Am I too eager? Or is it worth the risk?

[Serena Tillman]

Hi everyone! Newbie here, excited to purchase my first property. I recently did an analysis on a duplex in Hoboken, NJ on a street that is very popular and is up and coming. I just realized on my analysis of the property that I didn't implement a property management fee (even though we would be the ones managing - I know it's an important number to take into consideration) and our cash flow is now negative. However, the area is definitely hot and this would be less of a property of investment in the short-term but moreso wanting the building to be in the family for our kids. Does that make it worth it? Or is it still something we shouldn't consider given the numbers? I'm wondering if this is just me being excited for my first property or if it would actually be worth it given the future potential.

[Jonathan Burmenko]

@Serena Tillman I see this in many cases with investors looking for their first property, it is very easy to jump into a deal based more on emotion than on the numbers. Make sure to double check your numbers, do you have vacancy, maintenance, CapEx reserves.. etc. There may come a time when you will need property management or an unexpected cost comes up and you will not have the buffer to cover it.

I would agree with Daniel, and advice you especially for the first deal to not gamble on appreciation but to buy a deal that pays for itself over the long run. Keep looking and you fill find one!