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Hi everyone!

I'm a renter in NYC, with my partner and two dogs.  I have amassed a decent amount of savings which I have put in the stock market, but would like to consider putting between $100-150k into real estate, but I'm really not sure how and would love some guidance.  Some initial thoughts / questions:

1) I have done the STR/AirBnB game, and I know it's not for me (at least the way I did it). I bought and renovated an A-frame upstate for $400k, put in $150k, sold after a few years for $700k, but it wasn't worth the stress of making AirBnB guests happy, managing a renovation, all while having a very involved 9-5 job. If I knew a really good, dependable property manager that didn't take a hefty cut, I would be possibly interested again (companies like RedCottage in upstate NY take around 20%-25%).

2) My partner and I aren't ready to buy a house together yet, but if/when we get married in the next couple years we would want to.  If I have money sunk into a different real estate investment, does that prove to be a challenge in terms of having the capital for a downpayment on a primary residence?

3) I'm leaning towards buying a house/condo that I can do some minor updates to, and turn into an LTR.  Some questions with this route:

- If I have a 9-5, I can see it being a real headache when things go wrong and having to deal with it immediately - is it hard to find property managers, and should I?  Or should I get to know the tradesmen in the area, so I can call them up to handle problems?

- How do you narrow in on _where_ it should be?  I know NYC really well, but it's so expensive, so I get the feeling that $100-150k won't take me very far. I keep hearing that place doesn't matter so as long as you understand the real estate market there and can get someone you trust to manage it?

- Between studios, 1-br, and 2-br, is there a certain one that yields more "stable" tenants?  What are the pros/cons in your experience?

Any other advice would be greatly appreciated, especially on approaches that I might not have considered!

Frank Patalano · Answer

You could consider doing a passive investment into a syndication or a crowdfund for $50k or less.
The investment is rather illiquid so you may be stuck if you needed the money until you sell or refinance that is why I suggested a small amount.

I was working 7 days a week and still self managed 15 units at once. I had a list of people to call if I was not available. I had a preferred handyman, plumber, electrician, etc.

In short term rentals, I have heard 20% being common in some markets. Long Term rentals should be 7%-12% of gross rents.

Nick Jonas · Answer

thanks Mo! I'm watching your videos, they're great! I'll DM you with some follow-ups.

Dave Skow · Answer

@Nick Jonas- I  would recommend  getting a loan approval for whatever   hypothetical  scenario  you  would like to try  ...the pre approval  process is free / easy and can be done remotely ....if you end up not buying anythng - you dont  owe anyone anything - this process will also allow you to get  organized /  learn alot  about the  process and the present  rates / fees  and   also to  get prepared  to possibly make an offer ...good luck

Mohammed Rahman · Answer

Hey @Nick Jonas - I'm an investor and a realtor, I've also worked in the corporate and startup space long enough that most of my clients come from similar backgrounds as you. I have some videos on my YT page you might find useful (titled Can I Houshack in NYC? and NYC Airbnb Laws).

In terms of what you're trying to accomplish, I think it's doable. A lot easier than you think.

I also believe you're more ahead of the curve than you know. Having Airbnb experience under your belt will help you tremendously when investing somewhere closer, especially since you'll have an easier time to make connections with local handymen and technicians that you'd call on in case your units run into any issues.

1. It's not hard finding property managers. I advise against it since you already have the experience to make this project easy to manage (even with a 9-5. I started investing when working fulltime too, without a property manager). It won't be difficult to find tradesmen in the areas you need. My network is your network, let me know what you need.

2. $100-$150k will take you far enough to qualify for a decent condo & even multifamily (depending on which areas you're looking in). Typically I recommend first identifying what your budget and goals allow you to afford (get a preapproval) and work backwards from there.

3. In my experience, property types don't necessarily dictate the stability of tenants, more so the areas and the amount of prescreening you do... just like any other market. The area will attract the tenant, and you have to be smart about filtering through the bad apples.

Shoot me a DM or just call/text the number in my signature, I think it would be good if we talked. Thanks.

Lloyd Preece · Answer

NYC is tough to make work, but couple of things. “Anywhere in the US has cash flowing rental properties within 2 hour drive” is something Brandon used to say years ago on the pod. If you’re looking for a pure rental you need to go north or west. Out to CT you’ll find cashflow in the New Haven area and out to PA you’ll find cash flow in the Lehigh Valley. You can do 2-4 unit MF in either market with the capital you mentioned.

