NJ Newbie-Sort Of...

[Michael Leffelholz]

Hello All,

I have been lurking on the BP site for a couple of months and thought I would finally step out of shadows and introduce myself . My name is Michael and I'm from northern New Jersey. I am interested in pursuing a buy and hold strategy with an eye to building a cash flowing portfolio of residential properties in stable areas with appreciation potential. That's the newbie part. The not so newbie part- My partner and significant other have been actively investing in tax liens here in New Jersey and in Illinois through a third party since 2010. I am also a long time CRE lender. Really enjoy RE but banking not a much fun as it bused to be.

Right now my partner and I are not quite on same page as to where to begin this process. She likes to be more hands on and would prefer to be local while I would be willing to consider some long distance turnkey opportunities. I don't disagree with her rationale but I just keep thinking about the larger investment typically required in our market and the higher cost of property ownership- high prices and high taxes. Other markets would allow for a lower barrier to entry price wise and allow for multiple acquisitions also providing some portfolio diversification.

She and I did have a chance to get together with several other local BP members this past Saturday morning over coffee and "talk shop".

I have been very impressed with the level of info and expeirence here on BP and the communities willingness to help. Am hoping to play a more active role going forward. Did have my first post here yesterday.

Anyway, happy holidays to all and prosperous New Year.

[Chris Welch]

Hi Michael !

Wanted to share my experience if you find it helpful. I also live in Northern NJ and invest 3 hours away.

I'm a 'fix-and-hold' multi-family guy. My family and I have a strategy of fixing multi-families to like-new condition with low-maintenance fixtures, split tenant-paid utilities and keeping an answering service for basic call routing (which we recently switched to Google Voice because humans weren't necessary anymore).

Some of us live where we invest so we have someone who can drive around the houses as needed, but it's largely hands-off.

We have a total of 15 x 3-4br units and in total get minimal calls each week (2-3). Maintaining good relationships with a handful of contractors and using technology like digital answering services (Google Voice), rent collection web sites, etc give us the right balance of knowing what is happening to our properties but minimizing the disruption to all of our full-time jobs.

For us, there are two critical periods: one is during the renovation phase, especially if tenants are in the property. Having a trusted GC that can take care of issues is great.

After the reno is done, the other critical time is when tenant turnover happens. All our leases turnover on the same day (student rentals) and we feel more comfortable having hands-on oversight, so we are there in person.

That said, self-managing the property is a viable long-term option for is. Not saying it's easy or hands-off, just saying is a very acceptable level of effort for us.

We find the things that have the most service calls are: Toilet, Sinks, Doors, Windows, and Appliances. Having a handy man or two that are reliable is important. Also, we take a proactive property management approach - if the toilet is actually leaking, replace all the parts that were installed at the same time, not just the one piece. Or if the water heater is at the end of the warranty, replace it even if it's not broke. Some don't agree with this approach, but it minimizes service calls which are more costly in the long run.

Hope this helps.

Cheers,
Chris