Flipping vs Brrr in Long Island NY
hello everyone,
I live in Long Island ny. I have flipped 2 houses here. Obviously being a very expensive market, it is also highly competitive and deals go real quick. Basically everything had been bid high up because there are a lot of investors putting in crazy high bids in on properties that barley have a spread because there are very few deals.
So I am looking for a different approach. First does anyone know of any better markets within an hour or so of that area. I am willing to expand my investment radius to find better deals.
So rather sitting on the money I have for capital which is 130k, I am looking for a better strategy as I am looking to grow that capital as quick as possible. Would a brrr strategy work? The part I am confused on is how much money are you able to get out of the properties and how long do you have to hold it before being able to refi with cash out?
I've always thought I couldn't start getting rentals until I had enough capital to tie up. But if with the brrr strategy I can get that capital back then that would be a different story. The only thing I wonder is would i even be able to find properties like that here that would generate positive cash flow.. For example you could probably find a really crappy 1 family for around 275k maybe a 3 bedroom but your going to need over 60k depending on the house to fix it up. My first house I did was purchased for $260k ended up costing me 90k in Reno because my contractor screwed me at the finishing work and stopped showing up so had to go out of pocket for some final costs. I sold it for $435k so yes my first flip we did make a profit. But the most you could rent a house out like that around here for is $2,300 or 2,500 a month. The main issue I see is I'm buying these houses with hard money and using my money for all of the other costs so how could you then hold this property and rent it out by getting the hard money lender out of the equation
If I look for multi family's, now your talking upwards of 500k whether it's long or queens which happens to have most of them.. Just to give you an idea, I just lost out on a multi family in queens for 589k but the whole inside needed to be gutted. I'm talking 3 floors. Other rehabs selling in the area we're going for about 830k. But by the time you figure in the 100-150k to fix it up and all the closing and holding cost it only works out to be about 50k profit. Split between partners to me that's a tiny margin for the substantial risk you are taking. And that's with all the estimates staying constant.
Not really sure on the best course. Any direction would be greatly appreciated!
Thanks