Hello BP Community!
I am very new to real estate investing (almost zero knowledge) and I would love to hear people's opinion on what has been on my mind.
I worked restlessly for 3 years from a not-well-paying job and was able to save small amount of money. I thought that, instead of letting it sit in my bank, it would be a great idea to invest in real estate and work toward financial freedom.
Currently, one option I am looking at is asking a friend, who is a builder, to build a multi-family house (3-4 units inside) in my home state (ME) where health care professionals, retirees, and college students are for rental. Another option is, since I am currently renting an apartment in NJ, buying a duplex or house then rent out a room or one section while I live with the tenant.
I would very appreciated if anyone could give an advice on which route would be great to take and what type of loan. Or even there is a better and smarter real estate investment idea.
Please feel free to ask me if there is any information I could provide which could help determining a good investment.
Credit score : around 750
Loan amount looking for : 300,000 - 350,000
Home state : might qualify for USDA loan
Thank you again for reading my post!
I like this thread so I'm giving my 1 cent.
I would invest in the Maine project and tailor it for the medical professionals. By this I mean the residents and fellows, if they are available. They make enough money to pay for a decent local place, they aren't bad tenants, and they move every few years so you can increase rents. You will do well with places near the hospital as they need to get to work quickly. Contact the residency or housing coordinator for them. They start every July on the first so you have time.
Maine will not appreciate as much as New Jersey but you get more bang for the buck, depending on location.
Old people are cool too but have a low threshold for odd smells of decay.
College students...make sure you get a large security deposit.
@James Canoy Thank you so much for your reply and advice!
I considered Maine because the rent can be $1,000 - 1,100 / month including heater and water. I have seen other people renting it to medical professional who are staying for residency or moved in the town for jobs and stay until they settle down with a house, or elderly people who are looking to retire in an apartment and don't care about maintaining a house. Basically, people who won't have any trouble paying the rent.
I live and invest in Maine; however, if you can find the right deal I would without question house hack where you are then leverage your Maine contacts for your second property. For me the only variable would be can you find the right value add play where you are in NJ
@Bernie Huckestein It is nice to see fellow Mainer here! Thank you for taking the time to reply my post and your advice. I am really glad that I asked my question here.
Since you mentioned about variables, it raises a few questions for me that "Am I able to find a nice 'house hackable' place in the area despite HIGH property tax, etc here" "How much loan do I need or would be able to borrow" "If I am able to get a house, would the value depreciate and would not be able to use it as collateral to get the second property in Maine?"
Since I do not know anything about real estate, all the thoughts make me nervous hahaha Now I think about it I wish college should have taught me some of these knowledge
Thank you again, Mr. Huckestein.
If you know basically nothing about real estate in my opinion your not ready to invest anywhere. I would suggest picking up a few books to give you a good basic understanding. Then if you can find someone locally that is doing what you want that would be willing to mentor you. Maybe you could offer your services to look at and investigate properties for him or her in exchange for teaching you what he is doing. There are a lot of things available on this site but the vast majority of the people have done very few deals, under 5. So you will need to weigh the advice. Don’t be afraid to invest a little time and money before you jump in.
Thank you very much for your advice. That is a great idea in order to learn about real estate. I feel that I am not ready yet. However, since that I have the opportunity to either house hack or invest in a multi-family house in my home state, I didn't want it to go by or wanted to be smart with money. I think I am eager to do something.
I'm not saying let it go buy but in a week or two if you really apply yourself to learning you will be much better off. You should know how to do a CMA. You should be able to do a basic title search. You should be able to determine what FMV rents are for the area. Some basic knowledge of property inspection so you can spot obvious issues. You should also be able to analyze the numbers to see what is missing and if they are real. You should know how to verify them. You should be comfortable with the offer process allowing yourself out clauses. All of these things are the basics and can be learned in a very short time through dedicated study. But again be confident in your sources of information. Hope this helps.
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