[quote name='javeryh']I know. I've been thinking about taking the plunge for months now but I'm not sure I could handle it with my full workload. Ideally, I want to put a down payment on a 4-6 unit apartment building and then fix the rents so combined they cover the mortgage payments (and maybe a little more for me). Depending on what market bonus is this year I could probably swing between $40k - $50k. Is that enough to get me in the door (assuming I get a bank to loan me the rest)? I'm thinking somewhere in Hoboken would be the best bang for my buck except there is likely to be a ton of turnover... what do you think?[/QUOTE]
Well, it depends. Whatever property you look at, that down payment should cover at least 18-20%. You can get it lower than that obviously but if you plan ahead of time, if you are only required to drop down 10-15%, that remaining $$$ can be used either to immediately improve the quality of the property or set aside in case of any major unforeseen damage in the initial appraisal so that no extra $$$ comes out of your pocket except the initial investment and that should really be the ONLY money you invest in a property. The rest should come from accumulated rent to cover mortgage, etc. I don't know the Hoboken area so you'll hafta ask someone local that can help you better but I like to stick around college towns or areas of high growth. You can go to the local municipal building and see the city development plans. As a lawyer, I'm sure you're more than familiar with that kind of place.
You should be able to see in which direction the city is developing and basically park yourself right in front of that development.
For example, right now, in the college campus one of my properties is near, the engineering campus is developing (read: constructing) more facilities and is expanding in a northeast direction. My property is more east of that development but still no more than 2 blocks away from the new eventual edge of the engineering campus. That makes my property a hot commodity amongst engineering students as I offer highly competitive prices vs. the campus apartments and sometimes offer combination incentive packages so that utilities are sometimes included (depending on the contract). That 'hotness' allows me to keep my place virtually full year round and never worry about tenants. Yeah, they can get rowdy (being college students) but, as I said, I already have enough set aside to cover most major repairs plus I make their security deposit nonrefundable so only serious takers need apply.
Also, don't invest in a property directly - do it as a corporation so you have some legal buffer (or a corporation with several subsidies to increase the buffer even more) in case some idiot tenant tries to sue you because he licked his finger and stuck it in a power outlet... just to see if it'd hurt (and yes, this happened to me and was obviously thrown out for being frivolous and he was, of course, evicted :lol: but for other reasons) but, I'm sure you knew that already right?
Even with a full workload, managing a small 4-6 unit building shouldn't take more than 2 days out of the month. It's only when you start expanding and managing more and more that it starts to become a burden. But by that time you should've started hiring/delegating other ppl to handle the more mundane tasks anyway.
People get intimidated because properties are worth $300K and up but really, the only thing you hafta worry about is the initial down payment. If you can handle that, the rent should take care of the rest provided you did the homework and made sure it was a viable property to begin with.
