Am I doing too much at once?

Question

Hi Everyone,

I've been reading a lot and watching the podcasts. Everything has been so informative and I am super excited about all things real estate. I am from New York and as everyone complains, NYC is just way too expensive. I am interested in areas 3 hour radius from NYC preferably PA, CT, NJ. What areas in these states are up on the rise? BTW, I'm interested in rentals. I'm looking for a partner who has a great job and is willing to get mortgage under their name while I put the down payment and repair cost and you get10% of the net profit. Please give me suggestions. The first step is always the hardest to take but I don't want to also stay scared and not do anything. Any suggestions will help greatly.

Account Closed · Answer

You should contact a family member with the strategy.  You will be hard pressed to find people willing to gamble on you without a solid track record.  Even then, it will be hard to find people.

Jason Timmerman · Answer

Rinzin,

It sounds like you want to take very little risk and reap all the rewards.  It is going to be very difficult for you to find an investor with that sort of mindset.  In order to buy and hold rental properties you need to have a good amount of startup capital.  Why not start with wholesaling or flipping in order to build some experience and capital?  Buy and holding rental properties is really the end game strategy.

Franco Li · Answer

As a New Yorker, I can tell you that you have to be really good with the numbers. My startup works with a lot of investors who buy and rent in the NYC area, but most of them only do it to sit cash and bet on property appreciation. Cash flowing in NYC is very difficult, but it seems like you have a great idea looking at PA, CT, and NJ. I would probably not look at CT because its a difficult market but you may find some properties that can be flipped.

Also, are you asking someone to finance your investment and they only get 10%, or both of you guys will be on the mortgage? Irrespective of whether you put down the downpayment - which I understand would be substantial - you are hindering the person's ability to leverage for something elsewhere; who would do that? You're better off asking an investor to borrow cash.

Arpan Patel · Answer

I agree with the others above as far as the split. I think that is too little. I'd suggest a 50-50 split but to get to your actual question of where to look, have you tried Albany/Troy area? College town in Troy and Albany there is pretty stable work due to the capital. RPI kids pay pretty decently for rent and the units aren't the most expensive to obtain. Maybe worth a look. i was looking for my cousin and it was possible to find a 2 unit for about 50 that would be worth 150 if you did about 50 in repairs and would rent combine something like 2k. Could be great deals up in that area. Just a few thoughts and I hope that helps

Rinzin Dolma · Answer

Thanks for all the input. Greatly taken. Regarding the split, I was just ballparking. I have a better idea now. Thanks to you guys! I guess having a friend or family get the mortgage under their name is the way to go. I was looking for a FHA loan where I can put down around 10% plus the repair cost and we split the profit. I haven't looked at the areas you mentioned, but I definitely will now. I am a total rookie and I don't have much capital but I don't want to not do anything.

Brent Coombs · Answer

@Rinzin Dolma, are you "doing too much at once?" I think not. More likely: not enough.

What I mean is, the way I see it is that your contribution would be say: 30% of the value of the property (including rehab funding), but NOTHING else, right? No knowledge of where to buy, how to do due diligence, or ability to provide the other 70% of funding required, right?

Therefore, if anyone comes along with the ability to provide ALL those other factors, it may end up being fair that it would be YOU (not them) getting just 10% Cash-on-cash for your part?

Hopefully I'm just exaggerating to make the point. All the best for your investing journey...

Mark Cerminaro · Answer

Not sure the split would work out fair...are  you are looking for a partner with good credit to put name on loan and run property from start to finish for 10% of net profit? or do you mean you find property and do all work to get it rented and stable, and the only thing your partner does is put name on loan?

Anton Watt · Answer

I heard from my people in New york that New Jersey had a great market.

Am I doing too much at once?

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