Hello, everyone. I am a brand new prospective real estate investor (when I mean brand new, I mean I decided to start investing in real estate yesterday). I have been reading some of your posts and I must say there are a lot of knowledgeable people here (unlike most internet posts). I have learned a great deal already. However, the reason I am starting this post is to ask a little more specific question related to my situation.

I live in the NYC metro area, and as everyone knows, Amazon announced opening headquarters in Queens NY area as well as Arlington County VA area. Now basically I am trying to invest in real estate where house prices are unlikely to go down yet still demands a high rental price. However, in the Long Island City area of Queens, 2 and 3 family houses have a purchase price of around $1.3 million and up. The rental income is about $5,200 for 2 family & $6,800 for 3 family.

Basic question is assuming I am able to purchase for $1.3 million (mortgage plus savings), is it a good idea to buy this property and rent it out (where rental income over purchase price ratio is very low) or is it better to look for cheaper property further away from NYC where rental income over purchase price is higher? The property is expensive in that area because of proximity to NYC as well as proximity to Amazon in the very near future. Everyone knows about it, but not many people will be able to jump in and buy something for over a million dollars.

Also I read somewhere in this blog community about receiving 1% fee from a bank for providing "guarantee of funds" services on a million dollars and if that is done 10 times per year, you can earn 10% on that million. Is this legit, or another get rich quick gimmick? Thanks everyone in advance for any advice that you can give. 

Welcome to BP!

This all really depends on your investing goals and what you're comfortable with. If cash flow from rentals is very important to you, or you need cash flow, then you would need to look well outside the NYC area to find positive cash flow with financing. The hurdles to this approach are sourcing deals from a distance and outsourcing property management, etc. Keep in mind, high cash flow areas tend to have much slower or in some cases no appreciation. On the other hand much of NYC is an appreciation play. There are those here (probably the majority) that say you can't count on appreciation alone but there are tons and tons of folks who have bought in NYC with low or even negative cash flow that have done really well for themselves.

I have clients that will only look at deals with certain minimum cash flow, others who are ok with low cash flow, and some that don't care about cash flow at all. Since it's only been a day I'd spend some more time on these forums/podcasts educating yourself on the different options to see what strategies you're comfortable with and which ones fit with your goals.

@Sun Kim

I am also from NYC and I faced a similar predicament when I started my real estate investing career.
I decided to invest out of state where my money can go longer.

Queens has gone through a huge run-up since the last recession. Amazon coming in only made the prices go up more

If you buy that 1.3million dollar house; chances are that you will be cash-flow negative but banking in the appreciation to make up for it.

You may want to come out to a real estate investing networking event in NYC and see what everyone is doing.

@Sun Kim

Welcome to Bigger Pockets. You have come to the right place to learn and to connect with others.