All Forum Posts by: Ron Gallagher

I would still choose the Washington DC trend line over the Columbus one:

Plus, in DC our largest employer is the federal government. The government isn't going out of business or moving to another city anytime soon. Amazon is coming. 

DC is the place to be and if you are already here and you can make DC cash flow, then I don't know why anyone would invest out of state (or out of The District in this case).

I buy houses in Columbia Heights - Petworth area with as many bedrooms as possible (I'll turn a living room, a dining room with an egress window, basement rec room, a heated porch, etc. into bedrooms as well.) and rent by the room.  

Actually these were all move-in ready properties or properties that had all the tenants living in the house already, so no rehab needed. In fact, if a property has been recently rehabbed I probably don't want it because the first floor will be open concept and all the walls will be gone so there's no living room or dining room left to turn into a bedroom. 

I respectfully disagree, I don't feel like the competition in the DC market is overly "stiff." Over the last three years I have been able to pick up three B Class, 1% rule properties in DC, two of which were sitting on the MLS for months.

In regards to high prices in DC, isn't that the trend that you want?  That means the market is appreciating, versus a $75,000 house in Ohio that will still be $75,000 in 5 years. That's like not wanting to buy a stock because the price keeps going up and it keeps hitting new highs, and instead wanting to buy the stock that is cheap because the share price is low because the share price hasn't moved up for years.  I would rather buy a $1,000,000 property in DC that I know is going to appreciate than a 2% rule property in Ohio that will never be a $1,000,000 property. 

You have $500k, you can make it work here in DC.  With $500k you can buy 3 cash flowing DC rental properties in nice neighborhoods (no risky war zones or ghettos needed) and make about $8,000 a month in cash flow.  How do I know?  Because I did it.  Those last three DC properties that I mentioned above produce approximately $8,000 a month in cash flow. Cash to close on each of those three properties was about $150k to $200k, so with $500k you can definitely invest locally in DC and cash flow and get the benefits of appreciation which you aren't going to get by investing in Ohio.  

@Isaac Passmore buy a condo with a low fee in an easily rentable area of DC (Shaw, Logan Circle, etc.) and if you buy a one bedroom condo you can partition off a part of the living room and live there and rent out the bedroom, if you can afford a 2 bedroom condo then you can live in one bedroom and rent out the other, or live in the living room again and rent out both real bedrooms for even more cash flow. 

Starting off with a condo is a great way to dip your foot in the water and see what landlording and property ownership is all about.  Then after living there a year or two, hopefully with your reduced living expenses thanks to the house (condo) hack you will have been able to save up for a down payment on a DC rowhouse or duplex. Then you repeat the process about 4 or 5 times and then you retire.  With all the numbers being so big in DC you can achieve financial freedom with just a handful of properties, I am quitting my W-2 job next month because I have replaced my 6-figure W-2 income with rental income from just 5 properties. Oh and my first property was a condo in DC, and the strategy I employed to achieve financial freedom was the same as I outlined for you above.

@Russell Brazil is right, I do get paid (roughly $2000 a month) to live in a really nice house in a really nice neighborhood in DC so you could definitely do something similar in NYC.  

If you were going to go the NYC co-op route like @Jaysen Medhurst suggested, I would do what @Craig Curelop did and partition off the living room area and use that as my bedroom and then I would rent out the "real" bedrooms. 

Isn't this against the law?

Appreciation and cash flow are both possible in DC.  Listen to this week's BP podcast with Joe Asamoah as he breaks down one strategy to cash flow in DC, the other way to cash flow in DC is do what I do and buy a house with six bedrooms and rent it out by the room.  My last three DC rental properties have met the 1% rule and the cash flow and appreciation have been amazing and I didn't have to leave the area to achieve it!

I'll be there since I'm an aspiring REI rockstar!

@Russell Brazil I'll be there too!  

I really enjoy scanning dozens of documents for loan officers and getting tenant phone calls at 2am, and I wasn't getting enough of that in my life so I started investing in real estate.