All Forum Posts by: Matt Faircloth

@Donald Pasquariello  - welcome to BP.  I saw you are in South Jersey and looking to connect with others in the area - you should check out SJREIA - they meet in Cherry Hill for the main meeting and also have subgroups around the state.  I run the Mercer County group.  It's a great organization with a strong mix of seasoned investors and new investors.  If you decide to attend a meeting be sure to say hello.

Matt

Sounds like it was a great meeting!  Sorry I missed it.  I hope there is another one soon!

Hey Victor,

I would look towards Mill Hill, Chambersburg, Villa Park, and Franklin Park for multi families.  There are also some good ones in West Trenton but you would need to stay on the major roads, the side streets in that area get a little dicey.  I hope that helps!  Shoot me a message if you want to talk more.

Matt

Hey All,

We have a row of (5) 4 unit apartment buildings in NJ that I was thinking of approaching the local township to get approval to convert them to an age restricted building (55+).  I don't think we would offer much in the way of amenities and there is not community room on site.  We would be looking to do it strictly as a management play.  The units are not large and the second bedroom in the 2 bedroom is really small so it works for those that are down sizing.  Also our best tenants are older - our problems are coming from the younger tenants.

I'm curious if anyone out there has done a conversion of an existing building into a 55+ and how it changed the management requirements of the building.

Thanks!

Matt

Hi Corey,

This is a good debate question and one I've had with other investors over the years. We own SFH's and also mid sized multi families. I find that 1 bedroom apartments are far and away a better rental versus a 2 bedroom. I have one tenant that's been in his 1 br apartment since 1997! Although a young professional will eventually get married and start a family and move out, there are a ton of people that are past that stage of life. Those people will move into your 1 bedroom and drop anchor long term.

2 bedroom apartments have given me heartburn over the years.  The biggest factor?  KIDS.  Kids are pretty much noisy messy maniacs that don't do well in confined spaces.  They will ruin your rental and tick off the neighbors at some point.  And this is coming from a guy that has a 1 year old son!  We don't do student rentals so the majority of tenants we get for our multi bedroom units are families with kids.  In some of our areas the tenants are a bit tight on income per month so they will rent a 2 bedroom and put 2 kids in one room.  There are of course exeptions to this rule and we have some families in our apartments that are no problem at all.  But probability says you will get a few rambunctious kids in your apartment building that will give you an occasional headache.

I hope that helps!

Matt

Hey Dan,

You really pose an interesting question as you limit the investment to cash only - no financing and no partnerships.  This really forces some creativity!

Here are some options:

1.  Buy property in a lower priced area like Trenton NJ per @Victor Barcik 's recommendation.  Trenton is my primary investment location and its hard to beat the returns as the properties rent very well versus the purchase price.  That being said, my concern is that the purchase will take all that $25,000 cash with no money left to rehab the house or for reserves.  Trenton houses do sell for $25,000 or less but most need work at that price.

2. Would see what you could do to double it up in 6 months.  The best way to do that is to invest in some marketing as @Cecil Russell  recommended but I wouldn't go so far as investing in infrastructure to setup a long term business .  I am not a big fan of Wholesaling long term and wrote a whole article about it on BP recently, but it can be a means to an end.  If you can turn the $25,000 into $50,000 and then into $75K or $100K, you can use that seed capital to build long term wealth through rentals.

I hope that helps!

Matt

Hey Mark,

I think the area around the train station will change for the better in the next 2 to 3 years.  There are several projects in the works over there.   Also Mill Hill is strong, as is the section of South Broad that runs through Mill Hill - the 200 block to the 400 block.  Further out on timeline for redevelopment is the area around East Hanover - what I like about that district is that there is a really solid housing stock and a group of artists have started to take over part of that area.  It's really challenged with crime right now which is why it needs more time to develop.

I am always available to chat more about Trenton, let me know.

Matt

Hey Nathan,

What kind of work are you looking to have done?  I have a few to recommend but it depends on what you need done.

Matt

Hey David,

Thanks for sharing this.  I am an active investor in Trenton and am hopeful for this program to add more homebuyers to the pool.  The city of Trenton owns well over 1,000 homes and multi families so I'm all for finding a way to get them back on the tax rolls. 

The problem I see is that these properties are shells.  They are far from move in condition and most home buyers do not have the qualificatiosn to bring them up to code.  The city needs to address this question and provide some sources for financing the construction costs and providing viable contractors to do the work.

Matt

Hi Mike,

I own both SFR's and also apartment buildings and find there are benefits with both. The biggest benefit from apartment buildings with regards to cash flow is that if units vacate you can still carry the rest of the building with rents from the others. So if you view the portfolio as one investment, you should get the same benefit. You will also benefit from my favorite part of SFHs, the fact that the tenants pay all the utilities. Buying the houses for below market per house makes it even better, because you could sell them off as you go if you want.

With regards to your scenario with the sale of your business - the question is can you get bank financing for the SFH deal? If you have enough equity in your pocket I would move forward in that fashion. If you can make sure they don't do a blanket loan as yo would want to be able to sell them easily. I have some blanket loans on properties, and although the bank will let you sell one of the portfolio, it's expensive because of the amount of paperwork involved. Once you sell your business you can either pay of the mortgages (although I wouldn't do that) or you can buy a larger asset (I WOULD do that!)

Another thing to consider is management which can become an equation on a bunch of single family homes.  Do it in house or sub it out?

I hope that helps!

Matt