All Forum Posts by: Chris Masons

Is there any written contract with terms?

Assuming this isn't his first deal either did you check any references?

Where did you find this person? Be very careful as a remote transaction raises a lot of red flags.

Thx

Chris

Welcome Karolis.

This is a great place to learn how to invest PROPERLY in RE. I work for an accounting firm in NYC as IT professional. I have learned a lot working around accountants.

I live in Somerset county not too far from you and invest in Union County and Somerset counties.

Good luck and let me know if I can help you with anything!!

regards,

Chris

Hi James,

Are you evicting the owners of the property or tenants? I assume tenants have no lease in place with prior owner?

You need to send a notice the cease than a notice to quit prior to filing the judgment for possession I believe but am not 100% sure. I j have been through eviction process several times but it was for no payment which is much more cut and dry and simple...

I'd be interested in hearing what others have to say as I am not sure what the cause for eviction would fall under in this case?  Trespassing??

thx,

Chris

Hi Aniket,

Going from 4 units to 5 units IMO would be a big headache as zoing status changes from residential to commercial.

Up to 4 families is still considered residential, once you go to 5 units you are now commercial. Not to mention lending guidelines completely change as well....

If you have no experience I suggest get your feet wet with some rentals and learn the business before taking on a project of this magnitude.

thx,

Chris

Another reason why you would invest in your own deals VS a private REIT is that YOU are FULLY in control of the asset! If you know your market you can do much better owning the asset, collecting a 15% or higher return.

The beauty of this is at some point that asset will be paid off or even halfway paid down and you can sell and generate a large influx of cash to further invest or put towards something else.

I own publically traded REITS as well and love them but they cannot match the returns I generate myself by owning and controlling the asset myself. If you know your market and know what youa re doing you can generate 18 - 20% cash on cash returns. I do not think this is achievable with a REIT - well at least an equity REIT, a mortgage REIT is a whole different story....

thx,

Chris

hi Tim,

being an active real estate investor doesn't give you the ability to deduct unlimited losses against other income on a yearly basis.

In order to be able to deduct more then the 25k passive allowance one needs to be a Real Estate Professional. There is a difference between Actively participating in your investments and bring a real estate Professional.

Just be careful and know the difference.

Chris

Lets be clear, I self manage 13 properties  ~ 20 doors. While the income is passive from a tax standpoint, it is not like owning for example stock in AT&T where you sit back and collect your ~ 4%dividend - that is truly passive.

There is definitely work involved, sometimes very little and sometimes it can be a part time job, but unlock a security such as a stock or a MLP or a REIT that you have no control over that pays you dividends and distributions, you're in direct control of your asset and directly can influence it's value as well.

There is a trade off here. I invest in the stock market as well - in fact a good portion of my income from Real Estate goes into the stock market as I like diversification but if I could only choose one it would be Real Estate..

Chris

Hi Ben,

Sometimes it's not as easy to turn things over to a management Co. I honestly feel that NO ONE will look after my properties as well as I do, or will have my best interests as much as I do. Sometimes it's the small things that matter I also like having a pulse on my tenants and property as I can foresee things before they happen . This is just my personal opinion and I am not saying a management CO doesn't add value as I am sure it does. But for me I am not there yet and still trying to maximize my cash flow while working full time so I can hopefully retire early and at that point when the bulk of my properties are paid off or down I can enlist the services of a management Co as I will be cash flowing substantially more then I am now and can afford to pay 7,8, or 9% of gross rental income to a management Co so that I can enjoy retirement.

Sure it's hard work sometimes and sometimes there are days when I curse and yell but at this point I feel it is important to be on top of things and work harder now so that I can take it easy later.. I am 43 now and hope to be able to quit my day job at ~ 55

Just my opinion...

thx,

Chris

Hi Craig,

10k is a lot of income AFTER taxes AND operating expenses. This will take time, a lot of work but can be obtained if you really put your mind to it. You will need to make sacrifices and be very diligent and savvy.

I got started at your age. I bought my first property which was a 4 family @ age 22. The rest of my properties are all smaller (combination on 2 families, single families and more recently condos)

I am 43 now and have a portfolio of properties that throw off nice cash flow every month. I self manage and I am still in the accumulating phase and still am using leverage to my advantage. I also work full time so it can definitely be challenging! I only have a couple properties paid off. In this low rate environment you should take advantage of leverage and utilize it the best you can. These interest rates can really boost your net return.

Good luck!!

Chris

hi

I live in Somerset county and work in NYC as well. Welcome you are in a great place to learn about real estate investing.

If you don't own currently a great way to start is to owner occupy a 2 family. Great way to get your feet wet.

Good luck

Chris