Get Started in Real Estate - Condo or Wait?

Question

Hi BP Family,

I want to be as transparent as possible and ask you guys a question. My dream is to buy a multifamily property but, in NY/NJ it's very expensive. However, I am contemplating purchasing a condo until I could increase my savings to try again later.

In other words, should I purchase a condo in the meantime (since I renting now) or hold off so I could use an FHA loan for an investment property?

I roughly have $50K in liquid assets and not sure if I have enough to stay afloat if any mishaps happen. I figured a condo might be the best way to build equity while saving at the same time.

Abel Curiel · Answer

Hey @Michael Peralta,

I don't recommend getting a condo to increase savings for a multi-family in NY. Depending on what your rent is now, you'll likely be spending more for a condo than you would on renting an apartment. Especially when you factor in down payment, closing costs, monthly mortgage payments and monthly common charges. Also, not all condos in NY will allow a down payment of less than 10%.

Full disclosure: I am not sure how all of this will play out in NJ when it comes to looking for condos.

That being said, I think it takes sense to explore multifamily options in NY or NJ when taking  your dream/goal into consideration.

House-hacking a multi-family property will allow you to get in with as little as 3.5% down, gain acquisition/ experience AND get you started as a RE investor.

Moving into a condo unit, in my opinion, will be moving you in the opposite direction of what you're ultimately looking to accomplish.

Best of luck to you on your decision!

Abel