I’m preparing to get into rehabbing properties and just wanted to see if there’s any advice for a new investors. Like is there a loan that’s good for new investors or is it better to start with rentals rather than fixing and flipping? I live in New York and I’m hoping to invest in surrounding areas such as westcHester county or CT.
Both flipping and rentals are good models for starting out. I would recommend looking at the markets you want to invest in and try to estimate what return each model would make. Try to analyse a bunch of properties and reach out to investors in those areas Then see which model best serves your personal goals. If you don't have clear goals now is also a perfect time to make them. You can typically also get free consultations for what types of loans you may qualify for over the phone. Hope that helps!
Thanks, I appreciate the advice. I’ll start with looking into the markets like you suggested.
@Patrick De Los Santos In my opinion, if you're interested in renovations, then there's no better way to learn than to be on a job site every day. If I were you, I would focus on finding flippers in your area and figuring out how to add value to them. A great first deal would be a partnership with somebody who is experienced so that you can learn and mitigate your risk.
Hope this helps and happy holidays!
Yea this would be great, I haven’t been able to find any investors in my area. I’m looking on here to see if I find somebody. Appreciate the advice
It's getting tougher and tougher to find good flips in this market @Patrick De Los Santos . Flips can be great - but it's a job. You have to find the next deal, do the work, sell it, and repeat. Rentals are way more passive and certainly my cup of tea. I am based in Connecticut - what sub markets / areas are you looking at? I can probably give you some pointers if you'd like.
I’m all for rentals I really just want to learn as much as I can and get started. I’m willing to invest in markets further away even if it’s an hour away, it’s really more based on if the deal is worth it. I would appreciate any pointers you can give me.
Why not do a house hack in NYC itself since you live here! 3.5% down via FHA lets you buy a whole lot of marquis NYC realty.
Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. The kicker here is that rates are much lower than the 7% that OP noted. Today nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.
Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.
If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!
Lastly, as your primary residence, a lot of equity appreciation will be TAX FREE ($250k exemption if single, $500k exemption if married) which is major.
I think its best to take the path that works best for your specific situation and goals. A flip might require you to be at the property more especially if you are planning on performing some of the work. A rental might require less of your time being that you will just be managing. Definitely look into markets you want to focus in on and go from there. Have you thought about getting a rental property that needs work where you live in it and fix it up over time? (Live and Flip) Could be a great way for you to add value, create a cash flowing property, and save on your living expenses. Feel free to message me with any questions you may have!
Where would you start to find local investors in your area? I am brand new to the real estate investing realm and don’t even know where to start. In regards to analyzing a property, is this merely a “run the numbers” analysis or are you looking at neighborhood growth, school ratings, crime, etc.?