Doctor and Lawyer looking to become new real estate investors

7 Replies

Hi BP,

My wife and I are looking to start investing in real estate.  She is a corporate lawyer and I am a physician and we realize that we want to be in charge of our own income stream and not at the whim of those above us. We also have a new baby and realize that we really want to spend more time as a family and our current jobs don't allow that.  I have been listening to the BP podcast for about a year and am looking to make the plunge.  I reached out on BP to some real estate agents in our area (northern NJ), got in touch with one in hopes she would also help mentor us through the process.  Unfortunately haven't heard much from her since, though the initial conversation went well.  To be fair I did not chase her after she didnt follow-up on her end.  

Things I'm looking for or concerned about/or just thoughts

- When looking into BRRR properties

       - As always you don't know what you don't know

       - When looking into rehabbing a property the rehab costs are difficult to estimate (one contractor can est. 10s of thousands dollars different from a another)

- Should we not be looking at individual properties but rather syndications?  would this be a better investment of our money?

- We are willing to invest anywhere as long as the numbers make sense and we can set up the right systems to keep things running smoothly without us nearby.  

I'm sure there is a ton more, this is just to start.  Thank you in advance for your help and advice

             

Contractors can really take advantage , try and get a investor friendly contractor.  That contractor will need to be sent to you through your RE agent.  Good agents know the contractors .

I can tell someone almost anything because of my experience and smile,  I could tell you that all the sheet rock needs removed to save you money on the plumber and electrician. 

And that a crack in the foundation needs to have ........ and in the real world only a light cover up of $75.00.

Please reach out on any questions or concerns I have probably dealt with them a few times.

Dave

I switched from brrr and rentals over to land development to have lots available for my new construction spec homes. Profit is much better and almost always guaranteed since you're costs are outlined by contracts with sub contractors.


Ankur,

I loved living in Livingston, NJ as a kid.

Guessing with a new baby you have time on your side and that allows you to get educated, build a team and be selective.  Find a realtor or mentor that enjoys sharing what they have learned and also personally do the type investing you plan on.  Your local area will vary from ours who are giving opinions as to what opportunites are best for you.  

I am with Bill above and with the shift from having to live in cities with work from home trends, we are finding land ahead of the city growth to buy land to develop into large and small lots. Just doing BRRR on land instead of homes.

We enjoy family time on the land till ready to change it from agriculture zoning. 

Since you live in Northern NJ, have you considered NYC? NJ is expensive now while NYC remains comparatively cheap. The Fed has printed so much money and this has been reflected in asset prices with the exception of New York. I assure you, it is just a lag and NYC will catch up. 

Definitely house hack via FHA in NYC right now if you can. If possible get a 4 unit and a basement, that would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield.

Personally, I am very bullish on New York and NYC itself. Sure it suffered due to COVID, but you want to buy when there is distress. I think all the folks who moved away are already getting bored and already coming back. Plus, the vaccine is getting rolled out which will curb the spread tremendously. Now is the time to buy.

Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. Nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.

Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.

If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!

When looking into BRRR properties

BRRR is for more lower net worth guys. Its not for accredited investors because it not worth the risk and headache.

- Should we not be looking at individual properties but rather syndications? would this be a better investment of our money?

Syndications but focus on building relationships with pure passive Accredited investors first. 


Get bids from multiple parties, not just one.

Syndication's can be great, especially for busy professionals. Just make sure you find a reputable sponsor.

Are you two trying to step away from being full time at your jobs eventually and have more flexibility as a self employed person?

Are you primarily trying to replace current income with passive income or what are your goals?