So confused and nervous

New Member Introductions
7yFollow

So confused and nervous

David Brooks
Member since 2019 · 2 posts · 6 votes

Hi all, been doing a lot of research into REI and want to get my first investment as fast as possible. I am too nervous to reach out to a realtor to help or make an offer. I am confused as to where/how to find a deal. I live in Northern NJ, specifically, Hoboken and the area around me is very expensive.

I am a young guy, upper 20s, accredited investor and have a good amount of capital from stocks. I would ideally like to start with around $100k max budget whether that be the full purchase price or down payment. But once again, because of the area in which I live, I haven't found anything yet. I have looked out of state, but am struggling with the idea of just wiring some random person a good amount of money. This is also part of the nervousness.

I have an LLC that everything would flow under and am mostly looking for cash flow and depreciation benefits to continue building my REI empire. I would like to double my properties every year. That would be my real estate goal.

5Reply
39 views

Most Popular Reply

Account Closed
Real Estate Agent · Philadelphia, PA · Member since 2019 · 7 posts · 7 votes
7y

@David Brooks Hi David, I completely understand your hesitation just starting out. There are a lot of moving pieces to consider especially when you're working on your first deal. Don't get overwhelmed, you're on the right track! Getting your LLC set up and your finances in order is great first step. Hoboken & New York City definitely have smaller profit margins compared to other cities, such a Philadelphia, so I understand why you're having some deal flow issues. Don't be afraid to reach out to agents. They can be a great resource when starting out especially when trying to identify a target market. If nothing else it's nice to get their perspective on things. I'm a licensed agent in the Philly area and I specialize in investment properties. Feel free to reach out with any questions!

4Reply
See this reply in the discussion

19 Replies

Jump to latestLatest
  • Dieudonne T.
    Investor · Des Moines, IA · Member since 2019 · 62 posts · 17 votes
    7y

    @David Brooks

    The currently reading (the book on rental property investing by Brandon Turner) has very detailed plans that may help you with REI, it's fun and easy to read if you've not Read it yet u may!

    Good luck to ya!

    1Reply
  • Jim Goebel
    Real Estate Investor · Des Moines, IA · Member since 2016 · 922 posts · 533 votes
    7y

    @David Brooks

    I'd rightfully be nervous about wiring funds to someone to handle stuff.  If you're not going to put the pieces together yourself, including the closing, and figuring out how to make the time you need in the area you're investing in, you're doomed.  Just do some searching on folks with out of area horror stories and you'll hear enough reason to be nervous - and enough examples of what not to do.

    Doesn't make it easier; but the choice to live comes with consequences. REI is something for the already established, usually, in high priced markets, or the active 'doer' that is doing active re-development or fix and flips. The passive investor - not so much. The out of town passive investor, well - with capital, they are regarded as a mark by many. For contractors, they're hard enough to get to do what you want when you're right there cracking the whip...

    0Reply
  • Account Closed
    Real Estate Agent · Philadelphia, PA · Member since 2019 · 7 posts · 7 votes
    7y

    @David Brooks Hi David, I completely understand your hesitation just starting out. There are a lot of moving pieces to consider especially when you're working on your first deal. Don't get overwhelmed, you're on the right track! Getting your LLC set up and your finances in order is great first step. Hoboken & New York City definitely have smaller profit margins compared to other cities, such a Philadelphia, so I understand why you're having some deal flow issues. Don't be afraid to reach out to agents. They can be a great resource when starting out especially when trying to identify a target market. If nothing else it's nice to get their perspective on things. I'm a licensed agent in the Philly area and I specialize in investment properties. Feel free to reach out with any questions!

    4Reply
  • Stephen Kappre
    Real Estate Agent · South Jersey · Member since 2017 · 252 posts · 143 votes
    7y

    I'm quite a bit south of you, but if you want to sit down one day and chat we can go over some recent investor purchases (buy and hold or flips) and discuss what has worked for others. $100k is plenty in South Jersey if you know where to look. :) 

    1Reply
  • Roni E.Pro Member
    Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
    7y

    @David Brooks

    As you have done well in stocks do your research. I would take you home zipcode and map out a 40 minute drive from home. Then look at multifamily investment 4 units or less. Then let's $100k is 25 percent down so max purchase is $400k. Then see what is an acceptable cap rate for you and go from there.

