All Forum Posts by: Steve Wilcox

80k in newark will not buy you an operating 3 family in any area, war zones included

You may be able to get a semi-performing 2 family property for that budget, our typical investment criteria is total investment of 50-60K per unit or 20k per bedroom for purchase and rehab. We dont buy on streets that have less then 80% occupancy or significant number of boarded up homes on the surrounding 2 blocks. 

Most areas are rough unless you are east of the train tracks in ironbound or in north newark, north of 280 where prices are higher than what I just mentioned. Newark is tough, management is not easy, but there is money to be made if you have the right product with the right strategy/ team in place. 

If its a true pocket listing the best thing you can do is close on it. Make sure you close

If the agent is good they will have more of these in the future, and if its what you are looking for you want the agent to call you first. The most important thing to an agent is deals closing.

@Joey Chan is right on for our area for a professional install. If the subfloor is in rough shape or way out of level it could end up higher, also most installers will only give incremental pricing on 500sqft or more

You are in too tight of a spot, need more reserves, I would suggest you be ready to pay 6 months of full carrying costs as well as a few thousand for repairs, especially going into winter in NJ.

Worst case the person doesn't pay, you have to evict them, and something breaks or they destroy the unit. Then you need to repair/ make ready AFTER evicting the person, THEN find a new good tenant. You don't want to be in the position where you are desperate for a tenant and don't have time to wait for the right tenant. 

I would suggest saving up some more, look at side jobs in real estate you can do to earn some extra cash to get you there faster. Also look for properties that you could cover the whole monthly nut on your own and dont have to have the rent to survive. 

I buy lots of properties from wholesalers, and I would never let one hold my EM deposit. It goes into MY attorneys trust account. The check does not go to the actual wholesaler ever, some people might be comfortable allowing your attorney to hold it in their trust account, but not to you ever under any circumstances. 

I dont wholesale, so I can not comment on brokering, and your own personal ethics when dealing with homeowners/ sellers

I invest in newark heavily, but its a full time business. Our management team works very hard, and this is a business not an investment. 

You can get cheap houses but its also hard work. There are numerous challenges with the area that have been mentioned in earlier threads such as copper theft, very low income areas, ect. 

I would not buy in newark unless you are in the north ward or ironbound for a 1 off deal. If you are going to be active and buy alot of property then you can afford to put the systems in play needed to be successful there. 

Did you have any zoning issues that you faced to get this up to 5 units? 

sub metering electric typically involves rewiring a significant portion or all of the building which also means your walls will be like swiss cheese. Now you will also need to insulate and drywall, and if its an old building odds are you will discover tons of plumbing and framing issues once you open up the walls and see whats inside. 

You already named your purchase price if you are willing to pay a 7.5 cap. that seems really low to buy a totally vacant building unless you are including all your rehab, leasing commissions, ect into your price. 

I think that 'standard recommendations' are not applicable in real life. Only you know your true amount of time to commit, what your looking for from your units, what your future plans are, ect. 

Self managing is a great learning experience, but you could also get burned by lack of knowledge, and possibly get yourself in some hot water legally making possible bad decisions. 

Finding the right PM relationship is a very difficult situation for buy and hold investors, the same way flippers often struggle to find the right construction team. 

Ultimiatley I can say for me the decision for PM was based on my market (affordable housing in urban market), and the amount of management, and my desire to find the right fit for me before I needed it. I interviewed more than one manager/ company and picked the one that 'felt right' had recommendations from people I know who are in the same markets with many more units than I have. 

You need to decide for you what is the best, I would suggest getting some good literature/ knowledge on land lording if this is going to be your occupation, Mr. Landlords, BP, I am sure there is tons of other great info out there too, that way even if you dont manage yourself you know whats going on. 

I use a PM co because I invest in a very challenging market, and I need someone to help me deal with the tenants and the constant maintenance and management issues we face. 

Rates range from 6.5-10% depending on the portfolio, (bigger is cheaper), and he collects rents, handles all maintenance issues, tenant phone calls, section 8 inspections, snow removal, landscaping, ect. 

He also can find tenants for a fee, its usually 1/2 of 1 months rent. I use this service for all my rentals, the company is The Rental Shop, in Newark NJ. They only do Newark, Irvington, East Orange, and Orange, specializing in urban areas. PM me if you have properties and want the contact info