Where and how to best invest in DMV (D.C., Maryland, Virginia)?

5 Replies

Hello, new here!

I heard real estate was one of the best ways to generate passive income. Specifically, accumulating rental properties throughout life. My goal would be something $10k/mo passive income before I'm an old man, and I'm currently 25 yrs old.

So what I'm working with here is a $100k+ salary. I'm going to spend 2018 learning as much as I can about REI and saving for my first downpayment. From what I've read so far, it sounds like the cool stuff such as apartment complexes in Washington D.C. are completely out of my reach, haha.

What areas, unit types, and method of REI do you all suggest for someone like me? I've heard my home of Northern Virginia is not the best to cash flow rentals.

Feel free to shoot me a message if you want to help a newbie out! I've noticed I usually fail the 1st time I try something new, so any guidance and advice is sincerely appreciated. Thank you. :)

If you have patience, buy in areas with high rent growth like Rockville, DC, Silver Spring, Fairfax, Arlington. 

@Russell Brazil

Thank you for your input!

I certainly have patience, as time is on my side. I'm looking at 30-40 years from now when it's time for me to retire. I'm 25 now, and I hope $10k passive income by the time I'm 65 sounds reasonable.

Would you mind elaborating on your suggestion? I don't make a ton of money, so are you still saying I should be going for things like the $500k single family homes Rockville, D.C., Silver Spring, Fairfax, Arlington? Well I would assume D.C. and Arlington you're talking more about apartments because that seems to be what's hot there. I would imagine I can't afford much of what you're talking about?

@Andrew Leung

Andrew

Congratulations on your great start.  25 with a 100K job is fantastic.

If I were you, I would spend time getting a house using as much other people's money as possible. If you're a first time homebuyer, use FHA, VHDA or Fannie Mae's 97% loan to value program to get my personal home. If you can find units, buy with FHA and get the property with 3.5% down or go with Freddie Mac's 95% home possible program.

I'd live in that property for 12 months or more and then get another one, living in it so you get the best personal financing possible.

Once you've accumulated a few doors and because that will take a few years, you'll have time to accumulate some savings, then start with larger properties that are investor properties, possibly in other municipalities or states because around here, the cost is prohibitive.

By the time you're 35, you'll have about 15 properties and you'll be well on  your way to accomplishing your goal.  Don't let anyone or anything get you off task and you'll be fantastic.

Congratulations

Stephanie

Originally posted by @Andrew Leung :

@Russell Brazil

Thank you for your input!

I certainly have patience, as time is on my side. I'm looking at 30-40 years from now when it's time for me to retire. I'm 25 now, and I hope $10k passive income by the time I'm 65 sounds reasonable.

Would you mind elaborating on your suggestion? I don't make a ton of money, so are you still saying I should be going for things like the $500k single family homes Rockville, D.C., Silver Spring, Fairfax, Arlington? Well I would assume D.C. and Arlington you're talking more about apartments because that seems to be what's hot there. I would imagine I can't afford much of what you're talking about?

 I like $400-$500k single families in the suburbs mentioned or rownhouses in Brightwood or Riggs Park in DC.

@Andrew Leung FHA loan limits on a 4 unit are $1,223,475.00.  This allows the potential to buy a residential multi with 3.5% down in high cost areas with high rents.  If you can find a good one, move into a 2-4 unit small multi...live in it for the required time period and try and buy another one.  You can also go single family homes as others have mentioned, but you will be limited in passive income unless you are willing to have roommates.  

First thing I would do is talk to a lender and get pre-approved.  If you have good credit, high income and some savings you will most likely have no problem getting a cheap loan for a single family, townhome or small multi.  Some of the 4 units going for 600-800K in DC have high enough rental incomes to cover most of your mortgage.

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