Rental Property Investor · Monmouth Junction, NJ · Member since 2020 · 7 posts · 2 votes
Hello, I'm new to the real estate lifestyle but I'm actively educating myself. I do know that I would like to build a portfolio of Multi-family homes and maybe a flip here and there. I'm currently working in the New Jersey market and really considering a hard money loan or private. Any advise that will get me off to the right start?
Be very careful of hard money when starting. There are too many things that can go wrong and you don’t know what you don’t know. You would be much better off to partner with someone with experience and split the profit on your first one or two. The amount you end up sharing with a partner will be worth so much more in the long term and much less risky.
Private money is more about the people you know who trust you and will give you money on the strength of that trust. You want to be real careful using that kind of money getting started unless you're confident that you're qualified to handle it.
Although people talk about partnering starting out, be careful. There are a lot of horror stories of people who got into a bad partnership or ended up having a negative experience. I think starting out it's generally most desirable to use debt (e.g. hard money) than give up equity to partners, contractors etc. It makes it much clearer what everyone's role in your transaction is and what you expect of them and if things don't work out you can always get rid of them. That could be more difficult when using grandma's money or partnering with your buddy who's an electrician.