Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
Hey everyone! I want to begin my investing career but not sure where to start , I make about 20k/year , I currently am renting in nyc for $700 a month , I have 15k cash saved up . And another 5k in my Roth IRA . I️ was wondering if you were me , what would be the best way to put myself in a better position for the future . My ultimate goal is to build up enough cash flow to where I no longer have to work for other people, do you think I️ should try to buy a rental , or should I️ try to get my foot in the door somewhere here in nyc so I️ can eliminate my rent . Any input , any advise is welcome!
Also , moving out of NYC is not an option . I live with my parents and they do not drive, so staying in nyc is the best option for me.
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
@korie Elvis Vasquez
Yes I did meet her in NYC , but I think you guys are misunderstanding , we are not investing together . I will be investing and she will just help me secure a loan , all of the money in will be my money
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Daniel Amberg wow man ! Great job , I’d be lying if I said I’m not as ballsy as you are . And I’d probably hesitate before doing that ! But wow I’m glad it’s working out for you
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Amy Beth I’m sorry I think your misunderstanding, I’m not being forced . This is my choice to take care of my parents and make their life easier even if that means making things a bit harder for myself , don’t you think your parents would make the same sacrifices for you ? Maybe it’s a culture thing , maybe it’s coming to America as an immigrant , watching my father work 2 jobs , about 80 hours a week . Not sure how much longer they have on this earth , so I really want to make it as comfortable as I possible can
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Joseph Kline I didn’t know you can use potential rental income toward your mortgage, this would make the process a lot easier wouldn’t it , even if I am trying to start out in NYC
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
@odie thanks ! I’ll look into that book , yes I’m try my best to forge connections right now , meeting new people . Trying to find a mentor , good people . A lot of the people here have been so helpful and nice ! It’s amazing
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Faysal Alam most lenders don’t use rental income towards your income until you’ve had it for 2 years. However some will do it right away.
If that’s the case usually their formula looks something like this rent *.75 - PITI = additional income added to your top line income
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
@walter after all my expenses I’m projected to save 25k a year , as for consumer credit cards , I have about 1k in debt . But I’m not paying any interest on it so no point in rushing to pay it off , you are right , I defiantly do need to get more organized and set specific goals for myself .
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Caleb Heimsoth so based off that , and me combining my income with 3 other people to get Atleast 70k a year plus the rental income , do you think I’d be able to house back in NYC ?
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
@Faysal Alam are they just giving you money? In order to qualify for a loan using that income usually they’d all have to be on the loan which can get very messy.
To househack you typically need 3 percent or 3.5 percent minimum, personally I'd want to do 5 percent down conventional to avoid PMI.
Idk what a house costs in NYC. So let’s assume it’s 500k. You’d need 3.5 percent or 17.5K plus 6-8k in closing costs.
Then at say 4.5 interest rate plus around 150-200 in PMi in this example your loan payment would be 2444 plus the Pmi plus taxes and insurance. So if you can find property for less than that go for it otherwise no I don’t think you should househack in that price range. Probably under 300k.
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Caleb Heimsoth the way I’m looking at is , I have a long term person to share my own apartment with like I am now , that person would be contributing $1000 a month from the unit I’d be living in , and then the rental income from the other until . So even if I have to put down 30k I’d free up 700/month cash flow
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
@Faysal Alam I’m not saying househacking isn’t a good idea I’m just saying it’s hard to know if it would work or not because idk what taxes insurance, or housing costs in your area. If those are high it could not work.
Clermont, FL · Member since 2017 · 37 posts · 43 votes
8y
@Faysal Alam - You've gotten a lot of advice but one thing I haven't heard is - Use the situation with your parents as your strength, not as a weakness! If cultural (and girlfriend!) allows or even encourages it, then take advantage! You have 3 other people in your immediate family that will follow your lead, as the first generation english speaker and from what it sounds like, the financial head of household. This is an incredible boon to someone so young! I am jealous.
My advice - find a community outside of NYC that supports your parent's native language. There has to be other areas, cities even, that support a neighborhood of folks that speak the language - even moving from NYC to an area like Orlando would cut your spending dramatically. Orlando is a large melting pot and your aging parents may enjoy the warm weather on cold NYC bones. They may make more friends that are closer to their age. Most cities area cheaper than NYC - so take your time to do your research and see if you can get out of NYC, maybe leverage your position as the head of household. I realize that a crux of older cultures is that the elders are always in a leadership position, but your situation may be different and don't want to presume.
If you absolutely cannot leave NYC, maybe you can move just outside NYC? There are a lot of ways into the city - boat, train, bus, and each increasingly cheaper. Can you work outside of NYC in a similar environment? Say you are a restaurant server, can you serve in a nice place in a cheaper location?
With the move, you may need to coach your parents into a lifestyle that doesn't require the luxuries of the city. As you are finding, everything comes at a price and to get ahead and for you and your girl to build a life together, you may need to give a bit of that luxury up today to set your family up for tomorrow. Can your family still commute into the city on the weekend to see native-tongue friends? Can you teach them how to Skype, email, text, Google Duo, or Apple Facetime? Or maybe they just pick up the phone and give people a call.