If you want to house hack and still be in a reasonable distance to commute to Manhattan look at Hudson county. I HH’d a 2 bed condo in Weehawken (10 min bus to city) and it saves me a lot of cash Vs renting in Manhattan. If you want to “properly” HH a multi, look at Union City, JC heights, or even further out towards Montclair/Bloomfield. Good luck!

Keith A. · Answer

When things break it's just the same as if you needed something done on your own home once you own it.. something happens maybe once every 2 years or so. Some years better than others. And you will acquire a list of trusted tradesmen. Painting or minor repairs needed in between tenants? Just do that yourself... its very easy especially when you include wine and standard low-cost stock paint from Walmart. We have used a realtor in the past to fill vacancies because I don't like screening a ton of people, but I am leaning towards doing that myself now. We bought our first residence and within 6 months decided we didn't really like it and so we rented it out while buying another home. It didn't cash flow for several years, but we live frugally and paid it off way ahead of time. Then we repeated with the next house, and then the next. And then the cash flow became quite nice (at least in our area).  They key - pick GOOD tenants without compromising standards... do background checks, verify job, income, get past landlord recommendations, no past evictions, etc. That is all legal here in TX, not sure about NYC.  Also include in lease that minor stuff such as clogged toilet, light bulbs, lawn care, etc are the responsibility of the tenant so you are not bothered everytime a bulb burns out. Again this is legal here.  Passive income is a good thing. You can do this, single or with a partner.

Keith A. · Answer

We have a lot in common, my partner and our dogs started off where you  are about 20 years ago. And here is what can happen to yall...We didn't end up adopting kids, and so we had money to buy houses. We paid off all the mortgages and rent them out as LTR (around 6 houses). This is our nest egg and we can retire at any time because of it. Air BNB and short term rentals are not on our radar in any way. We both have full time jobs and handling these rentals has NEVER been anywhere close to being enough burden to need a property manager in 20 years. If you have one rental, you can seriously TOTALLY handle it.  Interest rates right now are insane and will probably get worst, so pay cash for a LTR if you can, it worked out great for us, but please consider that you are in NYC which is a very unfriendly place for landlords. You could get stuck with a squatter or non-paying tenant that could devastate you. We live in Texas which is landlord loving, and so the risk is not as great. Again, we handle 6 rentals with full time jobs and have never needed a property manager. Cut expenses so you can cash flow. Hope this helps.

Randy Gutierrez · Answer

1 property won't get you very far, the only way to potentially make some respectable supplemental income from just 1 property is the STR route and that basically has to be a home run.

If you take the LTR route with 150k you can get 3-4 SFH's in Class C/Class D areas in PA or CT to start. Again that won't make you rich, you would need dozens but it at least gets the ball rolling.

Chris Schwagerl · Answer

Hey Nick!  Great question!

When I was first starting out, I just wanted to get some momentum and a little cashflow.  Looking back, it was a mistake to be so short-sighted.

I would ask yourself where you want to be in 5 years.  What do you want to be doing?  Do you want to own a few rentals, raise capital for bigger assets, or living off passive income?  Of course, there are other possibilities too.  You know you better than anyone on here, so I caution to give you advice.

Your vision will point you in a direction.  Sorry bro.  You're not going to retire after your first deal.  But there's power in that.  You're learning.  We're ALL learning.  Figure out your path before you make a move.

If you want to get into the active side, I have a course that can help you.  If you're looking for passive investing opportunities, I can help you as well.

But then again, a lot of people can help you.  Get your vision straight, so you don't get caught up chasing deals that don't work for you.  All the best bud!

Edwin Park · Answer

Why can't you house hack in Brooklyn right now via an FHA loan with 3.5% down?  It can be as simple as buying a 2 bedroom apt and renting out the extra room as an AirBnB or LTR/roommate.  You may not cashflow and things maybe tight, but nothing will beat the appreciation in 5-10 years.  One MF property we held in LIC Queens went from $1MM to $3MM appraised value after renovations within 5 years.    Another commercial property went from $1MM to $30MM in the same area after 15 years.  It was a warehouse sold to a developer to make townhouses.

But there will be ups and downs.  Always keep enough cash on hand for emergencies.

And you don't need a property manager.  If there's something urgent, I tell tenants to find a highly rated plumber or whatever on Yelp and save the receipt if they can't get a hold of me or my handymen.  Never had a problem yet.  You just need to be proactive on your maintenance!  Spend the extra money and make things reliable and easier to maintain.  Google, Youtube and BP are your friends.

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