All Forum Posts by: Shawn Mcenteer

Low income + high crime = Second job with minimal ROI

Even if the numbers look good on paper your time will be lost. Best advice I can give for new investors coming in to the market in New Jersey is: If deal looks very good today, its likely a headache tomorrow. If numbers look tight and with little to no ROI, deals tend to look much better year over year. Attracting quality might cost you more upfront but long term gains blow everything else away.

Welcome @Natalka Doblosky BP is great environment to learn

Hi @Boberg Beckloff anything Newark, NJ I would account for extreme laws that favor tenants. Raising rents is very difficult and evicting is very difficult.  

Typically I advise and teach clients how to systematically property manage to reduce that cost but being how Newark is with regulations it may be best to keep PM fee.  Good news is Vacancy tends to be low, I am under 1% on personal properties.  I think with Newark the turnover will be low as well becuase if tenants knows system, which most do, they can essentially live on property for many years without land lording legally being allowed to raise rents. Many tenants will get the rent the want and know it will not go up much if at all long term. 

 I agree.  Numbers look good on paper but the cost of dealing with tenants laws, which unfortunately most new investors are unaware of, make investing in Newark a nightmare long term.

Hi @Xavier Vazquez that's a great way to go. I have bought many properties using low money down loans meant for owner occupants.  Are you thinking of house hacking in order to reduce the cost of living?

Hi @Eli Berger $250k is an awesome start.  I'll let you know my wife and I got to Fi with far less saved up investing in New Jersey.  Similar to how the market looks today, when we bought our first multi in 2015 cash flow was scarce.  Every property we purchased did NOT cash flow on day 1.   What did happen was the forced appreciation which gave us larges sums or equity, raised rents and created desirable rentals attracting high income earning tenants.  These properties that did not look so great on year 1 all of a sudden turned into cash cows year over year.  

Long story short I really considered out of state and almost pulled the trigger a few times. Fortunately I stayed in NJ. Today our properties are all cash flow positive, running on auto pilot.  We are 10 years in yet to miss a single payment of rent. $250 can go a long way. If you are open to house hacking  $250k will stretch you very far.  

Hi @Francesco Filippi house hacking continues to be one of the smartest moves for new investors. NJ is great market for it, my wife and I got to Fi leveraging house hacking strategy and I now I help new investors get on the fast track and avoid the "Stupid Tax" I had to pay. Best way to start is connect with people doing what you want to do and repeat what works. I cannot stress enough to work with someone who has done what you want to do to avoid the guess work and implement a strategy. Live in one unit rent out the other is a great idea, its not a strategy. Finding the right property that will get you to your REI goals is the name of the game.

Hi @Arun Iyer BRRRR house hacking is how my wife and I got to Fi in New Jersey. Strategy is tough to beat especially in our market. Always happy to talk and share what has worked and help fast track your REI goals.

Hi @Preeti Sharma out of state BRRRR for starting out is a huge step. Not sure if you have renovated your existing home but just think about what it takes to renovate a property that you can drive to and have eyes on it compared to what it takes to renovate a property essentially in the dark. Tracking down GC, picking out materials, ensuring all this gets done without you being anywhere near the project.

I think you have the right idea with BRRRR, staying local to your market is a huge quick tip especially if you have a way to make house hacking work.

Hi @Rebecca Cho best bet may be to connect with REI people in the market you are in. I have all the systemization down for North Jersey. I give it to all my clients for free as thank you for working with me. I also understand their success is huge, anything I can do to ensure clients are successful landlords plays a huge part. Having a go to handyman in a market is huge asset, someone that can take care of odds and ends and not charge ridiculous prices is a game changer.