Starting a Real Estate Venture
In about a month I am going to seriously start a venture in my life which could either end well or horribly, I ultimately will discover which in time. I have taken all of my savings and I will be purchasing a few multi family real estate homes to rent out. This might seem weird to you if you have read my posts and saw that I wasnt a huge fan of physical real estate maybe 3 months ago, but I have delved down the rabbit hole and I have to say I have really changed my mind on the subject, so why?
Well it depends why you want to buy physical real estate, if you are choosing to only save for retirement, the stock market over time will return about the same and there are far fewer things you have to worry about. You can basically close your eyes, wake up in 30 years and be able to reitre, while physical real estate is more hands on. Physical real estate also offers something very important for someone like me that stocks do not, cash flow.
Its near impossible to find good cash flow off reliable dividend stocks, but with physical real estate you not only get monthly payments but you also have control over what you do with them. I will personally be trying to save the majority of my income from real estate and investing it into more properties so I can give myself a raise of sorts. The properties im looking at have returns from 7%-10% a year so realistically after taxes im looking at 5%-8%. With the write offs I have from depreciation to maintenance and more, I will be able to keep a very large portion of what I make on the income.
The returns aren't amazing, but over time rents raise as well and I would still not be able to get that type of cash flow on the stock market without high risk. Properties have risk as well and many more risks but at least there are ways you can mitigate the risk yourself and feel like you are in control and not just a back seat driver. If I want to raise the rent I can, if I want to offer people a deal I can, the choice is mine. The ultimate goal for me is to create a portfolio of properties that I can live off of and run a business as well. I will still do other things so I can earn more money, but I will be jumping into this head first.
I have done a ton of reading and research over the last 3 months and I feel like as long as I calculate and take precautions I wont take a huge hit. I expect some sort of on the job training cost but in time I will definitely learn and fix what I do wrong. I am also paying for the first couple properties in cash, which isn't really recommended if you want the best long term return, a topic ill go into another time, but it gives cash flow now and I don't have to worry about my mistakes costing me the actual property. I think this will be a very interesting journey for me and I will be keeping you updated on what I end up purchasing and opening my books so I can be transparent about what the returns are actually like. I hope you stick around for the journey.
-Calaber24p
that's where its at...that's my same goal
Well, there's nothing as good as profit, growth and risk assessment of a business venture before startup, just as you have done. The relaxed and confident frame of mind you are going into it with is really admirable. I believe you'll do very well and will try my best to keep up. Been following you for a while but have been missing your posts because of tight work and school schedule. I wish you all the best.
Thanks well see if it all works out, I am hopeful, but I will also be keeping close eyes to look at things.
I rented a house for a few years. The income was nice but it is not for me. Vetting good renters, dealing with maintenance on their schedules, move-out issues, etc. Just too much of a distraction.
Best of luck though. My only advice is to make sure you get good renters.
yeah I will be having property managers and I will be having multiple units so vacancies wont disrupt a large part of the process. I am also using very strict calculations on the properties when it comes to what I am willing to pay so I can give myself leeway.
Start off with one good one at a time. Get a feel for it then expand your rental purchases. The proprty is not as liquis as say stocks or crypto if you want out. Also make sure you have extra for closing costs you may not count on. FedEx contracts, paying for certified letters can add up more than intial tally. Also thing about putting more a little extra besides 10% for vacant property. And some times the tentants cause damage you won't anticpate or hold you up on rent.
Thanks! Yeah I am planning on doing what you are saying for the most part. Do you own homes you rent out? I see it says youre from NJ so Im curious. Not many places in NJ you can invest for good cashflow unless you want to bet on low income areas.
I currently have a property rent to own that is doing okay. The person living there pays me a small amount each month. They are responsible for all up keep and expenses. It is located in the state of Ohio in the city. Low income area but the purchase was cheap. There is a tiny profit in it. I had another one that was a house of horrors that was worse than a Dr. Jekyll & Mr. Hyde script.
If things change for me I will buy a true rental to keep, but learned a lot from the house of horror !
NJ is to rich for my blood and the tenant laws, make if very difficult to get rid of a problem child. I would not consider a rental in this state unless I find a Duplex and move into it.
I wish you luck and if you play cards smart, you will do okay.
I wouldn't fret too much much, I think so long as you're cautious and smart about this that you'll find a good flow of cash coming into your pocket for sure. It's definitely a much wiser investment of your money than stocks, lol. Either way, good luck, bud! I'll be looking forward to seeing your success with this :)
Yeah im looking to make sure the math is really conservative so I can account for mistakes and slowly optimizing the income over time. Well see how that strategy works out.
promising business once, good luck 😊
please support me @niacantik
Wish you the best for your venture.
very good publication @calaber24p I wish you good luck your project!
Good luck. Keep us updated. If you need responsible renters...let me know. I am one!
Lol
Joy
Very interesting to hear, I look forward to following your journey with this endeaovr!