All Forum Posts by: Chris Masons

@Thomas S. While some retire at 70+ years of age I would somewhat tend to agree with you on this. However, there are plenty of people who for various reasons may be able to retire in the 50s and 60s which to me is still young enough to manage and take care of some rental property. I plan to be one of those people. I have a nice portfolio of single family, multi family and condos. Out of this portfolio I have a couple single family properties that perhaps I will pass on to my kids to either A. live in or B. rent out and continue to generate income if they so desire OR  it can be sold after I die and they will receive a STEP UP in cost basis potentially saving them ALOT of money in Cap. gain taxes which can be very beneficial...

As far as never being retired owning rentals you can always hand it off to a management company to ease the stress giving you freedom to do other things.

Best,

Chris

@Thomas S.

While I understand what you are saying, retirees aren't most concerned with making the highest return at this point. It becomes more about stable monthly cash flow and wealth preservation and having a few properties paid in full generating  significantly more and stable cash flow than when having debt to service will accomplish this and may give them piece of mind as it is an asset they have held for many years 15, 20 30 years so they feel comfortable and trust this asset to continue to pay them monthly VS. going into the stock market or another security where you have less control over the assets ability to produce stable steady income. Sure your return will be less not leveraging but there is piece of mind and more net monthly cashflow which they will probably want at this point if they are not working

I have 2 paid off properties that each currently generate ~ 11% annual return before any tax benefits. That to me is not a bad return at all. Sure, if I leveraged them I would boost this ROI to the mid to high teens however I have a good amount of leverage currently and like the fact that if I need cash in a hurry I can always pull cash out and re leverage.

There is no right or wrong answer here

Best,

Chris

I like many have mentioned you tend to reap more benefits with a long term hold strategy and once you pay off your debt you get even more rewarded by reaping the full cash flow potential.

I tend to try and buy properties that I can maximize cash flow from the start even while servicing debt. I have also struggled about when to sell as I am a buy and hold and generally do not sell but as one gets to retirement 65+ one can either continue to manage the properties, hire management to ease your burden and let you enjoy life without the hassles of land lording, OR you can begin a sell off strategy  where you can stagger your sales by selling 1 every other year or spread this out based on your need for cash and cash flow.

In the end it is a personal decision based on your own personal needs. Frankly, working a full time and managing 15 properties can be very stressful at times BUT if I didn't work a day job I think it would be very leisure to put around in my pickup truck and manage my properties. The biggest issue for me now is finding time while forking a day job in NYC with a hour commute each way.

OTOH, if by the time your are 65+ you may be just totally fed up with this business and want to cash out and hopefully by this time you have built up a good amount of equity in your investments if you bought right and managed right you should be in a great position to cash out and find truly passive investments if that's what you desire

It's also hard to predict how one will feel 15 20 years into the future. Things change and events happen also. Long as one has options which is the beauty of Real estate  IE. Sell, refinance, owner finance, contract for deed, lots of options

I'm still in the accumulating stages so it's hard to think about selling  :)

regards,

Chris

Do you have experience Managing something like this? Have you been part of their business up until this point?

Do you live close to the property?

Chris

Don't stress, If you have a non paying tenant the process is fairly simple. If you have never been through it before you should hire a competent attorney, however once you learn this process it can easily be handled by yourself assuming your property isn't held in an LLC.

Although the laws are very tenant friendly, the law states that a Landlord is entitled to receive his/her rent on time and in it's entirety every month - assuming Landlord is doing their part of course

Evictions for things other than non payment can get tricky as proper notice is required and a host of other things.

If you have questions please feel free to PM me.

thx and good luck

Chris

Welcome Tracey!

I am an IT professional  as well and work in NYC too.

I too plan to use my portfolio to hopefully retire early (next 10years  hopefully)

I don't think there is a better place to gain knowledge, experience and wisdom then Bigger pockets! 

Good luck on your journey!!

Best

Chris

This thread has really got me wondering how the Laws are in NJ with regard to being allowed to deny a  section 8 tenant.

Does anyone in NJ happen to know this?

I have actually told people I do not accept section 8 but something in back on my head tells me that in NJ the landlord has the right  to accept or reject a tenant based on this.

Typically a prospective  tenant will ask me over the phone " do you accept section 8"

Can anyone clarify? Guess I will do some research in the meantime...   As far as OP goes, I would at least have a consultation with an attorney and see where it goes..

Keep us posted as we are at least I am very curious of the outcome of this.  In the end at the very least I hope we can all learn something from this...

best,

Chris

@Philip Williams  buying a rental/investment or getting a loan to fund it is not the hard part. Being successful and sustaining/growing your real estate portfolio year over year is, as well as grinding to save up that 20% sometimes 25% down payment required which can be a real challenge for a lot of people who have kids, school loans, college to pay/save for and who work multiple jobs to do this

It's hard enough to get by in todays world, never mind being able to save 10k, 15, 20k+ to put down... 

Best advice I can give is get started young when time is on your side when you don't have a family to support because it becomes very challenging as you get older.

My hat goes off to anyone dedicated and determined to save 20% to put down on an investment property as it definitely is a challenge but will pay off

With 20 million in liquid I would probably not be investing in RE. More likely more along the lines of cash preservation and a lot more conservative like bonds and treasury bills.

With that kind of scratch all you need is 3% annually even 2% would get you 400k! That is plenty! NO need for any additional risk

Chris

I have been an investor in NJ for the last 20 years. While currently finding a solid deal with cash flow and appreciation is difficult, as others have commented it is NOT IMPOSSIBLE.

Sometimes you need to look outside the box and and try non standard methods of finding property people wish to sell. While the MLS is a great source it is tough to find a deal that makes sense from an investors viewpoint.

I started out buying multi  family and have recently changed to single family and condos but seem to be looking at multi family again as prices have risen quite a bit over last few years...

A few counties not mentioned that I invest in are Union county and Somerset county. there is definitely some good value here if you look hard enough.

best,

Chris