Updated almost 6 years ago on . Most recent reply
The right market for newbie living in New York
Hey guys I’m very new to bigger pockets and I love the content that the site and it’s forum users bring to the table. Lots of knowledge here for everyone so thank you guys for that. So I’m looking to get started in real estate with the objective of gaining passive income. I do not want to quit my job as crazy as it sounds because I love what I do. However I want to build as much wealth as possible to increase quality and comfortability of life. I live on Long Island in New York. As many probably know the market here and in pretty much all surrounding areas within the state are crazy expensive and not Conducive to investing for the guy who has a very small amount of start up cash. So my question is what market(area) do New York or even more specifically, Long Island investors work in? I’ve tried looking in parts of Delaware and New Jersey. As well as some of the closer areas in Pennsylvania. I’ve looked in to brrrr strategies as well as buy and hold rental and even short term vacation rental, more specifically in ocean city Maryland. I need to find an area where I can get started with a $25-30k investment. I will have at least one partner to start so altogether the start up money would be around $50-60k. Thank you guys for all advice.
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#4 All Forums Contributor
- Real Estate Broker
- Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
Steve tons of investors on this site are in a similar position as yourself. Many of them turn to the turnkey markets. Note that you do not necessarily need to work with a turnkey provider but there are tons of turnkey markets out there. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors
- Cleveland, Ohio
- Dayton, Ohio
- Toledo, Ohio
- Youngstown, Ohio
- Cincinnati, Ohio
- Memphis, Tennessee
- Birmingham, Alabama
- Kansas City, Missouri
- Saint Louis, Missouri
- Indianapolis, Indiana
- Detroit, Michigan
- Erie, Pennsylvania
- Louisville, Kentucky
- Milwaukee, Wisconsin
- Jackson, Mississippi
Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.
One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.
- Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
- Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
- Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
- Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
- Make sure your property manager is a licensed real estate brokerage.
- Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.