    0Reply
  • Susan K.
    Real Estate Agent · Palm Beach Gardens, FL · Member since 2017 · 205 posts · 124 votes
    7y

    Be very careful with wiring any money, and certainly not to some random person. Use a real estate attorney or a reputable title company for your transactions. Even then you need to make sure your wire is not being intercepted. Crooks can hack a title company email (or set up a similar looking one) and change wiring instructions in a heart beat. If you have wiring instructions that are emailed to you, call the title co or attorney and verify via phone what you have received via email. Try to find a realtor that will set up some automatic searches on MLS with your criteria. Most will do this. It will help you sift through the inventory and learn the market. You can learn areas by using Zillow as well. Some of the Zestimates may be off but for the most part it is pretty accurate. Good luck. Remember everyone starts somewhere.

    0Reply
  • Brendan Markle
    Newtown, PA · Member since 2018 · 172 posts · 81 votes
    7y

    I completely agree, I wouldn't be too keen on wiring money out of state, especially with the upsurge in wiring fraud lately.  I am an investor and agent in Philadelphia, and would love to answer any questions you have- there are still great deals in the city if you know where to look.  

    One question I would have is if your LLC has any track record- if not, it will be very difficult to get a bank to give you a loan through the LLC.

    1Reply
  • Jimmy O'Connor
    Real Estate Agent · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes
    7y

    Hey @David Brooks! I have seen an influx of investors from your area migrate down to Philly for that exact reason. 100k is a very doable price range down here. If you're looking to go out of state and close on a deal quick, make sure you contact NJ's state department to get a "Certificate of Good Standing" (states may call it different things) which is required when title insurance is being provided to an out of state investor. While you're looking at other states/counties, make sure you study up on the nuances of closings as that can affect what your actual profit can be. (I.E title closing vs lawyer closing, differences in transfer taxes, etc). 

    Totally get your reservations about wiring money to a person you never met, especially when you are just getting started. As an agent/wholesaler, that makes me uncomfortable even working with buyers that do that when I don't even know if they are capable closers! I personally only work with people I've met face to face, but I'm old school. 

    1Reply
  • John FortesPro Member
    Multi-Family Syndicator · Abington, MA · Member since 2017 · 603 posts · 347 votes
    7y

    Good ole paralysis you are dealing with. First thing you need to do is make sure you are confident in your understanding of real estate or even passive investing. Continue to educate yourself about real estate and networking. You struggle with the idea of wiring funds but if you put it another way, how did you fund your stocks to achieve what you have today? Had to come from somewhere, right?

    Finding a company that you feel comfortable with is the key. Making sure you can connect and receive all the right communications, If it doesn't feel right then move on. That would be my advice if you were to invest in a syndication as a passive investor for cash flow and tax benefits per your mentions.

    If you are seeking to purchase your own single family or small multifamily, you need to start having conversations with brokers. Get over that hump of your fears and nervousness and just make the call. If you really want to make sure you are ok with your knowledge on a call, call a broker in a market you have no interest or minimal interest in and just start the conversation. Also, reach out via email as well to start the conversation to get the ball rolling. You are the only thing holding yourself back. Looking forward to hearing your success story in a few years. 

    Good luck and happy investing!

    1Reply
  • Roni E.Pro Member
    Specialist · Earth 2.0 · Member since 2019 · 598 posts · 271 votes
    7y
    Originally posted by @David Brooks:

    Hi all, been doing a lot of research into REI and want to get my first investment as fast as possible. I am too nervous to reach out to a realtor to help or make an offer. I am confused as to where/how to find a deal. I live in Northern NJ, specifically, Hoboken and the area around me is very expensive.

    I am a young guy, upper 20s, accredited investor and have a good amount of capital from stocks. I would ideally like to start with around $100k max budget whether that be the full purchase price or down payment. But once again, because of the area in which I live, I haven't found anything yet. I have looked out of state, but am struggling with the idea of just wiring some random person a good amount of money. This is also part of the nervousness.

    I have an LLC that everything would flow under and am mostly looking for cash flow and depreciation benefits to continue building my REI empire. I would like to double my properties every year. That would be my real estate goal.

    I would start to read some real estate investing books, and digest a lot of data. From there if there is a state you truly want to invest in then see about getting your real estate license in that state. 

    0Reply
  • Account Closed
    Rental Property Investor · Oaklyn, NJ · Member since 2018 · 18 posts · 9 votes
    7y

    David,

    Thanks for sharing this post.  What you don't realize is that everyone that's ever started in real estate has been in your shoes and putting this post is one the best things that could help you get started.  Look at the responses already.  You have a ton of capital and the quicker you learn the sooner you realize how well off you really are.  Here are things that helped me take action.

    1) Never be afraid to ask any kind of questions to RE investors of any experience.  The sooner you get comfortable with this, the quicker you'll learn and grow. (That means Agents too!)

    2a) Read and listen to everything and everyone about real estate.  Podcasts, Books, Random Articles on BP.  Someday this info may be relevant and you can take something from these.

