Philadelphia, PA · Member since 2016 · 17 posts · 4 votes
I'm looking into landing my first deal within the next 6-9 months. I initially wanted to BRRR a multiunit (2-4 units) property but then started reading up on all the legal implications and hassle of managing tenants, dealing with evictions and so forth. I also know the risk of trying to flip a multiunit in a low buyers market like what we have presently and I don't want the property to sit for very long in that case. I wanted to know if there were any new beginners out there or experts that would recommend one over the other (This is going to be in the central New Jersey area btw). Thank you!
Rental Property Investor · Saint Louis, MO · Member since 2016 · 162 posts · 53 votes
10y
To help manage tenants, you need to have a good rental lease drawn up by a RE attorney. When you have a prospective tenant, you'll need to have a good screening process. The company I use for my Missouri rentals is based out of Illinois. Not sure if she does New Jersey. If you want to message me, I can send you her info.
With a properly screened tenant and a well written lease, the risks of eviction should be minimized.
The other piece of advice is that if a tenant is late with rent (3 days or whatever the time period is there), and hasn't contacted you prior, is to start the eviction notice. You don't have to evict, but they'll know they can't pull anything on you.
Remember, it's nothing personal. It's your business. If they don't pay you, you might not be able to pay the mortgage or buy the next property.
Rental Property Investor · Saint Louis, MO · Member since 2016 · 162 posts · 53 votes
10y
To help manage tenants, you need to have a good rental lease drawn up by a RE attorney. When you have a prospective tenant, you'll need to have a good screening process. The company I use for my Missouri rentals is based out of Illinois. Not sure if she does New Jersey. If you want to message me, I can send you her info.
With a properly screened tenant and a well written lease, the risks of eviction should be minimized.
The other piece of advice is that if a tenant is late with rent (3 days or whatever the time period is there), and hasn't contacted you prior, is to start the eviction notice. You don't have to evict, but they'll know they can't pull anything on you.
Remember, it's nothing personal. It's your business. If they don't pay you, you might not be able to pay the mortgage or buy the next property.
Investor · Englishtown, NJ · Member since 2014 · 76 posts · 20 votes
10y
since you are new at rei, you should buy a key turn property. hopefully you can get rented very quickly and reflect what you learned from it and continue the process. It's very important for a first timer investor to have a smooth first time transaction.
Banker · Philadelphia · Member since 2009 · 2k+ posts · 631 votes
10y
Hi @Sagar Naik,
I would always suggest Property Management for sanity reason and I own in North and Central New Jersey, residing in Philadelphia. I do also own a Property Management company in Philadelphia which I created based on my own need for management on my portfolio. At the end of the day, financially and cost benefit in multi family buying always have PM in place.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
10y
@Sagar Naik If you have come to the conclusion based on research that being a landlord isn't for you then I would not recommend trying to talk yourself into it.
As far as flipping multi family properties (2-4 units) here are some of the benefits and drawbacks:
typically less competition flipping multi families as opposed to single families. I know it is this way in Connecticut not sure about NJ. Work with a realtor that can provide you data on this.
On the flip side there are not as many buyers for multis as opposed to single families
When flipping a multi ask yourself this "will this property attract an owner occupant and an investor as potential buyers" if the answer is no you are now trimming that buyer pool even more. Again, a realtor with area knowledge should be able to guide you on this
Expect longer hold times but the flip side is let's say you have a 3 unit you rehab. You rent out the 2nd and 3rd floors. Now you have the rental money coming in to float your holding costs as opposed to a single family that sits vacant and has zero money coming in.
Keep the first floor vacant so it is easy to show and the owner occupant can move right in without any hassles and they already have the place fully rented (new investors like this for the most part). Any investor who buys will also like walking into a situation where the only unit they need to rent is the first floor unit.