Two College Seniors Navigating First Investment
Hi Everyone!
Before we introduce ourselves, we’d like to thank the BiggerPockets community. You all have been invaluable resources for us as we’ve begun the process of investing in our first property and we hope to connect with some of you as we embark on this exciting journey.
Our names are Reed and Collin and we are seniors at Bowdoin College. We initially had the idea to purchase a four or five bedroom house near campus (Brunswick, Maine) that we could rent to students. This struck us as a prudent first investment because we knew the area well, had a vast network of future tenants, and the model had proven to be highly profitable for landlords in the area -- including our own. However, as we began the process of sourcing potential properties and organizing financing, we ran into two major roadblocks, the likes of which are common across many geographies in today’s market: 1) bargains were scarce and 2) properties were selling fast. Recent listings are above market averages and only stay on the market for a few days, if that. For example, a friend of ours in the area who purchased a home pre-covid has already received multiple offers for his house, all $50,000 more than what he bought for just months earlier. This has us worried that we will likely overpay if we choose to invest in a single-family home in the market we have been targeting.
Where we stand now
Due to these obstacles, Collin and I have pivoted to two alternates: 1) buy a multifamily property in Brunswick, ME, or 2) house hack in New York City, where we are both starting full-time jobs in finance in July. From what we have learned so far, multi-family homes don’t appreciate as quickly as single-family homes. This leads us to assume that multi-families in Brunswick are less likely to be selling at the premiums we are seeing in single-families. As for New York, we will both be moving there in July to begin full-time jobs. Property values there have fallen dramatically, as opposed to most markets, where prices are skyrocketing. Furthermore, in purchasing an owner-occupied property, we would likely only put around 5% down as opposed to the 20%+ needed for an investment property. Our goal would be to live in the property for a few years and then rent it out. We believe this could give us an early leg-up in the real estate investing game while capitalizing on relatively favorable market conditions in NYC.
We would greatly appreciate any advice from, or opportunities to connect with, members of the BiggerPockets community who jumped into the real estate investing game in college, or shortly thereafter. Do you think it makes sense to purchase an owner-occupied property immediately upon graduation, or should we go the traditional route and rent for the first couple years of our careers? We greatly appreciate all of your time and would welcome the opportunity to connect with any members of the BiggerPockets community.
Thank you,
Reed and Collin