All Forum Posts by: Eric D.

I do not want to buy additional properties. Too much work, and I am too busy. And it is a hard biz in north Jersey.

Since I am self employed, my goal is to create security and retire early 

I'm happy to see this post. I own a 2 family in Maplewood and a 3-family in W. Orange, each purchased off the MLS.

I'm always interested in learning about different strategies and hearing other insights. It's hard to get a good deal on the MLS in this area.

My wife and I have two multi-families purchased within the past couple years that are on 30 yr mortgages (4.625 and 5.125%) with 25% down and loan balances of about 300k each.

I have some extra savings to invest - about 100k. 

Would you advise adding it to my SEP retirement account which is invested in index funds or apply it to the highest 30 yr mortgage to pay it down?

I purchased a 2 family in Maplewood in 2017 and a 3 family in W Orange in 2018 and each cash flows about 1k per month. I put roughly 125k down for each. I bought them off the MLS. I got lucky, because most multi properties on the MLS are not that great and overpriced.

Still, upon buying these properties, I had to put another 30k-50k into each. You buy it, it looks good, and then you have to renovate or you find things that are wrong and need fixing. 

That said, I would probably only buy a complex, if I was going to invest again, but there does not appear to be a market for them - or else they are multi-million dollars. What I mean is, owning a 2 or 3 family is a pain, and if you get a property manager, that eats your cash flow.

I have no experience buying anywhere than off the MLS. I see some wholesale deals but they are mostly in distressed areas and do not seem like great deals to me. I have no experience with foreclosures or other off market purchases.

WOULD BE CURIOUS TO HEAR THE EXPERIENCE OF THOSE WHO HAVE BOUGHT OFF MARKET.

Thing is, too, that in my view, the market is so competitive here that most any property, no matter what condition, can make it onto the MLS. I think the off market deals are fewer comparatively to other parts of the country. The BBBR method that you hear about on here is just not compatible with North Jersey.

Here, it seems, people who have owned property for years and years do well - it is not a place where the new investor can come in and start making money and then retire, like other parts of the country.

Thanks for all the replies! My goal is to retire early (I am 45). Thing is, BBBR does not really work in NNJ. I think self managing two properties is my limit. If I get a third, I would need a Management Co. and that would cut into my profits. 

OTH, I hate to just give extra money to the banks each month. 

I am seeking financial advice about what to do with my cash flow which is $1k each for two multi-families -- invest it in the market or pay off the mortgages more quickly? Or something else?

Basic info: within the past year, I purchased two multi-family rental properties in north NJ in the $400k-$500k range, putting down 25% and obtaining 30 year mortgages (4.7% and 5.25%). I owe a little over $300k on each.

After paying my mortgage/tax/insurance, I cash flow about $1k per month for each.

I hear that paying off extra on your mortgage within the first 5 years can really shorten the life of the loan. And it is like making an investment with a guaranteed 5% return in my case.

OTH, by paying off the mortgage with the cash flow, I feel like I would be too heavily invested in my properties and should diversify. Further, I feel like over time the home value and rents will increase so that it is not really necessary to allocate money I could use now into the mortgage.

What would you do?

Actually, Aaron, I did not say that I do not like the various options. Rather, I said that I am unfamiliar with them.

I live in Maplewood, NJ and did buy and holds in the past year - I own a 2-family in Maplewood and a 3-family in West Orange. I bought both off the MLS with conventional 30 year loans and 25% down.

I find, however, that it is very difficult to find a good deal off the MLS. Owners will offer multi families in North and Central Jersey for prices where you cannot make any cash flow with traditional financing like I have. And yet there are people who pay all cash for these properties.

I want to keep investing in real estate so that I can eventually stop working or at least scale back, as I am now 45. But I am intimidated and nervous at the thought of going out of state to PA or even further away. I feel like it is just too big of a time commitment to search for properties there when I have a family in NJ, and that I would have no control over the property after purchasing it. I can imagine headaches with tenants and repairs and it not ending up well.

I just do not see good opportunities here, and I am totally unfamiliar with off-market properties. I have never been to a foreclosure auction. I am not familiar with wholesaling. I am not averse to buying a property at a good price and fixing it up, but have never worked with a hard money lender. Also, it seems like the bargains that do exist are in depressed areas. People have mixed opinions about them. For instance, I know someone who lives in E. Orange and he is not happy there. Yet others have no problem investing there. I do not want headaches, however. And I would not want to put more than a total of 100-175k of my own money into a property.

Any advice on a strategy for me? Anything I am missing or have incorrect with my outlook? Thanks!

That's amazing. Congrats to you. Share with us how you got there. I own two multi families in North Jersey, bought off the MLS with 30 yr mortgages. I want to take the next step but am not sure how

Would you invest in more property instead? Thing is, I live in North Jersey where good deals are hard to come by