    2b) Keep looking for a property at the same time.  Learn as you go and take the plunge as you educate yourself.

    3) Network. 1 on 1 coffee meetings, Local REI Groups, Shoot some messages to people here on BP in your market. Friends are made by conversations.

    Best of luck and you're not alone.

    Ethan

    0Reply
  • David Brooks
    OP
    Member since 2019 · 2 posts · 6 votes
    7y

    Thank you everyone who wrote back! I will be taking all of the advice and applying it in my journey. Will definitely be reading more and asking questions.

    Glad to hear that some other people have had a similar experience to me.

    1Reply
  • Alyse Oz
    Member since 2018 · 60 posts · 10 votes
    7y

    It seems you suffer from "analysis paralysis" -----  I suffer from the same thing :)  After years of talking and thinking I finally made the leap.  I figured even if I make a mistake, it's better than doing nothing.  You learn a bit as you go :)  then you die :)

    I finally purchased my property and now I need to decide on who to trust for rehab.  It's not easy! I've met quite a few characters.  I think I just have to take a leap and go with one who creeps me out the least.....kind of like my decision on who to marry :)  At some point you just have to do it.  Life is about making decisions and making mistakes I suppose.  

    I'm originally from NYC as well.  Although I love NYC, I thinks it's way overpriced.  Even if I had tons of money, I would stay away.  I've been saying this for years though and it just keeps on appreciating, so I can def. be wrong.  I'm not a big fan of New Jersey either....mostly because of the insane taxes.  

    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    7y

    David, if you invest out of state, make sure you plan a trip to the area and go and look at places with an experienced realtor.  Think of places that you know whether you spent time there growing up, going to school or lived there.

    0Reply
  • Troy Sheets
    Developer · Philadelphia, PA · Member since 2013 · 1k+ posts · 902 votes
    7y
    Originally posted by @David Brooks:

    Thank you everyone who wrote back! I will be taking all of the advice and applying it in my journey. Will definitely be reading more and asking questions.

    Glad to hear that some other people have had a similar experience to me.

    Hi David,

    I sent you a PM but if you have any interest in Philadelphia, I'm happy to grab coffee and chat. 

    0Reply
  • Troy Sheets
    Developer · Philadelphia, PA · Member since 2013 · 1k+ posts · 902 votes
    7y
    Originally posted by @Alyse Oz:

    It seems you suffer from "analysis paralysis" -----  I suffer from the same thing :)  After years of talking and thinking I finally made the leap.  I figured even if I make a mistake, it's better than doing nothing.  You learn a bit as you go :)  then you die :)

    I finally purchased my property and now I need to decide on who to trust for rehab.  It's not easy! I've met quite a few characters.  I think I just have to take a leap and go with one who creeps me out the least.....kind of like my decision on who to marry :)  At some point you just have to do it.  Life is about making decisions and making mistakes I suppose.  

    I'm originally from NYC as well.  Although I love NYC, I thinks it's way overpriced.  Even if I had tons of money, I would stay away.  I've been saying this for years though and it just keeps on appreciating, so I can def. be wrong.  I'm not a big fan of New Jersey either....mostly because of the insane taxes.  

     Send me a PM, I can try and give you a hand with the contractors or a GC. 

    0Reply
  • Account Closed
    None · Member since 2018 · 125 posts · 46 votes
    7y

    @David Brooks you are certainty not alone! Spend time on this site and utilize it's resources, like the podcasts, and check out books The Book On Rental Property Investing and Long-Distance Real Estate Investing.  I guarantee if you spend one or two months reading those two books and listening to podcasts (I can knock one out per day on my drive to and from work), you'll feel a lot more comfortable. 

    Also, remember that it's free to utilize a real estate agent to check out some properties, hear their insights and have them set you up with automated emails that will alert you when a property goes on the market that meets your criteria! It can be intimidating at first to call an agent and ask, but they should be more than willing to set you up with this service - it's free for them and they'll know they have another possible buyer.

    Best of luck!

    1Reply
  • Ariel Castillo
    Rental Property Investor · New York, NY · Member since 2019 · 28 posts · 6 votes
    6y

    @Troy S. Hey , can I get that info on GV / contractors ? I’m looking to purchase in philly and I rather be ready than purchase and start looking for one.

    0Reply
  • Troy Sheets
    Developer · Philadelphia, PA · Member since 2013 · 1k+ posts · 902 votes
    6y
    Originally posted by @Ariel Castillo:

    @Troy S. Hey , can I get that info on GV / contractors ? I’m looking to purchase in philly and I rather be ready than purchase and start looking for one.

    Happy to try and help, send me a private message with what you might need and I'll see who I can refer.  

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free