Need Advice on How to Start

[Burak Kilic]

Hello all!

I need some guidance to figure out my next best steps to enter the real estate space. Me and my wife looking for our first (or couple) investment properties (rather then traditional buying one home). We are from Brooklyn, NY and as you all probably now, market is crazy high priced here. To give some context, we have some cash (around 300K+) but I'm in a position that unfortunately effected by the recent layoffs and looking for a new job so waiting for a bit before we start this. But I would like to use this time to plan out and invest myself to get some knowledge on real estate. 

We love New York and plan to live here for a while more, but we decided it is probably better to keep renting and buying properties for investment that can provide some cash flow out of state. Florida, Texas and Connecticut are some of the markets that I've been hearing a lot about from friends, but I have no idea which state would be the ideal place to start investing. My wife is an interior designer, and we are actually very interested in short-term investments (apartments), so we are very open to any advice! Thanks already.

[Rick Bassett]

For your first investment(s), you might want to consider having them close enough for you to interact with them in person, at least through the learning phase. Many other folks do long-distance investing exceptionally well; it's not my thing; I prefer to keep all of our RE investments within 45 mins of our home base. You may want to consider value investments in Norwalk, Stratford, Shelton, Ansonia, and Derby, Connecticut, to name a few, as finding properties where the numbers work is possible in those towns/cities. If you want to buy on price and for cashflow then look at Bridgeport. 

Also, if you're planning on financing your investments (mortgage), you will probably need that new W2 for a while before a lender will take a chance on you. 

[Burak Kilic]

Thank you Rick.

I completely agree and know that I have to wait for awhile to be able to considered for investments. My only concern here is that based on what I've read in BP and from general knowledge in real estate investments is NOT to buy a property in all cash, rather get better deals with mortage. But since that might be out of the question for awhile, it might be logical to invest somewhere that we could afford all cash, rather than wait for a mortgage option to come up.

[Mohammed Rahman]

Hey @Burak Kilic - so I was in a similar position in 2019 with a bunch of money saved up and not quite sure how to get started in real estate. The forums are extremely helpful, but they will point you in a million different directions because that's the nature of REI... there's more than one way to slice the cake.

What I recommend for you is two cheap and effective things: 

1. Read the BP books available, as well as other REI books you can get your hands on. This will help you figure out what you and your wife want to focus on in REI (is it cashflow, BRRRR, buy & hold, flip, etc.)

2. Attend local meetups, NYC always has a couple of events going on. Getting face-to-face interactions with other investors is infinitely better than reading and interacting online because the nature of the conversation can go a lot deeper a lot faster. You might come out of your first networking event realizing that real estate investing isn't for you. I'm also hosting my first one for newbies later on this month, if you're interested check it out here: https://www.biggerpockets.com/...

[Jason Archer]

Welcome Burak, 

If you find yourself looking at opportunities in Southeastern CT feel free to look me up. We manage STR's along the coast and am always happy to share advice with fellow BP members.

[Chris Webb]

Hi @Burak Kilic, I have two resources for you. One is the One rental at a Time YouTube channel where you can access several millionaires who actively invest and learn what they are doing. 2, my channel on Cash on Cash return, InvestLYH. This channel is designed to help investors quickly assess CoC return for their market. This way, you can find out how hard the money is working for you.

[Rick Bassett]

Quote from @Burak Kilic:

Thank you Rick.

I completely agree and know that I have to wait for awhile to be able to considered for investments. My only concern here is that based on what I've read in BP and from general knowledge in real estate investments is NOT to buy a property in all cash, rather get better deals with mortage. But since that might be out of the question for awhile, it might be logical to invest somewhere that we could afford all cash, rather than wait for a mortgage option to come up.

Leverage is a great thing, but you have to get positioned to earn that from a lender, and you don't have a track record, or a job, yet. In the eyes of a lender, you are a risk and will pay accordingly.

Our model has always been to buy investment homes for cash and then to refi them after they seasoned and appreciated a bit, then to use those funds to buy more, but we've worked with many other investors who want to be highly leveraged out of the gate. Pick the approach that works for your specific situation and goals.
 

[Tommy Feraco Jr]

Hello Burak Kilic!

It sounds like you and your wife are interested in investing in real estate in order to generate cash flow. Investing in out-of-state markets, such as Florida, Texas, and Connecticut, may be a good idea as these markets often have lower prices and higher potential for rental income compared to the Brooklyn, NY market. However, it's important to do your own research and due diligence before deciding on a specific market or property.

In terms of researching markets, you can start by looking at data on population growth, job growth, median home prices, and rental prices in the areas you're considering. Additionally, you can also look into the local real estate market conditions and trends, such as the number of foreclosures, new construction, and overall supply and demand.

You can also reach out to local real estate agents and investors for their perspective on the market, and consider visiting the area in person to get a better sense of the neighborhoods and properties you're interested in.

As for short-term investments specifically, you may be interested in looking into short-term rental properties such as vacation rentals or where there is a driving need for short term occupancy. These types of properties can generate higher rental income than long-term rentals, but they also come with more management responsibilities, may require a larger investment upfront, and more month-to-month expenses.

Finally, since you're in a position that affected by the recent layoffs, it's important to be realistic about your financial situation and make sure that you can afford the investment, as well as manage the property effectively. It may be beneficial to seek out mentorship or advice from experienced investors or real estate professionals (thats where meetups come in!), as they can help you navigate the process and avoid potential pitfalls.

[Napoleon DeCiutiis]

Burak,

Get a copy of Short Term Rental, Long Term Wealth by Avery Carl.  Let's get you on your path to success and away from your W2!

Your money will go a LONG way on the Emerald Coast of Florida. STR/Renting/Vacation is what has kept our economy going for over 70 years now.

[Michael Jacobs]

This might upset many AIRBNB professionals here but I believe for anyone who is starting out in the real estate investing world, please focus on stability and a fixed income before trying to go for the "big" returns in the Airbnb space. 

Build a healthy portfolio with a fixed return before betting on the ever changing airbnb landscape. 

[Jason Archer]

Quote from @Michael Jacobs:

This might upset many AIRBNB professionals here but I believe for anyone who is starting out in the real estate investing world, please focus on stability and a fixed income before trying to go for the "big" returns in the Airbnb space. 

Build a healthy portfolio with a fixed return before betting on the ever changing airbnb landscape. 

I agree with this move, as someone who manages STR as well as traditional rentals, we see owners with dollar signs in their eyes and not ready for the volitivity of STR's.