountable for getting stuff done' then the best place to look would be for a job at an investment firm, property management company, brokerage, or a bank. With any of those jobs you can earn money while you learn and get actual industry experience.

The other option is to network at some local REIA's, go into a few banks and see what you might qualify for as a live in multifamily, house hacking, as @Brandon Turner speaks about so often, and start to learn it as you go. You will never have all the answers, and no one else out there does either, so if you really want to learn get out there, make mistakes, learn from them and build a business. You could also try to do a live in flip to grow your nest egg, this is how I got started as did many others. 

Start wit the BP books like beginners guide to investing, ect and go from there. 

If you have any specific questions related to a deal you are working on post them on BP and you will get tons of help from others on the forum. 

I have been working with Affinity Group Management for a few years and have been happy with everything so far (never had a claim so not sure how much that's worth), however I am closing on a new property this week and their cost to insure it has gone up over 20% because of 'new underwriting policies'. 

I am curious what insures others use, how much you pay, ect.

I previously paid $120 for occupied properties, and $140 for vacant for coverage up to $150K for all the basic stuff. Now Affinity is asking for over $180 for vacant under renovation, and I think I should be able to do much better. 

P.S. They insure my properties in Newark which is a high risk area

I am looking in ironbound, unfortunately the prices are generally fairly high on multifamily for Newark and don't meet our investment criteria for ROI. There are some good deals to be found in ironbound, we are looking at some conversion projects on commercial stuff, but 2-4 family is competitive and expensive.

I am very interested in breaking into the downtown market of Newark, most of our stuff is west of town and I feel that downtown has the chance to appreciate the most. I think that for the most part ironbound has already come up, but if you are going to owner occupy I couldn't blame you for looking there

Income should never be less then 35% or total rent

What is MG?

It is hard to find good long term tenants over the holidays. Would you want to move in the middle of all the holiday craziness? Whey would they be moving then?

If you have no idea what your doing I would suggest at least buying landlording for dummies, Mr. Landord, or some other book to have a concept on what to do, get all the forms you need, ect. Otherwise consider hiring a property manager, there are tons of threads on bp about how to find a decent one.