Posted by Raphael on February 13, 2005 at 14:18:17:
Hi Anne.
Thanks for the reply. In answer to your question I am not in school in the sense that one day I will graduate. I am studying my religion for as long as I can financially do it.
As to reading, I’ve read extensively on real estate issues. I have reached the point that most of any new book is old stuff. (I still read for the new twists, though). As to researching the are I’d like to invest in I find it hard to do with my time constraints and the distance to that market.
My question really is whether I could pursue purchasing properties in the couple of weeks in the summer and then devote only 2-3 hours a week managing the manager.
Does anybody have any exp. with such a situation?
Hi there. Sorry if this is long, but please bear with me.
I need some help deciding to invest or not. I am 25 and have read widely on the subject of REI and finance in general. I suscribe to a Kiyosaki based view of personal finance. I firmly believe that real estate could help me gain assets and passive income and would like to acquire those before I pick up more liabilities (like buying a personal residence, for instance). The problem comes when we discuss time. More important to me than the state of my finances, is my ability to continue in my divinity studies. (I’d rather live my entire life in poverty if I can successfully stay in my religious studies and still support my family.) My studies give me a break between 2:00 and 3:00 every day and Friday afternoon for a couple of hours (if I arrange babysitting) and maybe a little time on Saturday night. I also have time in between semseters - three weeks in the summer and two weeks in both April and September.
What I am looking to invest in is 1-4 family rentals and hold them for their income stream. Eventually, maybe I’ll trade them up for a building, but I’m really looking for the cash flow more than the appreciation. In Brooklyn the real estate is sky high and out of whack with rents so I’m forced to look across the Hudson in New Jersey (about 40 min away). I actually saw a deal for a three family with good cash flows (numbers available if you need it) in Newark for $300K.
Now for the question: should I jump at the road to financial freedom or am I out of my mind thinking that I can successfully manage this investment a half an hour away? My lack of available time would rule out my own active management so I’d be a spanking brand new newbie hiring a management company to run it. With such a model I could theoretically buy 1-2 houses a year and in time would be able to build enough of an income that my wife would not have to go work to put food on the table. The question is whether that is realistic or just wishful thinking.
For this I need the help of you - the experienced, veteran replier of this useful message board. I thank you greatly for any help offered.
Re: To do it or not do it - that is the question - Posted by Anne_ND
Posted by Anne_ND on February 12, 2005 at 08:57:02:
Hi Raphael,
You don’t mention how long you still have in school, but I’d suggest you do as much research (visiting the area in which you plan to invest, going to real estate investment clubs, etc.) as your present schedule allows and then start the work of investing when you have more time.
Many veteran investors recommend that you manage your first few properties yourself so that if you ever do hire a property manager you will know what it entails and be able to determine whether they are doing an honest or competent job for your money.
Believe it or not, the first few months or years of reading/researching is not time wasted or investements deferred, you will need to take these steps to do investing well anyway. Since you have limited time now, make the most of it by learning your area.
Re: To do it or not do it - that is the question - Posted by IB (NJ)
Posted by IB (NJ) on February 11, 2005 at 21:56:11:
I’ve never hired a management company. I have a friend who purchased a 6 unit in East Orange and tried to get a management company to manage it but it didn’t work out. The problem is that these companies don’t make too much money when there’s only 3 units in your property and 50 in someone else’s. Guess who’s property gets prioritized.
I would stop down at GSRIEA (local REI club - they’re on the web) and talk to some of the Investors there. In fact there’s a seesion in the beginning of the meetings where you get to stand up and ask if anyone in the house has a property mgmt. company. You can also talk to other Investors to see what their experiences are.