NJ Couple: Small business owners looking for general advice

[Michael Rivera]

Hello everyone, Mike and Sarah here!

We currently rent in Belleville, NJ, and have an established owner-operated Pet grooming and daycare business, a bit further south in the Union County area. We have been working together the past 3 years, and for the past year or so, we have been phasing out of our mid-twenties bad habits, and becoming more preoccupied with our futures. 

One of our regular clients heard that we were listening to some finance podcasts, and recommended we listen to Bigger Pockets. Since then, our life has never the been the same. We began budgeting, paying off debts, working harder, and overall becoming more financially responsible.

We want to get out of NJ, but we are aware that we have a cash flowing business, and have made many connections over the years that can prove to be beneficial to us if we were to invest in NJ. We are excited, and eager to use the BRRR method to begin building a portfolio of 2-3 family homes. I would like to at some point scale up, but for now, we're more preoccupied with getting started.

We have traveled to Denver and Seattle for our last 2 vacations, and are convinced we belong out west. We want to use real estate to get us in a position to move comfortably. 

My conversation starting question for you guys would be....

Would the first move for financing be going straight to a bank for a low money down FHA loan? Or should we go straight to an investor for a harder money investment first?

Pleasure to finally be a part of a community that I actually look forward to hearing from!

[Jessica Zolotorofe]

Depends on your creditworthiness, income, etc. I would always suggest a conventional bank if you qualify because the interest rate and terms on hard money loans, which are often short term, are usually not nearly as favorable. That being said, the qualification process is usually easier. There are absolutely times when hard money is a blessing, but I'd try the conventional way first.