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All Forum Posts by: Joseph Guzzardi Jr

Joseph Guzzardi Jr has started 18 posts and replied 345 times.

Post: Facing Negative Cash Flow While House Hacking – Looking for Advice

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136
Quote from @Beck DeYoung:

I’m struggling to wrap my head around the reality of negative cash flow. I’ve been exploring multi-family properties for house hacking in both the Philadelphia and Boston areas for several months, focusing on the cheaper areas around the cities rather than in the cities themselves, as housing costs are incredibly high. Despite this, every analysis I’ve done shows not only negative cash flow while living in the property (which I expected) but also significant negative cash flow even after moving out and renting all the units.

While I’m living there, my housing costs would be higher than they are now because I currently rent very cheaply with three roommates. Having them join me in the house hack isn’t an option, as I can’t afford a place with enough bedrooms in a single unit in the areas I want to live. So, it would just be my partner and me, which limits our options in the neighborhoods we’re comfortable with. I’m also at a life stage, where I’d prefer to just live with my partner and not rent out individual rooms in my unit.

When I move out, the rental income would sometimes just barely cover the mortgage and taxes (usually not even insurance). However, this is what many real estate books call “phantom cash flow,” which is considered a red flag. After moving out, I’d still be out of pocket $750 to $1,500 a month to cover vacancy, capital expenditures, maintenance, and property management. And on top of that, I’d be paying rent or a mortgage somewhere else.

I understand real estate is a long-term investment and that appreciation and equity plays a role, but losing money month after month, even post-move-out, is hard to justify. One of the main challenges is that I can only afford to put 5% down, which would leave me tied to this property’s expenses for the foreseeable future, making it harder to pursue other investments.

All of this said, I’m really struggling to stay positive about investing right now. It just doesn’t seem viable unless I wait a year or two to save more for a larger down payment. Any advice or insight would be appreciated, with the focus on the current situation (I’m not looking to move somewhere else). Thanks!


 If you are looking to house hack, you need to consider your "net total out of pocket expense" compared to simply renting or buying a single fam in that same scenario with you & your partner. Your net should be less overall. Other feedback on here is correct; putting 5% down on a multi and expecting to cashflow within 12-24 month is not exactly realistic many times unless you are buying a steal of a home. 

Rents will continue to rise year over year if you keep up with your property and if you hold onto the multi long enough you will eventually cashflow once you decide to leave. 

You can also get creative, YOU ARE LITERALY USING THE SAME FORMULA TODAY! 


Rent the entire 2 family out by the room and I bet your cashflow will increase significantly. 

Post: How do people invest in real estate while working a full time job?

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136

@Ben Stanley

Blood

Sweat

Tears......

Some sarcasm here ......

Leverage, partnerships and busting your tail.

Post: New Investor with $100k - Where would you start?

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136

@Tanner Sortillo The number one answer is it depends on the investors goals.

How active does the investor want to be?

What returns is the investor looking for?

What is the timeline of that return?

Answers to these will get you the answer to next steps.

Post: Tenant doesn’t want to place TP in waste basket

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136

@Nadir M. Good luck getting your tenant to place TP in a waste basket. That's pretty wild in my opinion.

Your best bet is when you renew the lease to add in a clause regarding plumbing repairs related to negligence of the tenant. Or general repairs of $300 or less.

You should ensure however your plumbing is actually in good shape. You may need to bite the bullet the next few months until the lease is up.

Post: Seeking Inspector+ Trades in San Antonio Tx

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136

Hey everyone,

I am in the midst of my first out of state purchase and business venture. I currently own multiple properties/buildings out in NJ but am in the process of acquiring 2 homes in the San Antonio area, specifically for Assisted Living.

I am seeking referrals for property inspectors, as well as trades including plumbing, electric, handymen etc .

Thank you in advance.

Quote from @John Bertolon:

Shortly after acquiring this 7-unit property, I ran into one of the tenant's who asked if I could replace her showerhead. She's been at the property for 15+ years and said it's never been replaced, so I felt this to be a reasonable request. I took care of it.

I also recently sent out rent increase notices, and now I got a request from a different tenant to replace a refrigerator because it's "rusted on the front and side." Apparently they have painted over it and it works fine....

A third tenant recently asked me to come by to look at something in her apartment. I haven't met her yet, but can only expect a request to come out of this as well.

At the end of the day, I want to address the basic needs of my tenants, but I can't help thinking that either that people got word of the original showerhead I replaced, or they're just taking advantage of the rent increase. With the refrigerator, my fear is that the other tenants will see the appliance guy show up and race to get in line for their new fridge, too.

Thanks in advance!


 My Guess is these are likely small enough items/repairs that probably weren't looked at too deeply or considered during the due diligence and inspection, which I would totally understand. I can't say I would be looking near the bottom of the fridge or a showerhead either when I am walking a property. I am typically looking at larger more expensive items.

What I have typically done is once I am officially owner of the property, I will ask each tenant to name me 1-2 items that need to get repaired/fixed/remedied right off the bat. Usually its something small unless I already knew something was up with the unit. Get it taken care of and usually keeps them happy as the prior owner likely didn't do this. 

@Michael Belz I have land without plans in a c2 mixed use zone in Newark if you are interested.

Post: Anyone concerned about a pandemic sequel?

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136

@Alex Silang I'd only consider a STR that makes sense with a long term tenant.

Also sec 8 is a great model if a pandemic or loss of income is a concern.

Post: $5000 to start with where should I invest

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136

@Javaughn Harkness Invest in yourself. Find a mentor who is doing exactly what you want to do. And make sure you vet them.

Post: What do you think makes a good property manager?

Joseph Guzzardi JrPosted
  • Rental Property Investor
  • Posts 361
  • Votes 136

@Nina Penuela Communication & response time based on tenant/property issues.