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Updated over 5 years ago on . Most recent reply
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Invest locally in expensive market or remotely cheaper
Hi guys, would love some feedback here!
Me, my wife and my 3 year old son live in Brooklyn, NY. It is way too expensive to buy anything worth living in here (at least for us, right now), but just outside the city in places like New Rochelle and Yonkers, we could possibly find a somewhat affordable multi family to house hack in. Probably around 600-700k and would need work, but with an FHA loan we could afford it, although the mortgages look scary. Would this make sense to invest in, as opposed to continuing to rent in our Brooklyn apt while investing remotely in a cheaper market? Trying to weigh the options as to which one would enable us to get on a faster trajectory towards accumulating cash flowing properties and eventually financial independence within the next decade or so.
What are your thoughts?
Most Popular Reply
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Hey Thomas,
FHA is a great way to get started as it is easily the most powerful way to leverage your money at 3.5% down - you're essentially taking ownership of an asset using 96.5% other people's (the bank's) money! In Westchester there are areas where multifamily properties cashflow, the school districts are good (better than Yonkers, Mount Vernon, etc) and the housing market is strong and full of good potential tenants - like yourself!
Worst case if you hate it or want to move back to Brooklyn you can move out after living there for a year and rent out the unit you were living in as long as it’s a positive cash flow property. Your tenants will be laying down that big mortgage and generating monthly profit and equity for you.
It's a great way to go and considering you can purchase a $650,000 asset for $22,750 down + closing costs you will be making an excellent cash on cash ROI because of the very low initial cost of entry. If you want to learn more about the area or ask me any questions feel free to reach out!