All Forum Posts by: Eric P.

all great points..  I was always told an exit strategy at the beginning is one of the most important things to have.  We'd look for something small, simple and cheap and use it more for learning rather than making money, though if we can do both that would be great lol!  even if we had to hold it till it sells lossing $ each month its only like $200 a month each, and if we have to sell for a loss it's again split.  Being this is a first there's more opportunity for things to go wrong, so just teaming up to spread the risk.  Once we do the first one and we learn all that's involved we may branch out to purchase our own

Me, my father and Uncle (Mr. money bags) are all interested in getting into real estate.  We all bring our own skills to the table, I'm computer savvy, able to find deals, and negotiate.  My dad is a handyman and my Uncle has a lot of capital.  We were all thinking of making our first purchase together, something small and cheap.  We figure by doing it this way it'll make it easier to learn and spread the expenses around.  Honestly my first deal I just want to get my feet wet and learn without getting discouraged if it doesn't go exactly according to plan. 

Obviously there's something to be said about doing it on your own so you don't have too many cooks in the kitchen, but what does everyone think about getting into your first purchase with others to help learn and cover costs?

I know once I finally jump into this I'm going to make mistakes and lose some $.  Its part of the reason I haven't jumped in yet.  I'm building a much bigger nest egg then whats really needed to get started.  This way when problems do arise it wont be as stressful and my emotions wont get in the way of my better judgment.  I look at losses no different than a college education, people take on $60k worth of student loans thinking nothing of it.  I wouldn't mind a $5,000 hit so long as it educates me and I don't make the same mistake.  

Looking forward to more stories so I can minimize those losses just the same lol

Do you do this full time or do you have a day job?  Whats your total cash flow positive numbers?  I'd like to realistically get to about $2,500 a month in cashflow with less than 10 units/properties.  That would give me and my wife the financial freedom we need to never have to worry if one of us ever lost a job, or anything like that.  I'm looking for my investments/money to bring us peace, not happiness.

Wanting to break into real estate investing in the next 1-2 years I'm going to regularly check this posting.  Learning from other's mistakes is a great way to prevent your own.  I often flip items with motors (boats, cars, motorcycles) They're almost always good for a minimum of 50% return, sometimes 200%+ Problem is those 50%-200% returns are usually only $500-$1500.. But I stay within my comfort zone and If it doesn't 100% meet my guideline, I pass.. something will always come along.  As someone above me mentioned its better to make 15% on something that requires almost no time than 20% on something that requires all your time.  

thanks for the advice!  I'm a pretty risk adverse person overall, but I know it takes some risk to get ahead so it's more about managing/limiting the risk as much as possible for me.  There was mention of reserves, I wouldn't even consider making a purchase without having a minimum of $10,000 extra put aside for when things go wrong and surprises pop up.  In all reality we probably won't be able to jump into this for another year unless I suddenly get a big bonus or something that helps quickly pay off my student loans and build a bigger reserve.  I'm just gathering as much information as possible right now.  

I don't know exactly how he gets around it.  Its very likely he is a lawyer and found some loophole.  Maybe the security guards stay on the sidewalk out front of the property so they aren't actually on the premises.  So if anyone is underage drinking and gets caught its their own fault and he can't be held liable.  

Honestly these proms make these beach towns a TON of extra money during the off season so the cops in the area usually just come to the parties, tell the kids to keep it down, and if anyone is really drunk they'll make them go to the hospital.  If the cops started arresting kids left and right kids would just start going to a different beach town taking all the $ with them.  So its actually in the best interest of the police/town to just be sure everyones being safe.  If they know that house has security guards they probably LOVE IT.

I'd be looking at a small cheap single family just to get my feet wet and learn the ins and outs.  We're located in South Jersey.  Normally NJ is very expensive, but if you're in a slightly "less desirable" area, not necessarily unsafe, just less desirable, deals can be had for $75k-$125k that need more surface work to look pretty rather than actual "WORK".  

For example: Willingboro and Mt. Holly are both nice towns, I'd have no problem driving through them at night (maybe not the "bad parts") my wife and I actually frequently go to dinner in Mt. Holly and walk around a bit on the main street at night.  They have plenty of cute single family homes around $100k that don't really "NEED" work.  And rents seem to be $1000-$1500 (Willingboro actually really interests me, my grandparents lived there for many years, there are plenty of houses priced below $125k and rents all seem to be $1,500-$1,800 which would = a lot of cashflow).  

I think this would be a great stepping stone to get my feet wet and its not far from where I live.

I figure a $80k mortgage with taxes will cost around $750 throw in another $200 for the extra surprise.  I should be able to float this place for $950 a month if I ever had to..  But I'm slightly risk adverse so I'd likely have 6 months of bills in a separate account for the home anyway.

My wife and I want to get into real estate investing.  We also want to start a family.  I was looking at our budget and assuming we have a kid this year after all our bills, expenses, fun, daycare, everything we should be left with around $1,500-$2,500 each month (depending on raises and how quickly I get rid of my $400 student loan payment).  My goal is to start buying less expensive properties, where if they were ever vacant a few months in a row I can float the payment with my salary without having to worry..

I'm curious where I stand vs. other investors when they started out.  What was their monthly cashflow from their job after all expenses and how did that help with breaking into real estate investing.

I feel confident we're in a good place, and once we have a little more money squirreled away and those student loans are gone we should be able to purchase our first rental property.. Eeeek!.. I just want to make sure I'm not being unrealistic or blinded.  Unfortunately I don't yet have a real estate mentor, tho I'm working on that.

One of the most amazing Real estate investments I ever heard of was actually a Beach vacation rental here in NJ.  Guy bought a big old house with like 7 bedrooms.  Nothing special, probably got it for real cheap cause its ugly.  He rents it out in the summer, usually to younger people, old friends getting together after college, big families who don't have a ton of money but need a lot of space.  The summer rentals get him close to breaking even.  But the big money... Proms..  Here in NJ it has been tradition for at least the last 20 years for Highschool kids to rent big houses down the shore and party all weekend after prom.  This genius investor charges by the kid, like $400 a head for the weekend.  He then hires a security company to guard the house and hand out wrist bands.  They only let a certain number of people in the house, and if the police come the security guards let them know they have everything under control.  Parent's love it because they know their kids are safe, and aren't going to drink themselves into a coma.  Kids love it cause its a giant house where they can party and not get in trouble.  My brother and all his friends rented it on their prom.  There ended up being like 30 of them.  That's $12,000 for the weekend during the OFF SEASON!  He usually rents it every weekend during prom season which is about 6 weekends in a row!!  Yes the kids usually do a number on the house, but he has painters and handymen that come in and fix everything plus he collects a deposit.  Even if they do $5,000 worth of damage he's still walking away with like $6-7k after paying the security guards and added insurance..  Once I break into realestate investing I'm going to give this a shot if kids in NJ still go to the shore after prom.