BiggerPockets

All I hear from investors anymore is how bad it is to be a landlord and how unexpected expenses come up and really hurt you and how cash flow really isn't cash flow and you need to account for this and that…….

Unexpected expenses only 'come up' for landlords that are uneducated. All of these 'unexpected' expenses are actually VERY PREDICTABLE if you understand the business. I would suggest reading one of the 50% Rule threads in the General or Landlording Forums.

I know this isn't going to be easy but man is it really that bad, especially if you have property managers?

It is not 'bad', but there are the predictable issues of dealing with tenants, property managers, maintenance issues or maintenance personnel, etc. These are neither good nor bad, they are what they are.

Mike

Yes, landlording is my business. Again, I would suggest reading one of the 50% Rule threads in the General or Landlording Forums. That will save you much of the grief that the amateurs are talking to you about.

Good luck,

Mike

Hi Aly,
What part of NJ of you from and where are you investing?
Joe

Hi Joe. Nice to see another guy from NJ. I'm in Union County. The negative sentiment you've been hearing is likely due to the fact that it's almost impossible to successfully invest in rentals in most of NJ. The extremely high property taxes combined with the high cost to purchase make it that way. I know there are a couple of people here who claim otherwise, but I haven't found it to be the case at all. You can probably fix and flip to homeowners, but you won't be able to sell to investors, and rentals just won't cashflow.
I've been investing in upstate NY. Prices are very low, taxes are reasonable, and rents are relatively high compared to expenses. I'm not talking about Westchester. I'm talking about the Buffalo and Rochester areas. You won't find much appreciation, but you will find cashflow that will enable you to pay off your expenses, pay the mortgage, and eventually end up with a free and clear house, even after paying for a property manager, of which there are many. Just stick to the low-income/blue-collar/non-war-zone areas.
I hear Philly's not bad, but I've never tried it.

Think about looking at commercial real estate. A small office building on a main street can sometimes cost the same as a house, but frequently do not have the same headaches.

Hi Aly,

I've done Elizabeth, Irvington, Newark, and Jersey City, and continue to look. Plenty of properties for sale, none worth purchasing as a rental IMHO.

See not everyone has the same strategy as me, which is to obtain a property at less then 70% - repairs and refi and get all of my capital out.

Unfortunately, that won't work ANYWHERE (almost anywhere)! When you take all the equity out of a property, they simply won't cash flow. That doesn't mean that you must have any of your own cash in the property, but it does mean that you'll have to leave equity in the property unless you want it to bleed cash.

Mike

Hell, why stop there? If you pay cash for the whole thing, then you'll have an even better chance at positive cash flow according to that way of thinking. But it's the wrong way to look at it. If I find a property that will gross me $800 per month in rent and has $600 per month in expenses, and I decide to pay 300K cash for it, I suppose you could say that I'm cashflowing at $200 per month, but the reality is that I've just tied up 300K in an investment that's returning 0.8% interest per year. THAT SUCKS. I can probably do better than that just leaving the money in my checking account.
If I have 300K cash to put down, I'm still going to evaluate my deals as though I was going to finance the whole thing, even if I decide to pay cash later. THE AMOUNT OF MONEY I PUT DOWN DOES NOT MAGICALLY CHANGE A BAD DEAL INTO A GOOD DEAL.
And because of that, I still say NJ does not support successful investing in residential rental real estate, regardless of how much money you put down.

What is the benefit of mobile home renting over single family home renting? Are you strictly talking about maintenance cost or are there other headaches to consider?

Yeah I really don't get the mobile home thing either. You still have tenants and tenants who are still probably going to give you some troubles at some point...we're not talking about renting in upper class neighborhoods.
I think he may be referring to the maintenance costs which are probably lower in mobile homes. With this said you really don't get any appreciation so you have to weigh the lower maintenance and no appreciation with higher maintenance with good appreciation. I don't think it is close. Appreciation on SFH would out weigh the other scenario.