All Forum Posts by: Kendra Gaines

Not only are R-5 properties zoned for duplexes they are also zoned for accessory dwelling units which means if you find a place with a large enough lot you cant turn a single family home to a duplex AND build another house up to 750sq ft on the same lot. thats Three Units on the same lot! We just finished converting our single family home to a duplex. It only cost 30k and now the unit is renting out for 1200. This, I belive is a very under utilized strategy 

Hello Kendra! 

Cash on cash return - the annual percentage return you get back on your initial investment.

I think a good use of the years' time you've set before starting your investing is to get really clear on what you want to accomplish here. Understanding the lingo of real estate is very important so when you area speaking with brokers, realtors, property managers, etc, you can express yourself with clarity and assurance and you are taken seriously.  Before  you begin investing, you absolutely need to know what class of investments you are interested in and what kind of returns you want.  The neighborhoods, demographics, economics, are all important and affect your bottom line.  

You need to know who the players are on your team, even if you haven't yet built one.  You're going to need a realtor, a property manager if you don't plan to manage yourself, a lender, a broker for commercial deals, an attorney, an accountant.  Start asking for referrals now so when the time comes you can move quickly.

Start analyzing deals so you get real clear about what your goals are.  Do you want a cash on cash return of 10% or is that not good enough for you?  Is 100 dollars cash flow  per door enough, or do you want 250  per door? No one can answer that for you as we all have different metrics we use to determine a good deal.  The more deals you analyze, the more clear you criteria will become.

I'd get real clear on the financing side of things as well, as I think new investors spend a lot of time on analyzing deals but not near enough time understanding the lending side of real estate.  I'd recommend sitting down with residential and commercial lenders. Have them walk you through the underwriting  process.  Ask them what the ideal candidate for a loan looks like.  Have them help you calculate your debt to income ratio. Start saving up for cash reserves.  Good job on working on the credit by the way!

You're on the right track.  I'd suggest using the next year to really get educated about the ins and outs of investing, and getting your team members in place so that when the time comes and you find the perfect investment, you can move on it quickly.

Good luck!

I was at a meetup in Newark yesterday night and ran into someone who purchased his first investment in safer area of Newark!  30% cash on cash ROI.  So numbers do make sense if you make effort (this guy moved from Manhattan to Newark so he can make investment).  If you buy something, make sure you're ready for contingencies!

Being on biggerpockets is good start!  Inspiration is good but inspiration with action is much better!

@Kendra Gaines congratulations on taking active steps to move forward! Are you already in contact with a realtor or building your team to facilitate this process for you? The FHA loan is a good place to start with and utilize in building something.

It's a big plus that you are already working on your credit. Do you have a mortgage broker you are using to assist with financing and perhaps credit? 

What are your longer term goals? Have you looked at other markets than EO/Bloomfield/Newark? 

@Raj G. once I move out of my current MFR I will be cash flowing almost 1k/door. 495k purchase. taxes 8300. unit2 2600 unit 1 2800. I put about 60k of work into property. It is tough to find deals that work turnkey but you can find properties that need work or can be improved to gain better rent.