Looking to get into REI, starting with $140,000.
New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes
Looking to get into REI, starting with $140,000.
Most Popular Reply
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
2y@Erik R Aho, you'll need to leverage debt. As noted above, a non-QM loan product such as DSCR could be suitable if you don't have a W2 track record. However, before you do anything or speak with anyone, read "Long-Distance Real Estate Investing" by David Greene. I suppose house hacking isn't an option for you at this time? Everyone on this site will be pitching their markets. Make sure to verify all information and ideally speak with an experienced investor who acquires in the respective state before proceeding.
67 Replies
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2y
Quote from @Jake Andronico:
Congrats on saving that much being so young!!! Such an awesome place to be.
I'm bias, but house hacking is the absolute best way to get started in my opinion. You've built something up to the point where you don't want to lose it, and house hacking is a phenomenal entry point with incredible tax benefits.
I've house hacked twice in Reno, NV and it's already changed my life.
Completely agree w/ @Nicholas L.Was wondering what type of financing you used for the house hacks?
- Realtor · Macon, GA · Member since 2020 · 25 posts · 13 votes2y
Erik, there are a ton of deals down here in Macon, GA in that price range. I work with mostly out of state investors (One of my clients is in New Jersey) so I can give you a hand if you’re interested in looking down here.
There are lenders in your area who can lend here in Georgia but I have some good, investor friendly, bankers down here is well.
- Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes2y
Quote from @Erik R Aho:
The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?
Hey Erik. Study the markets you are targeting and find investors/agents/property managers in those areas to network with. They can help guide you in specific local markets. I am an investor and RE agent in Fort Lauderdale, Florida so if this is one of your targets, I would happy to help out. But I'll be clear, it will be very tough to buy a cashflowing turnkey investment, but there are still some deals to be had in south Florida. 105k is plenty to get started with. Since you're only 20, you don't have a ton of credit history but there are still some loans you can get. - Manhasset, NY · Member since 2017 · 1 post · 2 votes2y
Hi Erik,
I am very impressed with your thoughtfulness on this thread. You are really thinking things through. I also live on Long Island and invest in out of state rentals. I think it would be difficult to house hack here due to the high cost of real estate; I also avoid investing in NY as it is not a landlord friendly state. Happy to share my excel model and my approach. Feel free to DM me.
- Investor · New England, USA · Member since 2022 · 16 posts · 15 votes2y
Couldn't agree more! My husband and I househacked our apartment in Boston when we moved to NH during the pandemic and BRRR'd our second property (which balance a bit and hold/ STR). We just bought a 3/1 in Harwich, MA (where my husband is from) and are house hacking on that property now. A lot of the posts make two really good points: (1) a lot of people are trying to sell their services to newbies, which is completely understandable but can be a train wreck (I almost made a bad choice in 2022 when I was a newbie on the site and trying to get my feet wet). Be open to learning but balance that with a healthy dose of skepticism and your own research/ edification. (2) househacking is the perfect first step. You can get in the market with less money, could have more time to do a Reno/ make updates and force appreciation, and someone else is helping cover your mortgage.
Growing up my dad would ask me “how do you eat an elephant?” The answer, “one bite at a time.”
Getting into REI is no different for the majority of people who do it. Start with what you can manage, be honest with yourself about the risk you are comfortable with, and go slow.
Good luck and feel free to reach out with any questions!
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Erik R Aho:
Quote from @Bob S.:
Quote from @Erik R Aho:
The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?
I too am originally from LI . I started buying rentals in the OH markets about 10 years ago, great double digit net caps, 25- 30% NETS back then. I now live in FL and do all my biz in OH, still getting 15- 20% nets. I just locked up a duplex rented for 19k a year, all in 80k. SF all in 70k, rented for 1300 sec 8, Much better than LI.
Hey Bob, did you start by investing out of state, or were you in Ohio when you started buying?
Never lived in OH,
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2y
Quote from @Ray Hage:
Quote from @Erik R Aho:
The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?
Hey Erik. Study the markets you are targeting and find investors/agents/property managers in those areas to network with. They can help guide you in specific local markets. I am an investor and RE agent in Fort Lauderdale, Florida so if this is one of your targets, I would happy to help out. But I'll be clear, it will be very tough to buy a cashflowing turnkey investment, but there are still some deals to be had in south Florida. 105k is plenty to get started with. Since you're only 20, you don't have a ton of credit history but there are still some loans you can get.Thanks!
