Guidance on the first step towards Real estate Investing in NYC

3 Replies

Hello All,

My name is Abel, and I am a current part time college student residing in New York.

While many (including some of my family members) have suggested to me that I should wait until I finish school and get a career before investing, I believe that there is a way to get started without having to wait a couple of more years to fulfill my dreams and career goals. There are others out there my age (I am 21) who have hustled and started to build their foundations to where they want to be. Why can't I do the same?

With that being said, I have read, researched, and even watched some videos that this website has to offer, and I am sincerely pleased with all the guidance that there is for beginner investors such as myself. What I am seeking at the moment is for some advice and mentorship on how I can get started as soon as I can, here in the city. I am fully aware that New York is very competitive when it comes to the real estate market, and for beginner investors, it can be quite tricky to find an affordable way to start out, especially when someone (such as myself) has little money to spare (I have several hundred dollars in my checking with several thousands that my mother put into my savings).

My real estate goal (for the long term) is to build a portfolio of mostly pre-war walk up apartments (my interests are geared towards townhouses/tenements that contain over 6 families) in the lower west/east sides including parts of upper manhattan as well. My interest would be to preserve them and to make such properties livable and up to code, but mostly affordable as well. Some Landlords charge $4,000+ a month which is to my knowledge far above the average rent anywhere in the city! While I know and understand that it is unrealistic to get into such multi-million dollar properties from where I stand, I do have a plan as to how I can get started.

I firstly think it is wise to start in the outer boroughs, such as where I live in the bronx. Property values are around $200,000 to almost $600,000. In some cases it can reach to the higher 800,000s to almost 1 million, which is why I feel that I need to start my journey as soon as possible while the prices around my neighborhood are fair and cannot be out of reach. That being said, my street does get a lot of "ghost properties" over time due to poor management, illegal room conversions, and foreclosures. There is this property I have glanced at recently. It is a Two-Family dwelling building that has been illegally converted to about 10 SRO units and about 2.5 baths. The property has also experienced some damage on the side from a fire that started on the neighboring property a couple of months ago. It is currently vacated and dormant at this time. I was thinking that with such issues, I would be able to get it at a way cheaper price (trulia estimates it at $618,113) in order to get it operational again, and to get the appropriate licensing to have it rented out again. As time goes on, I would do the same with another property and so on until I can put down on a walk-up apartment building. My only problem is, I do not know how to start, nor do I have the money. That is one reason why I am writing this post.

I would like some guidance on how and where in New York I would be able to find the resources that are needed to acquire this property in terms of loans, maintenance, and attaining reliable tenants. I am fully aware and willing to put the time in for this to be a success and to build my dream of creating my portfolio of walk-up apartments. My only drawback is money, inexperience, and lack of a mentor, which brings me to the other reason of why I am here.

So that is it for the most part. It is indeed a lot to take in, but at the same time it means the world to me that there is a community of hard working people who look out after each other trying to accomplish the same goals. I am very honored to be a part of something so valuable!! I appreciate any help that can be provided for me, and with that note, I would love to do the same for anyone as I explore deeper and deeper into my journey.

Thank you all for your help, and I hope to hear from you soon!

Best Regards,

Abel

@Abel Nathaniel , my advice would be to finish college, save as much money as possible working while finishing college, seek out a career in a high income industry, establish credit, and save 20 to 25% for the down payment plus closing costs plus six months reserves. If the multifamily property is in good shape, consider an FHA mortgage with 3.5% down.

Jason Gines, Attorney in New York (#4767281)

@Jason Gines Thank You for your advice! I really appreciate that. I am currently establishing credit and it is of good standing, so I am ahead of the game on that. In terms of a career in a high income industry, what careers would you suggest I should pursue that can benefit me in terms of Real Estate Investing? I am working towards an internship in selling Real Estate with a brokerage, however I am open to other opportunities as well.

@Abel Nathaniel , that is a decision you need to make based on a lot of personal factors and where you currently are in your education.  I recommend spending time researching different industries and determine which you feel will be the best fit for you.  There are many people on Bigger Pockets who have shared their stories who have started out from a variety of economic and income positions, but in my personal opinion, the easiest way to accumulate assets is by having a high stable salary that allows you to easily obtain mortgages and put money aside to invest in properties.  Someone making 150k or 250k a year can invest more easily and also recover from mistakes easier than someone making 50k.  Especially if you plan on living and investing in NYC.

Jason Gines, Attorney in New York (#4767281)

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