Need some advice! - NOVA Market specific

11 Replies

Hey everyone!

I'm trying to get some insight on what I should do with my next real estate move

Current situation:
I just bought my perm residence a few months back, I put 15% downpayment, will have 20% by next year.

I am looking to see how I can get a new rental property.

Choices:
1 - Refiannce on the new property and use money to make a downpayment on a new property
2 - Save up 20% for a new property
3 - Try to quliafy for FHA loan

I am wondering mainly in NOVA because our market is tapped out, is it even a good time to buy right now when everyone is saying the bubble will burst? With the market prices so high, making any money off of rent to pay for the mortgage is either break even or make $100 or so, so is that even worth the risk?

I see a lot of people use the BRRR strategy but I just don't know if it really works in our area.

I was thinking of looking outside of the NOVA market and maybe go though MD etc but I don' t know the area as well and do not have partners etc in those popular areas of interest like Bmore.

Any advice would be much appreciated!

Jimmy

@Jimmy Nguyen why not start interviewing some realtors in the areas that  you are interested in? PG county is hot & not as far for you to travel. (Baltimore city is very tricky if you are absolutely unfamiliar with it. You have to know the streets, & the blocks on the streets, to make sure you find something that you want to own for a rental.)

Make sure that they actually work with investors. You can do that by asking them about their own , to see if they invest themselves. If not, then it MIGHT NOT be a good fit if you are trying to invest in an area that you are unfamiliar with. I can give you at least 1 referral. I could find you a rental property, but I only work with buyers that have cash or private funds. I can help with that if interested.

Start with interviewing several RE agents though.

Thanks James for the input! I talked with a few already and they don't really work w/ investors that much. I'll have to expand my search a bit. I'll reach out to you also in the near future to see what opportunities you have!

Thanks,

Jimmy

Originally posted by @Jimmy Nguyen :

Thanks James for the input! I talked with a few already and they don't really work w/ investors that much. I'll have to expand my search a bit. I'll reach out to you also in the near future to see what opportunities you have!

Thanks,

Jimmy

Real Estate agents are easy to find, but those that know investing well are surprisingly rare.  Could the agents you talked to provide you a referral to an agent who does investing and represents more investors?  Also asking for recommendations from investors is another good way to find a good agent.

@Jesse T. Hey Jesse, funny you mention this. So I saw a post my realator friend posted up yesterday about an investment property his colleague had (this colleague does more investment properties). The property was nice from post I saw they gave me and they specifically stated a "great investment property in Manassas." I know Manassas decently well since my first income property is there.  I reached out to the the realator who had the listing and the property was basically market price so basically..what deal??? I'm starting to notice this with a lot of realators. They seem to just think that a affordable house in an high rental neighborhood is a good investment property. I know it's because the market prices have gone up but for us investors, it's def not even close. 

hey @Jimmy Nguyen

There are sooo many realtors here in NoVA. Most of them will be useless to you as most listings are at retail prices. Join a REI group to find some good deals being wholesaled.

I frequently attend ones in Falls Church. There is a pretty big community here.

@John Ma I'm going to try to attend Capital REI in Fairfax, is that the same one you are talking about?

@Jimmy Nguyen I am a local Realtor and an investor myself. One thing to keep in mind though when talking to a Realtor about seeking an investment is knowing what you are seeking in an investment property.  I own a number of different properties and they work as investments in different ways.  I have properties that meet the 1% rule and are good cash flow plays. But I also own properties that come nowhere close to the 1% rule, and dont cash flow at all. That does not necessarily make them bad investments, it is just a matter of how I am getting my return. With those types of properties I am often looking for appreciation as well as principal paydown. Many Realtors who do not invest themselves are looking more at the appreciation and debt paydown, and dont fully understand the cash flow side of things.  

I agree with @James Green that PG county offers some very good opportunities when compared to the DC metro area at large. Flippers in particular are doing well in PG county as there is a large spread between nonrehabbed and rehabbed homes..particularly in areas like Hattsville, Laurel, Riverdale, Bowie, Lanham. Laurel also offers some very attractive cheaper cash flow plays. Frederick, Germantown, Gaithersburg are also going to offer some nice cash flow oppurtunities in the condo market.

NoVa isnt nessecarily a bad area to invest...but the play is mostly going to be appreciation and debt paydown, which is going to be the case in NW DC, and really much of NE DC these days.  SE on the south/east side of Anacostia river will offer some cash flow.

Although back to one of your original questions....keep in mind with only 15% equity you will not be able to do a cash out refinance. You also can not use an FHA loan for an investment property. Your best bet is to save the money for a down payment. Also keep in mind a lender is going to want to see reserve funds in the amount of 2 months for your primary residence and 6 months for the investment property. (Possibly more depending on FICO scores). You could also look at some of the few owner financing deals that hit the market. They are not that common in the DC area but they do come up occasionally.

Medium logo lf re cire box white bboxRussell Brazil, Associate Broker w/ Long & Foster | [email protected] | (301) 893‑4635 | http://www.RussellBrazil.com | MD Agent # 648402, DC Agent # SP98375353, VA Agent # 0225219736, MA Agent # 9052346 | Podcast Guest on Show #192

@Jimmy Nguyen ive never been to that one.

Caza has a big network.  The great thing about being a part of a big network is you will have all sorts of investors in the community that will be of use to you.  You will meet hard money lenders, wholesalers, and contractors.   

More importantly are the seasoned investors that you can meet.  There are plenty of full time investors that can show you how to generate leads for motivated sellers that will make seller financing, subject-to and lease option deals possible. 

Thanks @Russell Brazil for the input. I def agree about appreciation and debt paydown method, I am def more about the buy and hold in this area.

Thanks @John Ma I'll look into Caza!

@Jimmy Nguyen have you seen any areas that might offer rental opportunity? I'm in Alexandria, interested in the same thing. 

@Russell Brazil  What are your thoughts on the casino being built do you think the area is already bought out or do you think there might be an opportunity with all those employees to find rental units when it comes online? It is located on the river as you mentioned before

Originally posted by @Ben Baci :

@Jimmy Nguyen have you seen any areas that might offer rental opportunity? I'm in Alexandria, interested in the same thing. 

@Russell Brazil What are your thoughts on the casino being built do you think the area is already bought out or do you think there might be an opportunity with all those employees to find rental units when it comes online? It is located on the river as you mentioned before

I do not think the casino will have that much of an affect. That area has already experienced quite a bit of growth. The amount of employees who will be working there will be a negligible amount. Ft Washington is ok on the owner occupied side of things....but I dont know if I would invest there. I dont think it offers that great of cash flow now that SFH's are pushing $300k, and I think there are better appreciation plays in the area.

Medium logo lf re cire box white bboxRussell Brazil, Associate Broker w/ Long & Foster | [email protected] | (301) 893‑4635 | http://www.RussellBrazil.com | MD Agent # 648402, DC Agent # SP98375353, VA Agent # 0225219736, MA Agent # 9052346 | Podcast Guest on Show #192