All Forum Posts by: Trevor Ewen

@Peter Cipparulo 

If you can do the 20%, more power to you. New Jersey can be so expensive that the FHA can really help people accelerate an investment plan. That being said, if you can get away from the PMI, great.

From my perspective. I would still take the FHA and then use that remaining money to buy another investment property. Then you have even more tenants paying your bills. All the homes that you don't live in will never be eligible for FHA financing, so you will need all your downpayment money for those properties.

As for additional property: you could either look in NJ or diversify outside of your market to a more tax friendly market. Many folks on the forum are into high rent/value towns in the midwest: Low cost, landlord friendly, many renters. As a New Yorker. Places like Tennessee, Missouri, Indiana, Florida, and Georgia are great places for refuge from the property-tax-man.

@Peter Cipparulo 

CORRECTION: No fee for two or less members on the LLC. So in this case, it definitely seems like a good option.

@Peter Cipparulo 

Welcome!

I think many folks on here would recommend buying more units than less. Many people I know in New Jersey choose the option to get the biggest house they can afford. My theory: instead, buy the most units you can afford, then you get the income.

It seems like you are making conservative moves in regard to the purchase, given that you could afford the mortgage in the case of a downturn. From my understanding, Edison is a nice place to live, and I imagine it would not be too hard to find a renter.

I would purchase the duplex, personally... because it makes the process easier, and opens you up to financing made for owner occupants (FHA, First Time Buyer Credits). If you are very concerned about the liability, you can make an LLC to manage the property. This LLC will make repairs and collect rent from the tenant. However, New Jersey has a minimum $150.00 charge per member (yearly) if there are 2 or more members in an LLC. Maybe this is negligible for the peace of mind, but when evaluating the income potential of a property, it should be taken into account.

Good luck, reach out should you need anything.

@Jesse T. 

An early mentor of mine convinced me to stay away from condo investing. I am glad I took the advice.

I am actually quite familiar with Reston (my aunt and uncle live there). There is plenty of nice (new) property in the area, but I would definitely go with the townhome.

As for bedrooms. As a farther DC burb, you are more likely to get the families, which naturally makes the three bedroom more desirable. Young professionals can do a 1-2 bedroom, no problem. I just don't know how many younger folks would choose to commute from Reston.

@Sven Simon 

Typically I have found that credit unions and local banks offer some of the best rates. I would look into what credit unions you qualify for at National Credit Union Administration. If the property is within the state, one of them can probably manage the loan.

@Francis A. 

Apparently, these kind of promises have been going on for awhile. On the other hand, St. Louis probably lacks a lot of the high-spending fans you could get to buy tickets in LA. Maybe it's a trade up that could happen. 

@Mike O'Connor 

Welcome. 

The key I reason I will never pursue a real estate license for myself is the fact that it is not my full-time job. My understanding is that it comes with many yearly association dues that eat at your bottom line. I would run the numbers and see if both of you having a license makes up for that loss. 

@Danny Diaz 

In my experience, REITS have been an excellent investment vehicle, particularly in 2014 (took some time to speed up, corporate stocks did much better in 2012-13). They have actually been my strongest performers in the last 3 months.

They basically behave like a stock for me. However, some come with higher dividends than a corporate fund. As mentioned, the lower correlation with stocks is desirable.

I am keen to note that you don't get a lot of the 'Sweet Extras' you get with physical real estate investing. Buying under, fixing up, then renting at market value, taking advantage of loan vehicles (FHA, VA, Tax Credits). These are all great tools at the disposal of individual investors like you and I. REITS are large companies. Their investments often reflect larger (cyclical) trends in a market. Their ability to analyze something deal by deal has its limits, due to their large scope.

I like to think of them as the dinner guest that eats a ribeye steak, but leaves a ton of meat on the bone. You and I can see (and eventually taste) that meat. That is a big advantage of personal real estate investing.

@Arleigh Cortez 

Welcome. From my limited California understanding, Bakersfield is one of the few places you can still get a reasonably priced deal. Good luck, and reach out should you need anything.

@Nichole Wall 

We also used Saddlecreek for our last purchase. They made it easy.