All Forum Posts by: Nicholas L.

@Brian O'Neill this is a very personal decision, and I wish you luck!  Here are a couple of questions and thoughts:

-Do you know the Wilmington market well enough, or can you go there in person enough times in the next few months, so that if you pick any of your option 4 scenarios, you could be confident that you were buying a solid rental?  I think this is key... if you can't buy a solid rental, there is no reason to pick option 4.  Do you have a realtor and team in Wilmington already?

-I can't tell whether you need the cash from the potential rental to pay the balance on your primary.  I think you're saying you could take out a mortgage on the primary.  I wouldn't do anything on the potential rental that could impact your primary.

-The only reason to buy the potential rental in cash would be if you thought you could fix it up and boost the value - you could then refinance out based on the ARV. Otherwise, as long as buying with a mortgage isn't going to affect your DTI / other plans, this is better because it doesn't tie up all of your cash.

Hope this helps.  Also, FWIW, I don't think you "lose" money on options 1-3.  Buying involves "losing" money too... fees to the lender, closing costs, appraisals, interest on mortgages, etc. that don't contribute to equity.  Short term renting is a fabulous deal - no closing or financing costs!

@Mary Ciccarelli are you looking to occupy / house hack, or just for a straight up investment property?

@Nicholas Prestia

I have a few basic questions for you

Where are you located?

Do you have any savings?

Have you talked to a lender yet?

Are you renting now?

@Joe Gogal looks like a good plan to me.  Even though WMATA is having problems I'd still buy at or near a metro station.  Will open up commuting possibilities for roommates.

@Thomas O'Donnell this is a very personal question, and so I am not going to tell you what to do.  I'll just say this... real estate isn't going anywhere.  So if you rent for a year or two... you'll be in a much stronger financial position, and you'll be much more familiar with the market.  Renting is a fantastic deal in the short term.  No closing costs, no interest!  When your lease is up... you move out and on to the next thing.  And it might take you 60 or 90 days or even longer to find your house hack.  Good luck!

@Kristina Xie 

I like finding a market within 2-3 hours of NYC that will cash flow - somewhere in PA, NY, or NJ.  Of course you can invest in Ohio or anywhere else in the US... it's just harder to touch, see and feel the RE there, and much easier to get a team set up / get started by driving somewhere on the weekends, meeting agents, touring properties, networking, etc.

Also... buying properties directly and investing in syndications are very different.  Like others in this thread have said, it depends on what you want.

@Jason Nham are you looking to owner occupy?  Finding something vacant, moving into one unit, and getting to do your own screening on potential tenants is much lower risk than finding something occupied and inheriting tenants.

And... if you're looking at a property that's listed on the MLS, it may be tough to get good answers, because the seller is likely going to have lots of interest. They may give you partial answers or even ignore your questions!

Are you working with a lender and an agent?

As was said in the other post, if you're not inheriting tenants and it's vacant, it's lower risk.  You want copies of leases, confirmation of whether payment is up to date, whether utilities are truly and totally split, who pays utilities and whether utility payments are up to date, whether there are lawn / maintenance / groundskeeping expenses.

@Venkateswaran Venkatasubramanian 

Can you pick a market that is within 2-3 hours of you instead of one across the country?  

Can you house hack?  

Would you be able to make multiple trips to CT to get a team set up?  

Do you have cash for reserves?

I always get nervous when first time investors pick random high cash flow markets.  I do think you can be successful anywhere but you need a really strong team in place...

@Ashley Lovelace how long do you have until closing?  Do you have a financing contingency?  Can you ask the seller for an extension so that you can call other banks / lenders and explore other options / products?

@Mike Schorah The interest rate on any DSCR loan is likely going to be much higher than what you're paying now, but I think you could refinance your FHA loan into a DSCR loan. This would also eliminate the PMI.