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Multi Family Investment Property
Old 02-04-2013, 09:04 AM   #1
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Multi Family Investment Property

Hi all:

I am 37, my DH 40 and we have 2 young kids. We currently have about $600K in retirement savings and $150K in other stocks. We have a mortgage balance of $250K on our home, which I hope to pay off before I am 40.

We also have $150K in cash earning a whopping 1% interest rate. Our plan was to invest $100K of that in the market but, given the housing market and the low interest rates, we are thinking of purchasing a multi family home as an investment property. My husband thinks he will be kicking himself years down the road if we don't take advantage of today's rates. We live in Essex County, NJ (about 15 miles west of NYC) and are considering Montclair or the Caldwells and other surrounding areas.

Any thoughts on this as an investment strategy or tips from people who are landlords? We are at the very preliminary stage so I am just trying to gather a lot of infrmation before taking this plunge....

Thanks!
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Old 02-04-2013, 09:54 AM   #2
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Rentals (mostly multi family) did very well for us. The multis are a very efficient use of time and only require learning one septic/water/electric system rather than many. One roof rather than many to maintain. You benefit from the economies of scale. Buy no further than 15 miles from home if you plan to self manage.

We've tried to invest in the market and still have some money there, but it just doesn't make sense to me. Have this weird idea that if I want to do well I should put my efforts into making my investment do well; care for my garden.
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Old 02-04-2013, 09:56 AM   #3
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My dad had both multi-family and commercial real estate investments. He found the residential to be too much of a hassle and ultimately sold them and had just commercial properties which are much less hassle. While he has passed, he had a small commercial property that has a long-term tenant and it provides enough net cash flow so my mom can bank her SS.

So if I were to invest in real estate (other than REITs) I would probably tend to look commercial rather than residential.
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Old 02-04-2013, 10:16 AM   #4
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My experiences with residential investment real estate have been very, very unpleasant. I inherited it, and while my dad loved it, I don't share his sentiments. The real estate isn't the problem, it's the people that live in them. Of course, YMMV.
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Old 02-04-2013, 12:09 PM   #5
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Quote:
Originally Posted by SumDay View Post
My experiences with residential investment real estate have been very, very unpleasant. I inherited it, and while my dad loved it, I don't share his sentiments. The real estate isn't the problem, it's the people that live in them. Of course, YMMV.
True of most j*bs. Ain't the j*b, it's the bs.
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