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2y
Quote from @Natalie Medved:
Couldn't agree more! My husband and I househacked our apartment in Boston when we moved to NH during the pandemic and BRRR'd our second property (which balance a bit and hold/ STR). We just bought a 3/1 in Harwich, MA (where my husband is from) and are house hacking on that property now. A lot of the posts make two really good points: (1) a lot of people are trying to sell their services to newbies, which is completely understandable but can be a train wreck (I almost made a bad choice in 2022 when I was a newbie on the site and trying to get my feet wet). Be open to learning but balance that with a healthy dose of skepticism and your own research/ edification. (2) househacking is the perfect first step. You can get in the market with less money, could have more time to do a Reno/ make updates and force appreciation, and someone else is helping cover your mortgage.
Growing up my dad would ask me “how do you eat an elephant?” The answer, “one bite at a time.”
Getting into REI is no different for the majority of people who do it. Start with what you can manage, be honest with yourself about the risk you are comfortable with, and go slow.
Good luck and feel free to reach out with any questions!
Thanks for the reply, and I love that quote from your dad! Just out of curiosity, what loan are you using for your current househack?
- Member since 2024 · 17 posts · 5 votes2y
Quote from @Milton Chamberlain:
Quote from @Erik R Aho:
Quote from @Milton Chamberlain:
Hi Erik, Happy to chat with you about your goals and how investing in real estate can help you. Give you any feedback you may want.
Hey Milton, I see that you're an agent. Do you work with many investors or do you own any properties yourself?
I own 3 SFR as investments in Columbia MO, along with my 4th primary SFR in KCMO. two of the 3 investments have been gutted and rehabbed. I Bought a dental practice with my wife 2 years ago, so once we are no longer poor from that, plan is to convert 3rd property into a STR. Then plan is to merge some City lots I own in Columbia MO and build new construction triplex.
Then my plan is to begin investing in my local market of KCMO. For now though, I just assist local and OOS investors underwrite deals, and act as boots on the ground for my OOS investors. I am well versed in laws pertaining to STR regulations, which are extensive in my market.
Cool plan with the city lots. Good luck!
- Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes2y
Quote from @Erik R Aho:
The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?
That's great, Erik. Have you considered investing in the Ohio market at all? The prices are very affordable here making cashflow attainable.
- Investor · New England, USA · Member since 2022 · 16 posts · 15 votes2y
My dad has a ton of them:)
Because we house-hacked, put 20% down, and have stable w-2 income we were able to get a 30 year conventional with a 3-2-1 buydown credit from the seller.
If you are a first time homebuyer you should take a peak at the loan products geared towards people in your position. You’ll likely have a lower down payment requirement (I am sure you will but as an attorney I am always skeptical of making and relying on definite statements, especially where I don’t know all the relevant facts).
I know a lot of people that house hack with multi families but if cash flow and cost are a barrier and you don’t find room mates, look into a single family and treat every room as a “door.” Obviously this means you are staying in or near your market unless you are willing to move.
- 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Erik R Aho as several have already mentioned, buy a 2-4 unit and live in one unit while renting the rest.
The experience from this will be more valuable than just about any college education!
Logical Property Management4.9454 Reviews - Member since 2024 · 17 posts · 5 votes2y
Quote from @Natalie Medved:
My dad has a ton of them:)
Because we house-hacked, put 20% down, and have stable w-2 income we were able to get a 30 year conventional with a 3-2-1 buydown credit from the seller.
If you are a first time homebuyer you should take a peak at the loan products geared towards people in your position. You’ll likely have a lower down payment requirement (I am sure you will but as an attorney I am always skeptical of making and relying on definite statements, especially where I don’t know all the relevant facts).
I know a lot of people that house hack with multi families but if cash flow and cost are a barrier and you don’t find room mates, look into a single family and treat every room as a “door.” Obviously this means you are staying in or near your market unless you are willing to move.
We can't rent by room in NY. Can get you in major trouble
- 2yMin ZhangBusiness MemberReal Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
Hi Erik! Welcome to BiggerPockets! You're in the right place to learn about real estate investing.
I like starting in the Midwest because it's affordable and offers good cash flow. Following David Green's Core 4 strategy (realtor, contractor, property manager, and lender) gives confidence to invest anywhere. I focus on Columbus, Ohio, which has seen significant growth, especially with tech giants like Intel, Meta, Amazon, and Google setting up operations, driving up property prices and job opportunities. I also invest in Cleveland and Dayton. Let me know if you need assistance!
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2y
Quote from @Michael Smythe:
@Erik R Aho as several have already mentioned, buy a 2-4 unit and live in one unit while renting the rest.
The experience from this will be more valuable than just about any college education!
Thank you for this, I really want to do that but prices in my area are so high it would be tough to make it work, but I'll definitely look into it because that would be ideal.
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2y
Quote from @Natalie Medved:
My dad has a ton of them:)
Because we house-hacked, put 20% down, and have stable w-2 income we were able to get a 30 year conventional with a 3-2-1 buydown credit from the seller.
