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Updated about 8 years ago on . Most recent reply

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233
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Megan Phillips
  • Rental Property Investor
  • Vermont
147
Votes |
233
Posts

How to start in expensive areas

Megan Phillips
  • Rental Property Investor
  • Vermont
Posted

Good afternoon!

I have been reading books/forums and have attended some local Investment info. groups near me, I know that investing in rental properties (owner occupied to start with an FHA loan most likely) is what I want to do (rather than spend the same amount on a house...) - I have also been perusing zillow, trulia, and a few others sites just keeping tabs on multi family units in Vermont.

Here's the thing. In Vermont, real estate is pretty expensive, along with taxes, plus there's winter, so heat and other costs come into play. When I try to analyze multi-family units, it's not uncommon for the monthly incomes to be near break-even or even negative in a lot of cases, or the properties are just TOO expensive. Minimum price in any "decent" area near where I work is 250k+, most are closer to 300k+. 

Do people in expensive real estate markets have advice, or is it simply suck it up, and save money until I can afford something in that price range?

Thanks!

Most Popular Reply

User Stats

334
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215
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Eric Delcol
  • Investor
  • Tampa, FL
215
Votes |
334
Posts
Eric Delcol
  • Investor
  • Tampa, FL
Replied

Megan Phillips

"Do people in expensive real estate markets have advice, or is it simply suck it up, and save money until I can afford something in that price range?"

Here are a few things you can do if your market has a high entry point:

Wholesale deals.

Fix n flip using short term hard money.

Invest in another market.

You can make money in any market. It all depends on your approach and strategy.

Trying to find cashflow in San Francisco is nearly impossible. So would trying to do 2 million dollar flips in downtown Detroit. But reverse those two strategies and now they work.

You may not even have to venture across the country to find what works for you. Using the above example 30 mins from Detroit proper you will find lavish homes that could be flipped. 2 hrs outside SF you'll find properties that will cashflow.

If your local market doesn't fit your model, find a market that works with what you're passionate about.

Take a look around your area and you may be surprised to find something you can afford. Good luck!

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