Houston, TX · Member since 2017 · 33 posts · 16 votes
8y
@Faysal Alam Hey bro I think someone else mentioned this too... Read the "Richest man in Babylon" it's a relatively short book. There are several things that will determine your future wealth. Your ability to earn and how much of it you pay yourself (aka save) seems like you've done a decent job saving... keep it up! but you need more income bro that's even low for Houston to start investing (not that it can't be done). Also make sure you and your GF are 100% on the same page if you're counting on her income. I don't know how you can bring your income up that would be the first step IMO. Then if your goal is to live on 100% passive income then start buying rental and focus on MFs (some are making a killing with SFHs but I think MFs are better for rental). As long as you stick to it, it will work maybe not in the new 2-3 yrs but it WILL work it all depends on you and you only!!
Rental Property Investor · Atlanta, GA · Member since 2017 · 221 posts · 188 votes
8y
Hi @Faysal Alam, you are in a great position in life. You have a 10 yr head start. I will trade that with you anyday LOL....so use it wisely.
Here's my 2 cents:
Educate yourself, if you haven't already and keep doing so. BP podcasts, Flipnerd podcast etc.
Invest in good books as recommended here already. I would add that you read The Game of Real Estate Investing
Understand that RE is not all about flipping or wholesaling, but start today with wholesaling as a way to build capital and experience. DO NOT USE YOUR MONEY OR CREDIT....YET OR EVEN EVER!
DO NOT USE your 15k saved up. DONT!!! As of now!
Do not get any house in your name or mortgage. DONT As of now!
Understand that in this business, you have to learn and be GREAT at marketing and networking so get on that. Focus on learning how to generate leads. Be a lead broker for other investors. BE THE MAN! Its not easy but its easy :)
This will allow you to give the leads to other experienced investors (for a small fee or even free) and in return (hopefully) they can work with you, mentor you and partner with you and refer back to you.
EDUCATE YOURSELF
Start offering to help others...on projects, in lead generations...like bird dogs etc
>> Then start with wholesaling and BE HONEST with buyers and sellers. Build capital and experience <<
KEEP LEARNING
Join a group, REIA, Mastermind groups, Meetup etc
Then graduate from wholesaling and learn other RE investing strategies Like:
Buy and hold, Lease option, seller finance, assignment, options etc
Create a system and master it before getting others involved.
My biggest point is: Learn the art of marketing (online & offline) and networking. I dont care who you are...if you want to be a "Big Dog" then...you NEED to master these. Walk it, Talk it!!!
Create professional business card today!
Good luck. If you have any questions...holla at me!
@Faysal Alam I understand that moving isn't an option, but you don't have to move to a new location to invest there. No doubt it will be challenging but if learn as much as you can about other areas, you can invest there if the returns are worth it. Get one done and that deal will fund the next one. It gets easier the more you do it.
New York, NY · Member since 2017 · 41 posts · 18 votes
8y
Take another $5,000 of your savings and put it in crypto right now. Markets are down and present a prime buying opportunity. In a year or two, you will be pleasantly surprised. Anyone who tells you to take your money out of crypto right now, clearly doesn't have any money in the crypto market. We are young and need to be risk takers. $20k a year in NYC will barely buy you food let alone a cash flowing apartment.
Meriden, CT · Member since 2018 · 21 posts · 5 votes
8y
So much valuable information in this thread @Faysal Alam! I wish I had something to contribute to you like everyone else has but like you, I am new and in the same position. Good luck to you on your REI journey and I hope everything can move in the direction you want it to.
Cleveland, OH · Member since 2018 · 133 posts · 59 votes
8y
Faysal Alam congratulations at getting started with investing at so young of an age and having saved $15k on a $20k salary. That is the exact age I started.
Are you considering investing in New York? I do not know the market there as well as others but I know it is very expensive. Study and consider other markets as you make your decision.
It doesn’t mean you have to live there but taking a trip to markets of consideration should be part of the investment process.
I do not know what you do for work yet, have you considered an occupation that would net you more income? More income gives you more leverage in lending and investing expenses (ie; inspections, appraisals, earnest money, travel, etc)
I would not advise you use your entire savings. It seems that you are very thrifty so I don’t imagine you have an issue saving. More income would mean more savings.
Do you know which specific property types you want to invest in? An income goal?
Also try and work under an experienced investor and learn all that you can. Experience is the best teacher.
Know that there are those who have started with absolutely nothing but desire and became extremely successful in real estate.
I wish you lots of luck and success on your journey.
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Chris Coccaro I just don’t want to take away that convenience from them, right now , everything is within walking distance . My parents are pretty self sustaining , they do their own shopping, grocceries ynless it’s the heavy stuff , cleaning , cooking , I don’t wanna start being responsible of groceries, doctors appointments full time . Also most family we have is around the area . Within 30 mins , I don’t wanna take that away from them .
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Chuks Erinne I try my best to learn something new everyday , thanks I’ll definitely be working hard to educate myself and reach out to other investors .
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Jamal Jenkins do you suggest I start looking for properties within a 2 hour driving radius or should i just look somewhere in the Midwest as others have suggested ?
Real Estate Agent · New York City, NY · Member since 2017 · 150 posts · 26 votes
8y
Alex Price it’s actually 40k income 20k salary and 20k tips . In NYC I️ want to house hack to eliminate my rent , I want to invest in multi family rentals and build income of 6k/monthly