South Jersey Real Estate Investors Association

 A System and Discipline by Tony Youngs

I remember when I attended my first seminar back in the 80’s the speaker said you have to have a system and discipline. I knew what the system was because he was teaching it. But I did not know what the discipline was until I began to apply the system. The discipline is that you have to take the action to make the system work properly. Through months and years of trial and error, I now know what he meant by discipline. I had to discipline myself to always take action, even when I didn’t feel like it. Despite all the easier softer ways of doing things today, I still sometimes don’t feel like it. But I force myself to take action.

Many years ago, I found something on the internet that I printed and framed and it is on my office wall. It’s called, the “7 Excuses”.  I can’t do it, I’m not feeling it right now, I’m too busy, I’m too tired, There’s no guarantee it’s going to work, I’m not good enough, and my luck sucks. I still to this day do not know who the author is, but I read that from time to time to keep me motivated. I always check to see if I’m making excuses. Let’s break it down.

I can’t do it: if that’s what I’m thinking, I’m probably right, But if I change it to, I can do it, I’m also right. I must program my mind that I can do it, Then all I need to do is try, and if I run into a hurdle, I find a wa ... Read More…

The Impact of Student Debt on Qualifying Tenants

As an investor and housing provider, one of the things I fear most is a long-term vacancy. I’m
about to face the worst vacancy of my life… all three of my children will finally be out of the
home, with two of them heading out over the next few weeks in pursuit of educational
advancement. In today’s world, that advancement is usually accompanied by something else
we are becoming all too familiar with in the United States, student debt. My children will leave
school in 3 years with around $50,000 in student debt, which has become easier than ever to
access. Never before have I seen such willing lenders who are anxious to provide funding to
someone who statistically is less than likely to make the lender whole. As an industry, this
overfunding of student loans, and the high volume of defaults, will begin to affect how you and I
manage into the future.

Starting at the end of June, student debt will no longer be paused as a side effect of Covid, and
payments will again be called due. Over one-third of all Americans between the age of 18 and
30 have some type of student loan. Thirty percent of those loans were already delinquent
before the Covid pause. As a housing provider you are going to see the impact of this over the
next several months and years and need to be educated and ready to make the best decision
possible.

Having been a private investigator and housing provider my entire adult life, I have seen the
ebbs and flows ... Read More…

Why Use a Land Trust?

By Mr. Land Trust®, Randy Hughes

Do you remember 1969? Probably not. You may have been born after 1969 and did not find real estate as an investment until many years later. I remember the year 1969 very well. It was the year in which I purchased my first rental house. I was still in college and realized that I needed to break the cycle of poverty in my family.

First, I decided to get more education than anyone else in my family. So, I went to college and majored in business. While studying in college, I realized that most people in America who became wealthy did it through investment real estate. My initial interest was in apartment buildings, but since they took large amounts of down payment money (the “nothing down” concept had not been invented yet) I defaulted to the single family home as my IDEAL investment vehicle.

By the time I graduated from college I had acquired three rental houses and one small office building. After graduation I continued acquiring rental houses and titling them in my name personally. One sunny morning I woke up and realized the potential risk I was creating by owning all these properties in my own name. These were the days before you could access the county recorder’s office online. But, you could go down to the court house and walk into the recorder’s office to look up each owner of every property in town. Wow, was I stupid!

I began to research different ways of holding title to real ... Read More…

Land Trusts vs. Limited Liability Companies

By: Mr. Land Trust®, Randy Hughes

Recently I read an article by an attorney telling his readers not to use a Land Trust. He recommended titling your investment property in a Limited Liability Company. His reasoning was that Land Trusts are only a “deterrent” to a lawsuit and they do not provide “true” asset protection. The attorney went on explaining how any lawyer “worth his salt” would find out you are the beneficiary of a Land Trust as the result of a judgment debtor’s exam (which is a hearing in a court room . . . sometimes called a Citation to Discover Assets). The attorney writing this article concluded that you have “zero” privacy with a Land Trust and if you want privacy you should “save the expense” of a Land Trust and title your investment real estate directly into an LLC (Nevada or Delaware).

After more than 40 years of in the real estate investment business, I can spot an attorney who understands the law but does not have practical real world experience. I agree that LLC’s have better asset protection than a Land Trust, but Land Trusts have far better privacy elements than LLC’s. I use LLC’s in my business but NOT to hold title to investment property.

Let’s review the benefits of using a Land Trust.

Land Trusts:

1. Are NOT registered anywhere on the planet
2. Do not require a registered agent
3. Pay no franchise taxes
... Read More…

Myths about Land Trusts

By: Mr. Land Trust^®, Randy Hughes 

I write and teach a lot about the many benefits to using a Land Trust to hold title to real estate investments. There is a lot of misinformation in the marketplace about Land Trusts and a lot of bad advice given regarding these title holding trusts. After using these trusts for more than 40 years, I have found that the myths outnumber the facts. In this article I will dispel some of the myths that I hear over and over.

MYTH: Only bare land can be put into a Land Trust

TRUTH: Any real estate (or real estate related asset) can be titled in a Land Trust

MYTH: My lender will not let me close my deal using a Land Trust (LT)

TRUTH: This depends on if you are using borrowed funds from a lender that must qualify you in the secondary market. If you must meet secondary market guidelines it is true that you must close the deal in your name, but you can put the property into a Land Trust the day after closing. Once you have 10 secondary market loans (the maximum allowed) you must use a portfolio lender and they will let you close using your Land Trust.

Note: Bank of America WILL let you close four secondary market loans using a Land Trust to take initial title. However, you must use an Illinois Land Trust and the property must be in Illinois.

