All Forum Posts by: Joval Mathai

@Joval Mathai Buy and hold or fix and flip is much easier than new construction in my opinion. The first two also have a much lower price point to enter.

It is also much more difficult to get a loan for new construction unless you work with a large builder who is doing some sort of spec-type housing and can provide financing.

I have a wizard of a contractor who can get whatever I need done for the flipping and buy and hold but can’t do new construction. He doesn’t have the crew.

In my area to get a good, reputable builder for new construction you would be out at least 2 years. Which would give you enough time to get all your ducks in a row on all the things you would need to have done before the construction started.

 What's your backstory and how much capital do you have? Most start with flipping because the bar of entry is lower, you can use more financing options and it's easier to find vendors/contractors. Building is nice but it takes a lot to do. Newer investors usually can't tackle something as complex starting out. Either strategy build a team and learn how the processes work.

Hi Joval and happy Holidays.

As with anything, approach has lots to do with result.  I was watching on TV over the holiday some guy broke the world record for solving a rubix cube.  It was like in 34 seconds.  It would take me a year probably, suffice it to say that his approach to solving the rubix cube is way better than mine.

So you mention a few different arenas for investing.  So, if you have no experience forget about buying the land and building.  That's more of a seasoned investor type option.  Those projects can be difficult to finance, be lengthy, and have lots of soft costs.

So the question remains what is the best way to get started?  What follows is just my opinion.

All things being equal, let's say you have decent credit and like 40k. You want to get into REI and not sure how to or where to start. It seems we all know the destination (the 50 door portfolio providing 15k - 20k per month in passive income that has a net worth of 15 million). We all want to get there, question is how. And there are many people who hold seminars and classes that cost major money that are supposed to tell you how to do it, but really some of the most clueless borrowers I ever worked with were coming to me from one of those groups/seminars/classes. Their ARVs are off, projects are of poor choice, and their doc work is a sh!t show. I scratch my head sometimes and wonder what these people paid like 20k for?

Anyway, if you have a good W2 and you can acquire 30k - 50k every few months and you want to continually sink that money into holds then you can build that way. Constantly do 30 year DSCR purchases that cashflow and pick up 4 - 8 doors per year and in like 10 years you are home.

But if you do not have access to that kind of cashflow you need to generate the cashflow needed to create the portfolio. There's many, many markets in the US that have an affordable playground for people with like 40k to work with. You need to create a short term profit arm of your RE company. Create a team in a market that can offer an environment where you can 3x - 5x every year with flips. That will generate you 75k - 100k after tax cash. That cash then can be deployed to fund the portfolio which you really want to be nothing but the 2 - 4 unit buildings. They DSCR way better than the SFH. I have my clients working with a team I set up in Pitt, we have 12 projects in various stages from loan processing to sold end products. 2024 everyone wants to get that 3 - 5 projects completed.

How does that help?  Well, you'll make short term cash and you'll acquire valuable experience.  Once you have 5+ projects in the bag alot of lenders will consider you a pro and your terms get better, guidelines looser, widens the web of projects you can do.

No after you have 10 flips under your belt and you have 8 doors in your portfolio and now a piece of land comes around that maybe you can build on you are now much more fundable on such a project (it will still be hard but not impossible).

Both come with their own lifestyles. Fixing and flipping is probably the most hectic real estate strategy. 

I'm not experienced in either, but in my understanding it can be quite difficult building a house from the ground up. The fix and flip can be very lucrative in the right market/neighborhood, if your starting out I'd recommend Fix and Flip ! 

There is a lot of demand for multi-family homes in NJ. Have you been submitting offers on homes or just looking around? Do you work with an agent or are you doing things on your own? It all depends on how you structure your contract on offers. All of my multi-family listings ive sold this year have been all different and it is truly whats best for the seller and what the sellers terms are. You need to have a sharp agent that asks the right questions and can structure contracts that make your offers stand out. Generic FHA 5% down offers are not going to cut it these days. Conventional loans are easier with less requirements needed. If you are still in the market and want to chat, send me a message I would love to help!