If you are a first time homebuyer you should take a peak at the loan products geared towards people in your position. You’ll likely have a lower down payment requirement (I am sure you will but as an attorney I am always skeptical of making and relying on definite statements, especially where I don’t know all the relevant facts).
I know a lot of people that house hack with multi families but if cash flow and cost are a barrier and you don’t find room mates, look into a single family and treat every room as a “door.” Obviously this means you are staying in or near your market unless you are willing to move.
I've never actually heard of a 3-2-1 buydown. I just looked into it. Sounds interesting. And I'll look into renting by room. However NY has such terrible landlord laws
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2yHey James, I couldn't find anything regarding the legality of renting out a room or 2. I've gotten conflicting answers
Quote from @James Aravena:
Quote from @Natalie Medved:
My dad has a ton of them:)
Because we house-hacked, put 20% down, and have stable w-2 income we were able to get a 30 year conventional with a 3-2-1 buydown credit from the seller.
If you are a first time homebuyer you should take a peak at the loan products geared towards people in your position. You’ll likely have a lower down payment requirement (I am sure you will but as an attorney I am always skeptical of making and relying on definite statements, especially where I don’t know all the relevant facts).
I know a lot of people that house hack with multi families but if cash flow and cost are a barrier and you don’t find room mates, look into a single family and treat every room as a “door.” Obviously this means you are staying in or near your market unless you are willing to move.
We can't rent by room in NY. Can get you in major trouble
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2yYeah I can see how Ohio can be a great market due to the prices. Maybe near a college town such as Dayton? It would be tough making all that happen all the way from NY and a lot of people on this thread think that OOS investing is pretty tough for a first time buyer.
Quote from @Zeke Liston:
Quote from @Erik R Aho:
The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?
That's great, Erik. Have you considered investing in the Ohio market at all? The prices are very affordable here making cashflow attainable.
- Member since 2024 · 17 posts · 5 votes2y
Quote from @Erik R Aho:
Hey James, I couldn't find anything regarding the legality of renting out a room or 2. I've gotten conflicting answersQuote from @James Aravena:
Quote from @Natalie Medved:
My dad has a ton of them:)
Because we house-hacked, put 20% down, and have stable w-2 income we were able to get a 30 year conventional with a 3-2-1 buydown credit from the seller.
If you are a first time homebuyer you should take a peak at the loan products geared towards people in your position. You’ll likely have a lower down payment requirement (I am sure you will but as an attorney I am always skeptical of making and relying on definite statements, especially where I don’t know all the relevant facts).
I know a lot of people that house hack with multi families but if cash flow and cost are a barrier and you don’t find room mates, look into a single family and treat every room as a “door.” Obviously this means you are staying in or near your market unless you are willing to move.
We can't rent by room in NY. Can get you in major trouble
My cousin does it. Makes bank, but if HPD catches you here in NYC at least you can get fines. Just pulling something from the internet (don't trust everything you see so take this with a grain of salt I'm not a lawyer): "If the building in question isn't officially designated as an SRO or hotel, it is illegal for landlords to rent individual rooms to tenants for a number of reasons, including that it could allow landlords to evade the maximum rent permitted by the Rent Stabilization Law and Code."
Also evictions could become a nightmare as well. My dad dealt with a few years ago. Rent by room is doable but tricky and possibly could lead to other issues. I'd contact a lawyer to be certain before you actually consider doing it. Perhaps could be better to live in one apartment of a multifamily (or even a basement of one), live broke for a few years, fix it, then do it again til you have enough money coming in. - 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
there are lots of free, concrete steps you can take -
1. call a few lenders. talk through your situation with them. tell them you're not ready to have your credit pulled and you just want to understand what programs you might qualify for.
2. call a few agents. explain your goal of house hacking. see how they respond. pick your favorite. start looking at properties. look at 3-5 properties every weekend for the next 6 months.
good luck
- New to Real Estate · Long Island, NY · Member since 2023 · 23 posts · 14 votes2y
Quote from @Nicholas L.:
there are lots of free, concrete steps you can take -
1. call a few lenders. talk through your situation with them. tell them you're not ready to have your credit pulled and you just want to understand what programs you might qualify for.
2. call a few agents. explain your goal of house hacking. see how they respond. pick your favorite. start looking at properties. look at 3-5 properties every weekend for the next 6 months.
good luck
Hey Nicholas,
I've spoken with a few lenders. I'm going through a pre-approval process right now just out of curiosity. Another lender has told me about DSCR loans, but they wouldn't work in my area due to low rent to price ratios. And I should definitely be more active in looking for houses in my area.
THanks for the comment!
