All Forum Posts by: Salvatore Lentini

@Ardian Selimi - others may disagree but I think ground up construction for your first deal is taking on an unnecessary amount of risk.  Is the $775K inclusive of the closing costs, transfer tax, land, architectural drawings, engineering drawings, township approvals, legal fees, holding costs (during construction), realtor fees?  Could end up being much more than that.  Will also take longer than you project which will increase your holding costs.  Being all over the place in the beginning is common.  Pick one thing and go with it.  Depending on your experience and what you end up learning will help guide you moving forward.  You may completely change your mind after your first deal.  I thought I was going to own a few dozen single family properties before moving on to multi but after 3 I bought a 14 unit and have never looked back going bigger and bigger on every deal.

@Melinda Francis - I know this sounds surprising but you don't have to have ALL the answers before starting.  You will learn as you go.  There are some basics that you need to know but every deal has its idiosyncrasies.  Even now when I'm buying large commercial deals, I'm constantly learning.  I started with single family rentals and made the leap into a 14 unit multi family.  Wasn't as hard as I thought it would be.  Certainly wasn't 14x harder.  Before I bought an office building I had zero experience and zero knowledge in that space.  I learned after being presented with an off market deal.  I bought another.  And contrary to what you hear out there, office buildings can still be great investments if you buy them right.  Never owned a farmers market before.  Knew nothing about them.  Bought one a few years ago and its been one of my best investments.  Bought a motel and now am planning on buying 2 more.  I'm also developing a small townhouse subdivision.  I've only ever done rehabs (with some so extreme that they were practically new construction!) but I'm learning as I go along by meeting with an architectural firm, meeting with the borough and talking with contractors.  Bottom line, know that it's ok to not know.  Unlike stocks, real estate transactions take a long time giving you PLENTY of time to learn along the way :)  Feel free to message me with any specific questions.

@Lily Miller - don't stress!  You will likely have to deal with A LOT of leads before you get one that works.  And I don't mean that because you're inexperienced.  Most leads don't work out and shouldn't or can't.  Someone in pre-foreclosure is likely to be someone that is difficult to pin down.  They've got financial problems, credit problems and probably something going on in their personal life that led to both of those things (relationship problems, medical problems, job problems).  Their lender is having a hard time getting them to stay in contact so you will probably too.  Also, the owner of the property might WANT to do a deal with you but the lender is the one that has the ultimate decision making power.  BUT...just remember, even if it doesn't work out, you will learn and you'll increase your chances of closing the next one.

Rates need to come down to a certain magic number (lower but not too low).  Right now lots of people are refusing to list their house because they have a crazy low rate and they'd be trading that for a new home at a higher rate.  Also, builders haven't been building because borrowing costs are too high.  If rates come down 1-1.5 points you'll see a lot more activity.  People will list, builders will build.  They just need to make sure they don't lower them too much because then prices will go up even more.

The irony in Analysis Paralysis...

Not knowing how to start in real estate investing or worrying about doing it wrong when in reality, just getting started is what will get you over the fear and the worry.  I know because I sat in Analysis Paralysis for 9 years.  But once I got started, bought 10 single family rentals in year 1.  9 years later and I'm closing in on 200 rentals :)

They are legit and competent.  Good for you for checking though.  There are some lenders out there that are "legit" but pretty incompetent.

There's no inventory and there won't be enough for probably a couple years to come.  Low supply means prices go up.

#1 Tip?  Start.

@Sino U. - invest locally first.  I'm born and raised in NY, lived in Jersey City and Hoboken NJ after college and now am in PA.  NJ is expensive, especially the taxes.  But you're close enough to PA and DE where you can find properties that cashflow.  Investing out of state looks good on paper but you will NEVER achieve the numbers the sellers and realtors are telling you.  Repairs will cost more and vacancies (while waiting for repairs and remarketing the property) will be higher.  You'll wish you invested closer even if it means a 2-3 hour drive.  Over the past 10 years I've invested in OH and here in PA and over time the closer the properties are to me the better the returns I've gotten.

@Matthew Lundell - welcome to BP!  Be sure to ask specific questions and you'll get specific answers.  Good luck!