All Forum Posts by: James Doren

Hi Kay, 

I have a slightly different approach than most of the comments here, but you're here to see differening opinions right? In my view, you're in a classic scenario that a cost-benefit analysis will solve. We've been in this situation before...There's no correct answer IMO, though the obvious answer seems to be to 'get more money'. That does not always equate to 'raise rent'. To help decide what to do, I ask myself these question in the following order:

1) Are you currently producing cash flow?

2) How confident are you that you could get a new tenant in, that would treat your place the same and pay as consistantly as the current tenant in a reasonable time? What is that reasonable time frame?

3) How sure are you they will leave if you do raise rent, and if so, is it worth the cost of a month (or 3) of vacancy? Sometimes raising the rent a small percentage would take years of additional tenants for a few months of vacancy

4) What's the 'right thing to do'. Obviously you don't own rentals to lose money, but can you navigate the change in a way that is respectful and professional while still hoping to gain income?

Being a landlord isn't easy, because the decisions that come with it aren't. Numbers go a long way, and simple math is your friend in this situation. From my experience, people are blinded by the extra 50-100-200 dollars of extra cashflow a month and often don't realize that if you have a good tenant that pays regularly without causing issues, it would sometimes take another 3-5 years of a new tenant at the new rate to make up for the vacancy time of the turnover. In my experience, if you have an excellent tenant and aren't under water on the property, it's worth being upfront early about the need for an increase the next year or so, rather than springing it on them the time the lease is up. For us, it has created a better partnership and resulted in less vacancy, happier (and cleaner) tenants, and ultimately more cashflow and less headache. 

I know it's not a direct answer, but I hope it helps your decision. 

James

Hi Mike - I'd be happy to help if you're still looking for an agent! Just reach out and let me know!

Excellent analysis of some terms that shouldn't, but often do, get tossed around interchangeably. In this current market specifically, it's extra important to seek out the right loan product and the lender type that best suits your needs. 

Our entire company is based on working with private lenders - and we use this term the way you defined here - an individual or entity that lends out their own capital that they keep for the life of the loan. We get approached by 'hard money' lenders and even small banks or capital groups, wanting to offer us a 'private money loan'. We do work with these institutions from time to time, but the crux of our business is really helping individuals or companies invest their own money and get high returns on a short-term loan. 

I read your post with a smile on my face, and was tempted to copy and paste it on our website! LOL. Appreciate the break down, great content!

James

Quote from @Ivan Touevski:

Hi all,

Just wanted to say hello to all and get myself motivated to engage some of the folks here.

A little bit about me, I'm an engineer, have a family, live in NJ, and big DIY enthusiast. I have made a ton of renovations on my houses. I tried renting my first property back at the end of 2019, but the numbers barely made sense at the time and I couldn't find a decent tenant. After a couple of months I called it quits and sold the house in Feb of 2020... little did I know now hehe. Anyhow we gained a ton of equity on our current house so it worked out I guess. 

I am looking to do long distance real estate investing because I do not think there are good opportunities to invest locally in NJ, and the state favors heavily the tenants. Along with my somewhat lackluster experience trying to rent my property. I would like to own more property in NJ, but it's just so expensive. Also I believe my $ will go a lot further in another location. I am having a hard time narrowing down a location. I have been looking at Pittsburgh PA.

here is what I got so far:

1) Location PA - Pittsburgh? Still open to NJ investment. Don't know what neighborhoods to look at in particular. 

I have also Looked at Cincinnati and Columbus OH

2) Property Type - Single Family, 3 bed+, 2 Bath. Prefer a close to turn key or minimal renovation ($10k). 

3) Would need to be positive cash flow, or to break even after conservatives expenditures - property management, maintenance, etc.

Any thoughts?

Thanks all!

 Hi Ivan, 

I can relate to that... Growing up and living on Long Island, it felt like I needed more capital than I could get my hands on to get started investing in real estate. I currently live in Mechanicsburg, PA (Central PA, 3 hours east of Pittsburg), and the opportunities out here are much more fruitful. There's a low cost of living, a really growing market, and high quality tenants. I live and work here as a realtor in addition to running our investment company and it's a wonderful area, we fell in love with it right away. I'd be happy to chat if you ever wanted to know more about the area!

