Should my first investment be close to home or out of state

Question

Hi guys this is my second post and the first one I got some great advice so I’m expecting nothing less on this one. I need some advice on where my first investment should be . I read enough have done some sample analysis on properties and now I’m looking for the real thing . My problem is I live in Staten Island ny and the house the rent ratios aren’t that good . I’ve been looking at foreclosures and there aren’t many in good neighborhoods . I then looked into jersey but with the high taxes it comes about to the same cash flow . I have recently started to look Into philly but I’m hesiatant due to the distance . I want to buy a foreclosure as my first property and rehab but doing so from a distance is making me tbink twice . So for my first investment should I do one closer to home where I have everyday access or further from home . Any advice is appreciated

John Warren · Answer

@John Paul many people on BP would tell you to invest in a less expensive market, and there is some validity to that. I wouldn't rule out New Jersey though. When I have visited my wife's family (outside of Newark in the burbs), I have seen some areas that look surprisingly like the markets I work in here in the Berwyn/Forest Park neighborhoods in the suburbs of Chicago. The high taxes stink, but if the numbers work with high taxes you will be fine. There is also something to be said for being in one of the largest MSA's in the USA. A lot of folks on BP are excited to buy a house in podunk nowhere, but your property in NY or NJ has the chance to really appreciate over the years. Why don't you do some more research on NY and NJ? Reach out to some local investor friendly agents and start doing more research on where the best deals are.

Shawn Mcenteer · Answer

@John Paul starting off can be roughing in our area. When I first started I didn't think I could invest locally. Thank goodness I rediscovered the way I thought and discovered the appeal North Jersey has. I was very serious about buying out of state but ultimately stuck with NJ. Taxes are high but so is the demand for rentals!

Marc Weisi · Answer

@John Paul I definitely agree with what's been said above. If purchase price is a limiting factor, I'd encourage you to think about house-hacking (unless there's some lifestyle give-up that you can't personally stomach). It's a great way to invest locally and will teach you a lot about managing a property in a relatively low-risk way. In addition, you may be able to qualify for a low down payment via an FHA loan.

John Paul · Answer

I really do appreciate all of the advice I have gotten so far. I guess I have some thinking to do because the money I will be using is from the sale of a brownstone me and my 2 other siblings inherited so I just don’t want to blow it . I’m gonna really sit down this week and think of my goals in detail .

Allyson Edwards · Answer

@John PaulI definitely prefer my own backyard, even if its an hour or 2 away. Especially if you plan on buying REO prop./ Foreclosure.

Richard Loniewski · Answer

Start with a market you know well

Joseph Ranola · Answer

I'm a Realtor in Staten Island and I agree that it can be very tough to find a buy and hold here. Houses are typically far cheaper on the North Shore but there are some real bad pockets up there as you said. I can put you in touch with a great Realtor/Investor in Lehigh Valley, Pennsylvania that has been working with a lot of people I know. Let me know if you're interested! If you ever want to take a look at some properties out here let me know as well. Don't forget that while houses are expensive here, rents are nothing to scoff at either. If you do end up finding the right place you can have a lot of cash flow coming your way.

John Paul · Answer

Buy and hold

Theresa Harris · Answer

Is your intent to buy and hold or to flip?

Steve Rozenberg · Answer

@John PaulI would focus on investing in yourself first make sure you’re educated make sure you have your goals down and you know why you’re even getting involved in real estate once you know your goals then you can create the strategy to get to that goal.Once you have your strategy you can now work it backwards and you can buy properties that will get you toward your goal the property is nothing more than a mathematical formula to get you a return once you have that return coming in that should be sending you closer toward your goal.If the properties do not match your strategy in your area just like stocks may not match your strategy in your area you have to go outside of your area to find properties that match we have many investors that live out of state and out of country buy from us in Texas and we manage it for them always make sure that your strategy aligns with your goal before you buy your first property