NYC Newbie Seeking Wisdom on 1st Out-of-State Investment Property
Hello,
I’m Myles, age 30, living in Queens, NY, and working as a real estate agent here, focusing in rentals for the past 6 years.
I’m writing because my 2-5 year plan is to buy a multifam in another market. I can’t afford anything in the NY Metro Area at the moment, so I’m exploring areas in:
- my home state of Vermont (Southern VT mainly)
- Keene, NY
- Pittsburgh, PA where my brother lives
- Kingston, NY (Upstate NY area/Catskills)
- North Adams, MA (college town)
I’m trying to stick to areas I have some ties to since it will most likely be an out-of-state situation with a property manager.
My goal is to buy a 2-4 unit property that is in decent shape, rent the units, and have one unit for myself to come to when I want to get away from NYC.
I've been running numbers on both the rental property calculator and the BRRRR calculator with varying results. It seems that unless it's in rough condition and I make a very lowball, borderline-unrealistic offer, the numbers aren't gonna work.
I'm sort of torn because I have an amazing deal on my rent-stabilized one-bed here in Ridgewood, Queens. And I stay pretty busy here in the city, so I'm not sure I would be ready to do an FHA-loan house hack and relocate. Rather, I might have to bite the bullet and put the 20% down and get a property manager. Of course, I could also get private/hard money, but that sort of freaks me out - what if the property doesn't hit the target ARV and I can't pay off the lender / 70% isn't enough?
But part of me would like to get out of the city, cut my living expenses and maybe even live rent/mortgage-free! There's also the huge benefit of using an FHA loan, but I'm not sure I would be able to sublet my apartment here in the city to occupy the property for the first year.
Then, I think about the pros of having the tenants next door: they are next door. And the cons: they are next door.
So, I’ve also considered a single-fam, short-term vacation rental property in the Vermont ski areas, the Catskills, or some other yet-to-be-researched/discovered location.
Anyway, as you can see, I need to keep researching to find out where the best opportunity is for me. Fortunately, I have excellent credit, but I’ve been an independent contractor for the past 6 years, so I worry about qualifying for a mortgage. Once a house my brother and I co-own (inherited property in rough condition aka not getting rich off it) sells in Vermont, I will be debt-free and have some savings for a down payment. That *should* happen in 2018, fingers crossed.
If anyone has any comments/guidance/experience they can share with me, that would be awesome! I feel like I'm in my obsessive, Type A research spiral and need some guidance to focus/think outside the box.
Thank you,
Myles