- 2yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
Quote from @Erik R Aho:
1- The reason I am looking more into scaling a real estate portfolio in comparison to my active income right now is because my active income isn't very scalable. I am a server/bartender and the only way to scale that is with more hours. But yes I do completely agree about income/expenses and really keeping an eye on that savings rate.Quote from @Travis Timmons:
1. Whatever allowed you to have $105k at 20, do more of that. Your primary focus right now should be maximizing your income and keeping expenses low.
2. House hack in your appreciating market and forget the idea of cash flow hundreds of miles away. We all chase cash flow in the beginning only to own something long enough to watch it go up $100k+ in value. Once that happens, you figure out that cash flow can't touch appreciation. And the long term cash flow in appreciating markets is better bc the rents increase exponentially faster than in stagnant, cheap markets. Ask yourself, "Which property would I rather own in 10 years?" and let that guide your decision.
3. All of this is harder and takes longer than strangers on the internet make it seem. It's a long game. Slow and steady still wins the race.
2- I've thought a little bit about this but haven't really considered it heavily because in my area, a duplex for example is about $700,000. Also I don't think I would qualify for a loan that high and even if I did I would be burdened with crazy high monthly mortgage payment even with a tenant paying rent. If maybe my income was a bit higher (I take home about $6,500 a month) it would be a more feasible option. Do you think it's wise to hypothetically save up a large down payment while also waiting for interest rates to decrease in order to make the move into a house-hack? Or do you think in 2 years my $200,000 down payment would've just been better in the stock market earning a historical average of 10% (With dividends reinvested, not adjusted for inflation). With the whole "rent vs buy dilemma" these are just some things I've been considering. Because right now I'm still living at home but don't want to be 2 or 3 years from now. Thank you for the pros of a house-hack on Long Island.
3. Yes, you're absolutely right, this isn't a quick way to make money I'm finding out. Thanks for the reply Travis.Real estate only beats index fund investing (by enough to make it worth the hassle - or at all) when you use leverage (ideally, 4 to 1 or 5 to 1 leverage on an investment property), and the value of the real estate goes up. On a house hack where you can get in for as little as 5% down, the returns get silly with appreciation. You could theoretically (if your DTI is good enough) control a $1M asset for $50-60k. Appreciation of 5% = a 100% return on your invested cash. The inverse is true if it goes down, but the key to getting outsized returns is leverage and appreciation. Otherwise, you're better off to toss that $100k+ into an index fund and avoid the hassle factor.
I'm not saying to 100% avoid out of state or long distance investing, but I'd encourage you to look at cash flow as a way to keep the property and appreciation as the way to build real wealth.
- 2yAbel CurielBusiness MemberReal Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
Quote from @Erik R Aho:
The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?
Hello Erik!
You are not alone... many New Yorkers come across the same dilemma. The Two most common approaches I see are:
1. Invest in a low price-point market within a few hours of driving distance. i.e. Connecticut, New Jersey, Upstate NY (Albany, Syracuse)
2. Househack locally. Gain experience in acquiring and managing property. Potentially save on monthly cost of living while building equity in a fast growing market. Nassau county made it to the top 10 for highest YOY appreciation when compared to '23
To feel confident and gather as much knowledge as possible on your options, I'd recommend connecting with a lender, local investors (in your target market), investor-friendly agents with a pulse on your target areas.
All the best to you on your next move!
Abel
REbuild Team - eXp Realty5234 Reviews - 2yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Erik R Aho:
The thought of buying cash flowing rental properties interests me. However, I'm from Long Island, NY and cash-flowing deals are very hard to find. I'm considering purchasing out of state but don't know which markets I should look out or how to find deals in said markets. I'm 20 years old and have about $105,000 outside of retirement that I'd love to do something with. However I lack the confidence and knowledge to get started. Any tips?
Hey Erik, totally can relate with you being from an expensive real estate market - I moved to Columbus a few years ago (from Portland, Oregon which was super expensive) to become a full time real estate investor, and ever since, I've completed quite a lot of BRRRRs, flips, and own a successful rental portfolio here in Columbus Ohio. There's so many catalysts for population and job growth (Intel, Honda, Amazon, Nationwide Hospital, etc). I can definitely tell you there's still a lot of positive cash flowing and 1% rule deals and you get amazing appreciation. As an investor and agent here in Columbus Ohio, if you have any questions or want to connect, definitely reach out!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Erik R Aho investing OOS as a newbie is a recipe for disaster! :(
So, many agents, property managers, contractors, etc. will either try to screw you deliberately or via their incompetency.
If you want to chat about how to navigate OOS investing as best as possible, with the full brutal truth, PM us.
Logical Property Management4.9454 Reviews
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