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Updated about 17 hours ago on . Most recent reply
One step forward... two steps back. Time to switch it up!
Good afternoon BP community!
Once again I am turning to you for advice. Through the dialogue from these forum posts, I've been able to connect and talk with professionals who've pushed me forward along my journey to getting buying my first property. They have been very informative and patient with me and I am grateful for that. I've recently obtained a pre-approval from a local lender. I'm qualified for half a million dollars! That sounds great on paper... but I know that there's nothing reasonable for that price in the NYC market. What little is out there for such a sale is currently in a more experienced RE investors sights. These fears have been acknowledge by both the broker and loan officer I've been consulting with. Harsh reality, as I was really hoping to house hack this first property. I could wait for a more better suited market to arise but I'm not inclined to do so. My life along with the life I am trying to build for my partner (our aspiring family) cannot wait on me and my ambitions.
With that being said, I've decided to change my strategy from finding a house hacking property to finding a long distance rental while also finding an apartment to rent for my partner and I. Not sure how I should go about doing this since these are two goals I am setting. Long distance rentals have come up in my self-taught education but I would appreciate feedback. Through podcast I've head good things about Rochester, NY. Should I fully indulge in the "long distance" part and not be afraid to find cashflowing properties in states far away from me? I'd also appreciate any advice on finding an apartment that helps me, not hindering, continue saving while looking for a property to invest in.
If you would also like to tell me about another strategy I haven't thought about that might fit my goals, I'd love to hear about it!
Most Popular Reply
My view is non local RE investing has increased risks especially for a new RE investor.
In addition I am unconvinced you have looked at all options local. here are some thoughts that I suspect you have not exhausted:
- alternate financing: NACA, assumable (have your agent search for the word assumable), owner financed, lease option. Each of these would allow you to purchase higher value home with similar payment (if you can afford $500k at market interest, what can you afford at 3% assumed loan?
- alternate rent models: STR, MTR, rent by room can all produce better revenue at the cost of more effort than LTR. It likely will not help in your traditional loan qualification, but it can provide you increased revenue that can help reduce risk.
- I recommend newbies buy using a real estate agent due to the risks, but off market deals typically have better value adds. Buy a home at $200k less than ARV and spend no more than $100k on the rehab. The numbers would be too tight for a flip, but can work as a house hack. With sweat equity and the associated risks, you have a property worth $100k more than you could have afforded if you purchased a mls ready home.
My view is all of these options is lower risk than purchasing OOS residential and expecting a decent return. Note I am not stating it does not happen. What I am stating is the RE market is challenging now and a lot of OOS investors are not going to achieve returns that justify the work and effort.
Good luck