James

Quote from @Kaitlyn Aragon:

Hi there! 
I’m trying to work on being vulnerable about being new and my situation. I always tell myself - “I’ll start connecting when I’m more experience” when in reality, reaching out and laying my cards out might be just what I need. 
- I’d love to get some thoughts on my situation. I am 27, payed for a flipping mentorship back in 2021. I feel like I know so much but nothing at all at the same time. I have access to a lot of investors, contractors, and real estate agents but no relationships built with them. 
- my financial situation: in a W2 job making about 40k a year (been here about a year). About 40k in a mutual fund. Only debt I have is cc (5k), car loan(abt 4k left). Credit score is about 740. 
- I’d like to start off with a brr and get some experience with contractors before going into flipping. I want to get at least one passive income generator under my belt and then do a few flips for some active income. 
- my questions are: where do I start? Talking to a real estate agent to find the property? Look for funding first? Talk to HML? See what different lending institutions have to say about my situation? Make connections with contractors? Find the property on my own? Learn more and wait? Save more?
- any thoughts and opinions are greatly appreciated!!!! 

Hi Kaitlyn! I couldn't agree more that while intimidating, laying your cards out is always the best option - it opens you up to making connections that are actually right for you. 

I chose to reply to your post because I feel like I was in exactly the same situation not that long ago. I had a ton of knowledge in my head from books, podcasts, masterclasses, but no hands on experience. Similarly, I knew plenty of investors and contractors but had no actual working relationships with people who are already doing what I wanted to do. I wanted to get started so badly, but didn't have the experience to get the trust of investors, and didn't have the full amount of funds needed to buy a deal all on my own.

My wife and I realized there are so many people in this exact situation. We created our company, Rise Up capital, for this exact reason. What we do is recruit people in this exact situation, like we were in, to act as private investors to one of our upcoming deals. What we do different from anyone else we've been able to find, is actually provide complete transparency into the process from the purchase of the deal, the entire rehab including costs, renting out the property, and the refinance process (most of our deals are BRRRRS). You can be as involved as you wanted to be, so we actually show how we execute our deals with your money. Apart from making a nice 10%+ return on your investment, you get that first-hand experience that's so difficult to get. 

For us, our first deal opened up so many doors - I personally found it so much more valuable actually working the process than just reading, thinking, and talking about it. After that, it was like a ball over a hill and we just kept rolling forward. Our investors are living proof of this as well - 85% of them have gone on to fund their own successful deals after working with us, and 100% of the investors we've worked with have chosen to invest with us a 2nd time.

My point overall, is that there's this weird gap of having the knowledge, wanting to get started, and having the experience necessary to move forward with the appropriate amount of risk. It's just a matter of finding the right vehicle to move forward in. Because of my corporate background, I liken it to applying for an entry level job that requires 5 years experience.. and it's frustrating! Happy to chat if you're interested in learning more.

Wish you all the best!

James

Quote from @Gregg Stewart:

Quote from @James Doren:

Welcome Gregg! I'm fairly new here myself. I grew up on Long Island and am looking forward to moving back eventually. Great reading list! Sounds like we have very similar goals and interests, would love to connect. Wish you the best in your adventures!

 Thanks, James! That funny, I'm ready for PA. Want to house swap? :D 

HAH! I thought the same when I was on the island still, be careful what you wish for! That being said, show me where to sign… 

Thanks River! Likewise, happy to connect and learn more!

Yea I was hoping people had some insight! We’re going to give it a shot - will be getting the tickets today. If you end up pulling the trigger let me know, we don’t know anyone there and we’d love to connect there for a bit! 

I always find it exciting to see that spark being ignited (or re-ignited)! I'm sure that prior experience will help you move along much quicker. 

Welcome Gregg! I'm fairly new here myself. I grew up on Long Island and am looking forward to moving back eventually. Great reading list! Sounds like we have very similar goals and interests, would love to connect. Wish you the best in your adventures!