New to investing

13 Replies

I'm 28 years old and I want to buy an investment property . I am a little confused in which direction to go with my decision . I am currently living in Westchester, NY but my ultimate goal is to move down to Florida ( anywhere that is nice in Florida ) . I know that the properties down in Florida are way cheaper than anything I can find up around here but I do have alternative locations around here like Stamford CT, Bridgeport CT, Norwalk CT but I wanted some advice from an experienced investor what is the best option to go with for buying a first investment property? Is it a rental ? A flip? My goal is to have some cash flow so I'm leaning towards a rental but I also don't mind doing a flip making a few thousand and adding it to my savings and possibly buying a small building with several units?

Can anybody give me any advice ?

I really appreciate it

Welcome to BP @Rafael De Oliveira

There are a lot of really good people on here from Fairfield County CT that I am sure will chime in on here with some advice on that market. 

Be sure to check out the BP podcasts if you haven't already. There are many topics discussed on there that will help you as you decide which discipline of REI is for you.

Medium rzt hc 6483Michael Noto, SalCal Real Estate Connections | [email protected] | 860‑384‑7570 | https://www.zillow.com/profile/Mike-Noto/

Would this be your first time buying a house?

If so you can apply for the first time home buyers bonus to help you out with that.

I personally will be buying a multi-plex in the future and am going to use that to minimize the down payment and use it as my primary residence to get a lower interest rate on the house. Then if you live in it for 2 of the last 5 years you can sell it tax free with the sale of personal residence loophole from the IRS and get the ball rolling in the right direction. Hope that helps.

I have a question. What do you guys think about living in a house you're rehabbing?

@Rafael De Oliveira

I think it's great you're starting the process and exploring some options, this is certainly the best place online to learn about real estate and meet other investors.

I think before you start trying to figure out where to invest you should think about what your goals are, and then develop a plan to achieve them. If you are hoping to get some supplemental passive income you could look to invest alongside other investors in a partnership or syndication, to build long term wealth maybe look at rental properties, be actively investing to replace your 9-5 income maybe rehabbing or wholesaling. Or maybe you want to do a combination or start with one strategy and grow into another.

You can do all of these things pretty much anywhere, so figuring out which strategy best accomplishes your goals is really the most important step. If you're not sure yet, the podcasts and blogs are a great place to hear about other people's stories and experiences.

Good luck!!

Medium rpm logo small jpg web optimized   white bgDaniel Raposo, RPM Homes, LLC | [email protected] | http://www.rpm-homes.com

First... I think you have the right idea.  You MUST live within your means.  If you can't do it in NY, then go somewhere else or possibly buy something smaller.  So many people wait until they can afford the perfect house.  If they started earlier and bought something they could afford, their equity and opportunities would have grown much more than they expected.  I always recommend the same.  Buy something you can afford... and something you can afford to fix.  Check out what you can afford in FL and evaluate what you're able to fix. 

You can do a buy-n-hold strategy, or a flip.  Generally I live in a house while I flip it.  Then I rent it while I play the market.  So I have a mixed strategy.  I think every house requires a different strategy.  However you should always be prepared for a long term rental if the market isn't favorable.  Either way, real estate can be an excellent investment.

Good Luck!

Originally posted by @Daniel Raposo :

thanks for your reply. What areas in Norwalk do you believe are nice rental locations? I have enough of a down payment to either do a flip or just jump straight into my first rental property. I live about 45 minutes away so I don't think I would need a management company to handle anything . Do you recommend any nice areas there? My uncle used to live in North Norwalk but that was like 10 years ago so I don't remember where it was that he lived and at the time I didn't care about locations of houses lol.... 

Any tips would be greatly appreciated!

Originally posted by @Darrell D. :

how do you feel about doing a flip on a property long distance? By long distance i mean i live here in NY and i would do a flip down in florida? I guess i would contact the local contractors maybe take a flight down there about mid way through to check up on things but would you know anything about flipping long distance? I heard a few of the podcasts today and I heard a few investors say that it's kind of tricky to flip at a distance and especially rentals if you don't have experience. Even with experience they were saying it can prove to be difficult.... ( not that anything comes easy but it is a little harder than doing something close by)

Originally posted by @Darrell D. :

how do you feel about doing a flip on a property long distance? By long distance i mean i live here in NY and i would do a flip down in florida? I guess i would contact the local contractors maybe take a flight down there about mid way through to check up on things but would you know anything about flipping long distance? I heard a few of the podcasts today and I heard a few investors say that it's kind of tricky to flip at a distance and especially rentals if you don't have experience. Even with experience they were saying it can prove to be difficult.... ( not that anything comes easy but it is a little harder than doing something close by)

I also have the same problem. I don't have much to invest anywhere in NYC. Multiplex units start anywhere from 800k and up. Any advice where to go to start investing?

@Rafael De Oliveira

I think Norwalk is a great area to invest. If you're thinking about single family rentals the higher end areas would be the Northern neighborhoods like Cranbury and Silvermine. There are also great areas for multi families in East and South Norwalk. Each area is kind of unique but I would be more than happy to talk more in depth about the town if you would like. Private message me and we can connect.

Medium rpm logo small jpg web optimized   white bgDaniel Raposo, RPM Homes, LLC | [email protected] | http://www.rpm-homes.com

Welcome to BP, Rafael.

Your investment strategy should depend on your needs as it relates to your ROI (return on investment). If you are looking for quick cash, I'd recommend buying "as-is" with the intent of renovating and listing back on the market. Here in SW Florida, most flippers are seeing 25% returns or more if they can pick up short sales or REO properties in need of serious work. The average property earns about 18-23% and I've seen some go as high as 47%.

You'll need to find someone in your desired market who eats, sleeps and breathes valuations to get a full idea of your cost in and your expected cash out.

A buy and hold strategy is good if you don't need large cash flow and don't mind looking at residual income. The rental rates won't make you rich, but they'll cover the cost of a mortgage plus a few hundred bucks in your pocket monthly. In the mean time, you'll be earning equity in the home, so if you do decide to cash out, you should have some money coming your way on the back end.

Personally, with average 1450 square foot 3/2 starter homes here in Cape Coral/Fort Myers still selling in the $140,000s (non-distressed) and rents coming in at about $1,200 monthly, a 10% ROI isn't bad... especially with that market increasing 8% last year and looking like another 8% this year.  Most of Florida seems to be trending much the same way.

Best of luck in your ventures!

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