MYTH: Do I have to get a tax ID number for my LT?

TRUTH: The answer is no. Nor do you have to register your Trust Agreement with anyone.

MYTH: You can't do a Short Sale ... Read More…

The Road to Becoming a Successful Real Estate Developer

Nicole Rubin of  insureabilities.com. 

Real estate developers have always been an essential part of the commercial real estate industry. They are not only responsible for developing various projects and making them commercially viable but ensuring that all aspects of the project are completed on time and within budget. 

That’s a tall order and requires them to wear a lot of hats simultaneously! Becoming a commercial real estate developer requires a lot of time and effort. It takes years to learn the ins and outs of the business, but it is worth it because there is definitely money to be made, plus the personal satisfaction of seeing a project come to life. Today, South Jersey Real Estate Investors Association shares some tips and resources to help you get started.

A Little Background 

Successful real estate developers will normally hold a bachelor’s degree in management, business, marketing, engineering, or architecture. There are no undergraduate degrees in Real Estate Development, but there are master’s-level degrees in the field. You’ll almost certainly have to have a real estate license, which will require taking those courses and passing the state real estate exam in your state. An exceptional background or education in finance and project management and an entrepreneurial mindset will be important to your success. 

It ... Read More…

The Ultimate Investor Endgame

By Marc Halpern, Part Time Investors LLC

October 5, 2022

© 2022 Part Time Investors LLC. All Rights Reserved.

Okay, you’re a successful real estate investor. Now what?

You worked hard and you worked smart. Over the years, you successfully accumulated a nice portfolio of single-family home rentals and/or small multi’s that now generate more than enough positive cash flow to cover your routine household expenses plus a cushion. At the same time, your net worth grew, passing 7 figures as your property values appreciated and your tenants paid down your mortgages.

Great! Now what?

Have you reached your endgame? Or is there more?

Do you enjoy managing the portfolio of tenants that is an unavoidable part of your portfolio of rentals? Alternatively, are you thrilled paying a property manager 6%-10% of your gross rent which is 20%-35% of your profit, when all the financial risk is on you?

Most smart real estate investors who started from nothing and become successful (like me and maybe you?) get to the point at which their net worth exceeds, or greatly exceeds, $1 million, which defines them as “accredited investors” assuming that the million dollars doesn’t include the equity in their primary residence.

Most of these successful real estate investors enjoy more than $10,000 per month of semi-passive income. Let’s face it, the reality of landlording is that the income is not TRULY passive income. I view ... Read More…

Your Short-Term Rentals Can Generate 6x Gains 

by David Pickron

Rarely in life can the quick version of anything ever compete with the more time intensive “real deal.”  Think of any instant food and you will quickly realize that I’m telling the truth.  The same had held true for real estate investments for at least the last century… but times, they are a changin’.  As you look at your portfolio it may be time to consider transitioning some of your long-term holdings into short-term rentals, and here is why; short-term rentals can generate up to six times the amount of revenue as a long-term hold.  My average long-term hold properties cash flow at around $200 per month; my short-term rentals cash flow just over $1200 per month. Does that get your attention? 

As you consider transitioning from long-term to short-term rentals, you should examine the following factors to help ensure that the changeover is successful: location, needs, and saturation. 

LOCATION

The old mantra of location, location, location in relation to real estate has endured because it is true.  For short-term rentals, it may even be more important.  A friend of mine recently converted their 5,000 square foot custom home in a regular residential neighborhood in Phoenix, AZ  into a short-term rental.  In his mind, he had already cashed the checks after he listed the home on the popular short-term rental sites. But there wa ... Read More…

Image credit: freepik | Source: https://www.freepik.com/free-photo/house-with-sold-yard-sign_25625079.htm

When you consider all the things you need to know about flipping houses—be as prepared as possible. If you want a chance at success in this type of real estate investing, do plenty of research about the processes, the market, and the industry–especially when you are flipping a house for the first time.

We discussed in our blog post on investing in properties that real estate businesses require you to be financially capable and knowledgeable about the ins and outs of the industry. You may also need help in understanding how to manage and successfully rent or sell your property, especially when you're looking to flip homes. To expand your knowledge, you can consult business experts or study books related to real estate businesses to keep yourself updated. In addition, you can join educational or real estate networking communities, such as the one we cultivate on SJREIA, that share valuable and practical insights to help you get started.

Like most business endeavors, there are always outliers and other factors that can affect the goals that you may not have considered previously. So, in the spirit of being prepared, let’s talk about six things that could negatively impact your house flip and how to prevent them from derailing your project and potential profits.

Disclosure from banks

Many homes bought by flippers are foreclosures s ... Read More…

Image via Pexels

Investing in real estate can be a profitable way to grow your wealth, but it isn’t without its challenges. The guide below from South Jersey Real Estate Investors Association will answer your questions about investing in real estate as a beginner.

The Perfect Investment Property
Investing in real estate can be a great way to earn passive income; however, not all properties are created equal. Ideally, you’ll want to look for properties that generate positive cash flow — so you can cover your mortgage payments with your rental income alone.

Financing Your Investment Property
Once you’ve chosen a rental property and made sure it’s a good investment, you'll need to think about how you’re going to pay for it. There are various ways to finance your investment property, including buying with cash, using all or part of your existing home as collateral, or taking out a loan from a bank or mortgage company. If you’re planning on taking out a mortgage, be sure to review PennyMac loans and rates to get an idea of how much you can afford to spend.

Finding Help With Managing or Renting
One of your biggest tasks as a landlord is overseeing your property and addressing any issues that come up — whether it's handling maintenance, dealing with tenant questions, or deciding when to raise rents. Unless you’re planning on managing your investment property your ... Read More…