All Forum Posts by: Steve Wilcox

We use 2easy brand, its a hard wired system that has a centralized monitor to record everything on a dvr and it overwrites itself every so many days. They also make doorbell/ intercom camera systems as well that we use in apartment buildings that allow people to buzz in guests or delivery people. They require professional install, and are hard wired. Hard wired systems that have a localized storage will work without paying for wifi but you wont be able to see whats going on unless you go to the property and check the recordings.

Its important to understand what is included and what is excluded with each contractor you are considering working with.

How detailed are the plans you are putting out to bid? Do they have material specifications, finish schedules, and all the nitty gritty details to actually price out the job accurately or are you just looking for a ballpark number?

If you don't have a detailed scope of work, finish schedule as well as a full list of what is excluded from the bid I can guarantee you that no one can give you accurate pricing.

I can also tell you that construction, even ground up, has uncertainties, things from fluctuating lumber prices, issues related to soil, delays in getting supplies right now, and a bunch of other things that can causes prices to change during the course of a job. 

You can certainly hire an attorney to look at your construction contract with your builder but beyond that I am not sure what they would do going forward? You can hire a construction manager or owners representative who will charge you a fee on top of, or flat fee to manage the project on your behalf but that would be an additional cost. 

Hey guys, I am in due diligence on a small apartment building that has a moderate rehab section 8 contract in place, but the original contract has expired years ago, and now they are on a year to year basis. The contract is administered by DCA in New Jersey.

I am wondering if anyone has experience working with the moderate rehab section 8 program, specifically in Newark NJ. My understanding is that the contracts are basically for each individual unit, and are attached to the building, which is different then the housing choice vouchers which are attached to the tenant. That said if there is a vacancy or someone moves out the agency does not pay for the vacant unit during that time, but provides you with a few options after potential new tenants.

Wondering if I am missing anything, or misunderstanding something, and if anyone has any experience with the program

Almost all properties in North Jersey had or have lead water main. Getting it replaced is expensive and a pain. Some municipalities require you to replace from the curb stop out into the street and tap into the main (newark being one), others only make you to work from the curb stop into your building. Most of the old lead lines are over 100 years old and all will need to be replaced at some point, but discounting all properties that had lead water mains coming in would really limit your number of potential properties to even look at 

Do you have any specific questions? I have a portfolio across all the wards of Newark, and its literally block by block for the majority of the city. You can be successful if you manage properly and underwrite your expenses correctly.

I see lots of people coming into Newark without properly understanding the challenges of management, and the cost of doing business in the city, and its driving prices up as people are overpaying. 

If you have a specific questions I am sure we could be of more help 

Also theres lots of other threads on here about Newark NJ probably worth checking out

You should be able to get hard money at 10-12% interest, 2-4 points, 75% of purchase price and 75% of your construction costs not to exceed 65% of the ARV. There are numerous companies that offer this, including some of the large ones listed in this thread.

I personally have used Sherman Bridge, Lending One, Finance Co of America, and have had good experiences with all of them.  

I recommend you call all of them, run your scenario by them, and get a feel for who you want to work with. 

I have personally used hard money to build my business, and see it as a cost of doing business

You should call a local architect or land use attorney to give you a quick opinion. Developing parking space and getting rid of parking space may make your existing restaurant building no longer compliant. It's very hard to spit ball numbers on any type of development project because every town has different restrictions and every site within each town is unique.

I buy these types of properties in north jersey, and think these deals can be very good as long as you only pay for what you get. These deals can be very profitable but if you dont recognize the costs you can loose your shirt. Keep in mind to get a decent tenant you will need to have some TI budget and you will probably need to pay a solid leasing commission (5% of the total value of a 5 year lease is a real number), and the time the space will be vacant you will have to carry it until you find a suitable tenant (6 months), and all closing and due diligence costs are much higher then residential real estate. 

Its hard to know how valuable the building really is and if that cap rate is worth while because we don't know where its located, what town, where in town, how many parking spots per 1000 sq-ft, what the approved uses are without going in front of the board, ect

Most of the north ward (north of 280) is generally considered better then the central, south, and west wards, but you typically pay more to be there also, and there are rough blocks there. Newark is a very block by block area, and is constantly changing. I have properties in every ward and certainly find the areas that are cleaner easier to manage, less vacancy, ect, but most of the deals I have been seeing for the past few months don't pencil in any wards and finding deals in general has been increasingly difficult. 

I would say Newark on the whole is not for the faint of heart and management is a challenge especially if you want to out source and you have a very small portfolio.  In my opinion safest bet is Iron Bound, then much of the north ward minus a few blocks, and the rest are somewhat block by block and you really need to understand the micro neighborhoods and trends. 

What are numbers are you looking for help with? If you are just starting out I might caution you on getting into a full gut rehab in an urban area.