Buying First Property

7 Replies

Hello, this is my first post so thank you in advance to anyone who shares their 2 cents. I am looking to buy my first house in 2021. I live in NYC and trying to figure out whether I should buy a fixer upper house upstate NY and rent it out afterwards or should I invest in out of state buy and hold properties? Currently looking at New Hampshire, Rhode Island, Georgia, and Texas.

Thank you again!

It's always easiest to start in your local market. Lots of people invest out of state, but most have some decent experience. Get a few deals under your belt upstate before venturing elsewhere, just my two cents. 

Originally posted by @Adam Tafel :

It's always easiest to start in your local market. Lots of people invest out of state, but most have some decent experience. Get a few deals under your belt upstate before venturing elsewhere, just my two cents. 

Thank you. I'll definitely keep looking upstate 

 

I certainty agree with Adam's advice. As a first-time investor, it's always best to start close to home. That being said, I wouldn't limit yourself to just Upstate New York. I would also consider looking at properties in parts of New Jersey and Connecticut -- pretty much anywhere within an hour's drive of you.

So its my opinion that you should invest where the numbers make sense for you. I live in New Jersey and the first house I bought was in North Carolina because it made sense for me. Since you are planning on giving yourself a few month before pulling the trigger I would ask yourself a few questions.

1. What strategy do you want to use? Good resource book "how to invest in real estate" by Brandon Turner and Joshua Dorkin pod cast "Bigger Pockets real estate"

2. Whats the highest price range you could go up to and still qualify for a low interest loan? Using your personal income and rental income.

3. Do you want to do a rehab on the property? If so how much of a rehab are you willing to take on. Also what type of loan would you need for the rehab and what could you afford each month in holding costs.

4. How do I analyze a deal? this is extremely important and will also help you identify areas that don't align with your investing strategy. This also takes time to master. A good tool is "BP calculators" and just talking with people in a market your interested in.

After you answer those questions it will help you identify where you personally wouldn't want to invest. The reason being you would either not qualify for good financing or you would feel uncomfortable with the monthly holding costs/reserves need for the property. Once you know where you don't want to invest I would focus on building a team and identifying a market you like. For building a team a good source is book"long distance real estate investing' by David Green. That book is worth its weight in gold when it comes to identifying talented people to help support your investing business. As for identifying a market there are a lot of questions to ask but here are a couple important ones I would do in order to identify a target area.

1. What is the local landlord tenant laws. Not a big deal until it is a big deal then it definitely helps to invest in a state that favors the landlord.

2. Who are the major employers in the area. Typically the more diverse the local economy is the stronger it is. This puts you in a better position to make more money in the long run.

3. What is the average income, rent and home value of the area. Good way to figure out the price range you would want to be in for the area.

4. What is the renter to home owner ratio for the neighborhood. For single family homes I like at least a 70% home owner to 30% renter ratio. This typically means people take more ownership of there neighborhood and puts you in a better position for long term gains in increased property value. at least thats how I view it in my head.

5. What is the most desirable criteria for the area. For example this is my criteria for one of my areas. 3bed, 2bath, +1,100 SQFT ,0.50 acre, fenced in back yard, at least a one car garage and in a subdivision. If the house has all or most of these things it will sell or rent fast for top dollar.

Bonus I like mixed neighborhoods! This means there is a sizable discrepancy between the price of a retail house and a foreclosure or house that needs work. Also there is a reasonable amount of turnover in the area.

I hope this helps you out.

Originally posted by @Spencer Grassie :

I certainty agree with Adam's advice. As a first-time investor, it's always best to start close to home. That being said, I wouldn't limit yourself to just Upstate New York. I would also consider looking at properties in parts of New Jersey and Connecticut -- pretty much anywhere within an hour's drive of you.

I definitely overlooked Connecticut. Thanks for pointing that out!

 

Originally posted by @Anthony Barrueco :
Originally posted by @Spencer Grassie:

I certainty agree with Adam's advice. As a first-time investor, it's always best to start close to home. That being said, I wouldn't limit yourself to just Upstate New York. I would also consider looking at properties in parts of New Jersey and Connecticut -- pretty much anywhere within an hour's drive of you.

I definitely overlooked Connecticut. Thanks for pointing that out!

 

Definitely look into Connecticut. I think we are the last state in the tri-state area that is still seeing properties above the 1% rule readily available on the MLS. Most are averaging 1.2-1.3% currently. There may not be as many home run deals as there were 10 years ago, but it's definitely an option if you are trying to stay semi local to NY. The majority of our out of state investors are definitely coming from NY - Queens, Brooklyn and some from Long Island so folks certainly see the value in CT, especially after the recent tenant friendly legislation that NY passed!


Best of luck and don't hesitate to reach out if you'd like more info about CT, whenever you're ready! 

 

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