Picking A Location

[Matthew Rodriguez]

Hello everyone,

I am relatively new to the Bigger Pockets forum and am excited to have found such a valuable resource. Over the past several years I have found that I have a growing interest in real estate. Although currently I do not own or manage any type of investment properties, I am hoping to begin to actually research the many details of what it takes to purchase various properties and ultimately become successful in the business. 

I have decided that investing in multi family rental properties (duplex and triplex's) best suits me. I currently live in Westchester County, NY (roughly forty minutes from the city). The county is divided up into roughly fifteen mid sized cities. (White Plains, Yonkers, Bronx. etc.) Each city has drastically different take rates and prices. (White Plains has an average $10,500 a year for a multi family, while The Bronx averages $8,500 a year). At first I was sure that investing in White Plains would be s sure fire bet, however after realizing that the city has one of the highest tax rates in the state, I am no longer 100% certain. Although White Plains has a growing younger population and commercial presence AKA more jobs, the idea that I have the option to purchase a similar property at a similar cost in a neighboring city seems to be more appealing, despite the fact that although the neighboring city isn't as safe or as recognized as White Plains itself, taxes are so much cheaper. 

Obviously rent rates match the selected cities taxes. (A two bedroom in WP is averaging $2,200 while a two family in neighboring Yonkers is averaging $1,650). I seem to be stuck on deciding what my next move should be in selecting city to begin searching for a multi family property. I would appreciate any help or advice on picking the right location.

I appreciate everyones help and am thoroughly enjoying reading over the forum!

Thanks!

Matt

[Ceasar Rosas]

@Matthew Rodriguez 

Hi Matthew,

Welcome to the wonderful world of real estate investing! I noticed that you mentioned that the Bronx is a part of Westchester County. The Bronx is actually a part of the 5 boroughs that make up NYC and is it's own County. The taxes in the Bronx versus Westchester County are the biggest differentiators. Starting off I would recommend you get pre-approved, unless you're buying cash, you should know what it is and where you can afford to buy. A good mortgage Banker or broker should be able to qualify you and break down the numbers taking rental units into consideration. You should also be on sites like realtor.com, zillow.com, trulia.com, to get familiar with market activity for sales and rentals. This will give you an idea of what direction you can go. Read a bunch of books. All the BP books, books like Hold, Millionaire Real Estate Investor, and others. Come up with your formula. Use BP's or find something that works for you. Start analyzing properties! Also be realistic. The market we have turned to the best deals are going to cash buyers who can take properties with major repairs and problematic tenants. If you're financing these are obstacles that your bank may or may not be able to work with. Once you have a plan in place and know exactly where you are at financially to purchase your 1st property start taking action. Good luck!