I'm Finally Taking The Leap Forward

[Account Closed]

After some inspiration and listening to the BiggerPockets Podcasts, I feel inspired to take the leap forward. I've come to a realization that I do not want to work a 9-5 job, making others rich and not having my own life until I'm 65 and retire, that is not the life for me.

I'm 23 and I've saved up a lot of money to start out my empire with so my risk tolerance would be on the higher side. I'm currently looking into buying rental properties out of state and start my empire from there, but I'm not sure where to begin. I'm looking into multiplex homes and I am able to purchase multiple properties at once with the liquid cash I have in hand, but I'm worried that the deals that I see on MLS are not "great deals" compared to what other people are getting.

I've done a lot of research into the markets I'm looking into and what type of property I want to put my money in.

The markets where I'm looking into would be Kentucky, Illinois, Idaho, etc.

[Alexander Szikla]

Do a house hack in NYC itself since you live nearby! 3.5% down via FHA lets you buy a whole lot of marquis NYC realty. Conserve the rest of your equity for other deals too or carrying for a few months (maybe a year).

Personally, I think all the folks who moved away are already getting bored and already coming back. Plus, the vaccine is getting rolled out which will curb the spread tremendously. Now is the time to buy.

Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. The kicker here is that rates are much lower than the 7% that OP noted. Today nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.

Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.

If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!

Lastly, as your primary residence, a lot of equity appreciation will be TAX FREE ($250k exemption if single, $500k exemption if married) which is major.