Hello Bigger Pockets FAM
My name is Caleb. I'm a newbie. I'm a letter carrier in Morristown nj that's my full time job. I've been reading and educating my self on everything real state. I've been reading posts in this forum, reading bp blog posts and I just finished reading bp ultimate beginner guide.(I've been really inspired) My question is how long should I wait to invest in my first property? The strategy I want to use is a buy and hold/rehab. That what seems to be the trend in the area of New Jersey I'm in (which is Orange, Newark, East Orange area). Should I wait a year or should I give my self a couple months?
@caleb matteis Generally speaking, the sooner you start investing in real estate, the better! I advise that you have a few months worth of the mortgage payment put into savings before buying, so that you can cover the payments if there are any delays in getting a renter moved in. This will also give you a buffer in case you need to have some minor repairs done. If you buy your rental property at a good price, you can always sell it if you run into trouble. The key is just to get out there and do it!
@joel thanks for the the advice it makes sense. I feel I should dive right in as well. Thanks again
Not a problem! Feel free to let me know if you run into any snags and I will see if I can help you fix them!
Joel is 100% right about having a nice buffer. Those areas are great to invest in multi-families houses and provide great cash flow. However even with a good screening process set up you just never know. My first year with my 3 unit in Newark cost me close to 10k in evictions, vacancies, and damages. I inherited those tenants with the property and it cost me dearly. But now things are going great now and the monthly cash flow on it is a beautiful thing. Good luck !!
Joel is 100% right about protecting yourself and your real estate assets.
best wishes on your educational journey
@wilson a. Thanks for the feedback. I have a question how were you able to maintain things with that much over head the first year? Did you have that much in emergency savings?
@Ralph Soles thanks I appreciate the support and feedback.
@Caleb Matteis I started out by purchasing a duplex that needed a bit of work and grew my business from there. I would work on putting my team together first that way you have everything in place so when the right opportunity comes along you can act on it AND be prepared for it.
You should also consider joining us at the Meetup in Manhattan we're having on June 17. Its free and there will be lots of other investors for you to network with. @Wilson A. , @Ralph Soles you should come too! Click on the blue link to be taken right to it here on BP.
@Darren Sager Thanks for the advice. I will definitely be attending the meet up in NYC. I already RSVP. Darren thanks again. I'm going to follow everyone's tips.
I look forward to meeting you there @Caleb Matteis ! Glad you can make it as it will be a great way to get your questions answered.
@ Caleb yes I had the funds at that time to protect myself. The idea for me was to live there for a year, rent out the other floors and in a year do it all over again so I could get the owner occupant 5% down loan. And basically repeat the process. Due to the hit in my cash reserves it took me 2 years instead of 1 but I gained a tremendous amount of hard learned experience.
@Caleb Matteis As far as putting a team together, @Darren Sager is right in that you want to do that pretty early on. My recommendation is to make friends with a Realtor in your area. Usually, they will have most of the team put together already. Realtors can put you in touch with contractors, lenders, escrow agents and real estate attorneys. They can also sometimes find you great deals on multi family units!
Hi @Caleb Matteis welcome to BiggerPockets!
Welcome. You want a solid foundation before you start. That rehab could take 2 weeks, 2 months or 2 YEARS its your call. Time to build the foundation below.
Check out the Start Here page http://www.biggerpockets.com/starthere
Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 70 past ones to catch up on.
Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook
Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.
Consider checking out HUD homes for small multi's owner occupied gets first crack.
You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.
Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over
Thank you everyone for your input and advice. This is a great community. Very helpful! @paul timminis @michael weiser @ Darren sager @ralph soles @ Wilson a @ joel belding you guys are great thanks.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing