Hello from newbie in NJ

4 Replies

Good morning from northwestern NJ. I am a mom to two young boys and owner of a bookkeeping company. My husband and I own 3 properties (one is our current home), only one of which cashflows. We are looking to expand our portfolio, though we are unsure what our next step is. Ultimately we want to replace my husbands ft income as well as build longterm, generational wealth for our family. 

Our area is rural, and pricey. We've thought about some single family rehabs but nervous about getting the 203k loan... not only for the rehab process but also because I do not have w2 income and we already have two mortgages. Feeling a little overwhelmed I guess.... but excited for the future. 

@Michele B. took the words right out of my mouth. Why does only one property cash flow, and if the goal is to replace a salary, how do those non-cash flowing properties help meet that goal?

Quick story on me, I became an accidental/on-purpose landlord with my first home purchase. I rented out my bachelor pad after my wife and I purchased our "forever home" and it never cash flowed. For me, it was about having a property that would gain traction in the market. But the property would never do that because of its design and limitations, so in order to make money, I'd have to either create more space/more bedrooms, or wait for the area to improve. Neither happened, I sold it, and found a property that should net me cash flow return of 8-10% per year, conservatively. It isn't a home run, but it cash flows even at a conservative underwriting level.

Being unsure of your next move is never OK, in my opinion. It tells me that your plan isn't set, so you're a wayward ship right now. I was in that rut for a couple of years, so learn from my mistake. Set the goal(s), and then compare your current spot to your goals and find the gap. Once I did that, it became clear my bachelor pad was never going to cash flow, and I was better selling it, taking the proceeds, and buying something that will cash flow.

Also compare your goals to your area -- I live in Philadelphia where unless you get properties at a discount, or off-market, you are buying at a premium, and are banking on major appreciations in the regional real estate market (which in Philly, can happen on a block-to-block basis) which are not a given. Thus investing locally for me only makes sense if its in line with my goal of cash flow, to help bring me closer to the next property.

If your goal is cash flow to retire, you've got 66% of your business giving you the middle finger on that goal right now. Figure out how to make it profitable, or dump it.

@Joe P. same sort of boat as you. One property doesn’t cash flow because it was our first home and while we got a decent deal in 2010 the market sank a little lower. We would love to sell but 1. the market isn’t quite were we’d like it to be 2. the association is in litigation and we’ve been told some lenders have an issue with that. So we wait. 

Hello! @Michelle Travers

Welcome to BP, and congratulations on making the decision to invest in your future via real estate.

I have written a few blog posts that may help you get started here on BP, and with your investing. Please click on the links, give them a read, and share your thoughts in the comments.

First is a post that I feel will help not get overwhelmed with the amount of info that is here on BP:

https://www.biggerpockets.com/blogs/5868/52761-the-simple-guide-to-getting-started-on-bp

The second is a post that will help get you focused with your real estate investing goals:

https://www.biggerpockets.com/blogs/5868/52743-im-new-to-bp-any-advice-would-be-appriciated

The last one is a post that will help you choose an “investor friendly” real estate agent.

There are many agents out there, but it’s important to choose the right one.

https://www.biggerpockets.com/blogs/5868/52724-im-new-to-investing-how-do-i-find-an-investor-friendly-agent

I love answering questions if you have any! Good Luck :)

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