What would you do for your first deal?

Question

Nick Zias · Answer

Account Closed It helps to hear that others have the same worries when they started out. Would you recommend spreading the money out over 2 lower priced properties in a lower income area or finding something nicer and more expensive where I would carry a bigger mortgage but has the ability to appreciate?

Account Closed · Answer

Hi Nick!

I guess it would really matter on what you can afford.  Since this is your first property, could you afford the mortgage and all related expenses if the property were to sit empty for say 3 months on a nicer place?  If not, then go the cheaper route, especially since this is your first property, and you will make mistakes.  Everyone does, myself included, on their first property.  With a nicer place, you get a better quality tenant and higher rents, though.

I guess my other question would be:  How much lower priced are we talking?

Account Closed · Answer

I can't speak about the NY Metro area, but don't let fear of missing a better deal deter you.  There will ALWAYS be a better deal out there.  I've done deals only to find ones that would earn me 10% more COC a few weeks after closing.  It's just the nature of the beast.

Just make your whatever deal you're doing's numbers are good in your eyes, and go ahead and pull the trigger.

The first one is always the scariest.  My first deal I walked out of the title company's offices thinking "Oh crap, what the hell did I just get myself into" even though the numbers were spot on perfect.

Once your first deal is done, then subsequent ones become much easier.

Hope that helps!