All Forum Posts by: Shawn Mcenteer

Quote from @Frank Martinez:

I'm 44 and been wanting to get into real estate investing for awhile now.  I live in central Jersey and have $14,000 saved.  I have a w2 job and my wife also has a w2 job.   I was looking into flipping houses to make more/quick money to build my capital but, the houses are too expensive here in new jersey. Looking to start small and then build up to get better properties.  I have 1 friends that also want to do the same.  We've talked about partnership to look for a houses to flip or to keep as rentals.  I've also looked out of state but, I'm sacred of not living close to the property if something happens and or getting scammed by management company or contractors.  

 Hi Frank.  Do you currently own a property?  Main Concern I have is funding the deal.  Unless you are veteran you'll likely need do to 3.5% down payment then on top of that have room for closing cost which tend to be over $10K.   There are options of seller providing concession or money towards closing fees but in many cases that makes your offer much weaker in competitive situations.  Having access to some more capital will go a long ways for you. Staying local and doing a house hack strategy tends to be smart move. You need a place to live, may as well be in an asset you own that has portion of it paid by your tenants. 

Hi @Andy S. I do not bank with Well Fargo so I cannot comment on them directly but when you speak with representative make sure you are talking with manager. I found over the years entire level employees at banks will sometimes confuse escrow account with regular checking.  Make sure to ask specifically for a tenant escrow account for rental.  Most banks will provide this for to honor relationship and keep your business. Long story short if someone charged me monthly fees on an escrow account I would simply take my business elsewhere.  I know Chase offers them, that's where mine are held.

Hi @Charles Lundquist NJ is very town by town with rental markets.  I'll let you know I have been investing for over a decade with buy and hold properties, I am yet to miss a single payment of rent or have to go through an eviction.  A lot of this has to do with the towns to invest in and the ones to avoid.  A nice way of putting it is Elizabeth is not one of those towns I consider to be landlord friendly.  You have the right idea and mindset with value add but there are markets that will be more favorable for land lording.

Well said @Peter W.  High demand give us as landlord a lot of control.  At the end of the day tenants will do everything in their power to avoid courts knowing very well it will make life very tough for them moving in the future.   Attract quality tenants, avoid warzones and majority of wacky laws have very little meaning

Quote from @Zachary Hayes:

I’m 21, living in New Jersey with my parents, saving about $2,000 a month, and not in a rush to move out. Given that I have low overhead and time on my side, what would be the smartest first real estate investment move I could make to build long-term wealth

Hi Zach house hacking is hands down one of the smartest and fastest ways for new investors to grow in just about any market. If done properly any new investor can be on the fast track to professional investing relatively quick. Someone like yourself saving up you'll be in a strong spot. It may be a little early for you to start REI (I could be wrong, lot has to do with financing) but I am always happy to connect with local investors stepping into REI for the first time to make sure you are set up and have clear expectation of what to expect. There are a lot of small little tweaks that can be made from the start that make huge difference long term; from the type of property to the type of loan. I have clients that ready to go right away and clients that take a few years before they pull the trigger none the less this is a process and if done right with long term success as your motivator there is no reason why you can be financial freedom in you 30's

Hi @Giovanni DiBlasio I have been house hacking for over 10 years in new jersey.  I am yet to have an eviction.  My mentor has been investing in NJ for over 30 years, he has 1 eviction and it was from a tenant he acquired with the property.  If you do the proper work upfront and know the areas with more favorable laws (NJ is very town by town)  I do not see land lording being an issue.  If you have the ability to house hack again going OOS is essentially restarting the process from scratch.  From the dozens of house hacking properties I closed on last year everyone is at a break even point minimum.  Most are increasing rents $100plus this year.  For myself I have clients moving out of one my units.  I will likely raises rents over $500 once they do, on another property I am adding a creative element to increase cash flow over $5k with out me lifting  a finger. Huge income state means potential for high paying tenants.  The fact of the matter is you have success here in NJ, you have equity which ultimately gets you to freedom over cash flow (I know this becuase I literally purchased businesses from the equity in my HH) it seems like you are rocking right now so repeat what you learned and get better. 

Well said @Zach Howard No matter the market you live in its tough to beat a House Hacking strategy. Even in a state like New Jersey, we have the highest taxes in the nation but we also have some of the highest rents. Not to mention those high taxes do not go away if you live in single family. One way or another if you know you need to live in a certain market and you want to start REI, its very rare to see a case where OOS is more beneficial.

Hi @Jackie Mcmorrow I get the attraction to out of state.  I was once in your shoes.  However I will let you know ultimately house hack in New Jersey got me to financial independence.  I will also let you know I have been a landlord for over a decade and am yet to miss a single payment of rent.  On top of this I close dozens of house hacking deals each year for clients who also have not missed rent payment, or have had to evict tenants.  NJ gets a reputation for being a tough state to invest in but most of the laws around it all apply to large unit apartment building.  1-4 units have different laws which tend to be more favorable for landlords.  On top of this knowing the towns to avoid play a huge part as well.

I also want to mention is the cost of house hacking can be substantially cheaper becuase of owner occupied lending rules.  You will get much better rates and you can put low money down meaning $1m property in NJ only requires $50k down payment while a $400k investment property will require minimum of $100k.

Last point I want to make is doing value add OOS is a massive undertaking.  Finding contract and team to handle the work is very tough.  Most OOS providers understand they make the money by increasing the value and selling you the turnkey property meaning they get all the gains while you have to hope for appreciation year over year.  Doing a value add House Hack locally is much easier to take on becuase you are living in the property, meeting with contractors, and have eyes on everything each day.  

Hi @Alberto Fernandez this is tough to answer over forums.  Really need eyes on property to know layout and rooms that require AC.   I will say though if you have duct work in place already replacing existing system tends to be most efficient route.  Also I will let you know I have multi house hacks none of which have central air but all attract high paying luxury style tenants so central air may not be a must.

Quote from @Roman Kevilly:

Hi, I'm just about ready to seriously look into real estate investing. I live in Brooklyn, NY and have saved up a good amount of money. We live in a rent controlled apartment so the rent is quite low. I've been trying to decide if the first property I buy should be a house in New Jersey as a house hack, or if I should purchase something cheaper in another state. What do you guys think would be the better first purchase? Any advice is appreciated.

Hi Roman, NJ House Hacking is great way to.  My wife and I got to Financial Independence leveraging house hacking strategies. Towns with direct line transit to NYC has been a blessing.  As to investing out of state or house hacking I can say house hacking is hands down one the best advantageous for investors.  For $50k you can get a $1m home owner occupying.  Anything you are not occupying will cost between 20-25% down meaning a $400k property out of state will cost minimum $100k to purchase.  

Leveraging owner occupied loans allows you to scale faster along with reducing your monthly expenses.  Moving property to property using 5% down loan is doable for those looking to house hack.