First time investor - where to turn?

Question

I am 28 and looking to start my first project. Ideally, I would love to find a multi-family rental property in the Philadelphia or NYC area. I live in Brooklyn, but am from the Philadelphia area. I have a full-time job working for at tech startup in NYC.

I have read Brandon Turner's "Book on Rental Property Investing", however am looking for more outlets to learn from. Some folks have advised I get my NYC real estate license and work as a part-time agent / leasing agent. Thoughts?

Any other suggestions as to where to turn? Online courses?

Ahmed Saad · Answer

When I was 28 I was single and w/o kids. If I had the mind to get into real estate investment like yourself I would hit up Philly. Brooklyn is outrageous and, although it's where I am, it is NOT where I would be if I was in your situation. Philly is a very cool city with a lot going on and it's very affordable. You could grab a duplex, triplex, or ideally a 4plex and house hack. Demand there isn't so great as to preclude you from purchasing via a FHA loan.

Do NOT buy a SFH/condo/coop.

Charles Xia · Answer

Hi Will,

I learned a lot of my real estate investment knowledge from the bigger pockets podcasts. I've listened to almost all the podcasts and there is such a wealth of knowledge there. I am a real estate investor and a licensed NY Real Estate Saleperson.

First thing I would say is being an investor is very different from being an agent. I did my first deal as an investor without having my license. Starting out you might want to look for an experienced Real Estate Agent who knows how to work with real estate investors (I've personally gone through 20-30 agents who had no idea what I was looking for in terms of investments when I was trying to do my first deal). I attached a link from Brandon Turner that highlights the difference from being an agent and an investor. I would say figure out what kind of investor you want to be (buy and hold, appreciation, flipping, wholesaling).https://www.biggerpockets.com/blog/real-estate-license-investPhiladelphia might be an easier market to get into because the prices are cheaper than NYC. This might also depend on your comfort zone of investing out of state. Philadelphia is close to NYC and since you grew up in the area you are probably more familiar with the neighborhoods. But consider some of your long terms goals when deciding. If you start in Philadelphia would you want to to build your portfolio there. You would need to check up on the properties. Will you hire a property manager? Will you manage the first few deals by yourself? Would you move back to Philly? Are you comfortable with the commute?

For me, I live in NYC and invested in NY and want to be close to my investments. I self-manage while working full-time because that is what my comfort zone is. I was looking into the Philadelphia markets because everything in NYC is very expensive. I didn't really want to commute to PA all the time so I stayed and kept looking in NYC. Took me 2 years to do my first deal in NYC.

I hope this helps.

Happy Investing,

Charles

Abel Curiel · Answer

Hey @Will Graves,

Welcome to BP!

You've received some great advice on here so far from the other BP members.

I don't think getting licensed is the best route for all of the reasons cited by @Brendan Markle.

That being said, keep weighing the pros and cons of investing in Philly and NYC and consult professionals in both markets if you need some help narrowing down your options.

If you're looking at NYC, I'm 99% sure house-hacking will be your best bet. You'll be able to pay less to live in a property you own vs. what you pay in rent.

Best of luck to you moving forward!

Abel

Brendan Markle · Answer

Hey man!  I'm a Philadelphia Real estate agent/investor,  unless your planning on buying 1-2 properties a year right off the bat I woulnd't personally recommend getting your license right away.  Between classes, local association fees, MLS fees, and broker fees, your looking at $1500-2000, and a decent amount of time to get started.  Also as a part time agent unless you have a massive network (and if you do that is awesome! )  it will likely take 3-9 months to get any clients, leasing, buying, or selling.  In my opinion its not something you do just to learn more about the industry, there are plenty of online resources where you can do that for free.

Ralph Chiaia · Answer

@Ahmed Saad I think you hit the nail on the head. Brooklyn is outrageous. The cap rates are crap. Unless prices drop drastically, these facts won’t change. I’d go PA all day.

Sri Chakravarthy · Answer

@Will Graves

Will,

I'm starting out as well and looking for MFR investments in Dallas area, where I live. As far as MFR education is concerned, I would say you started off well with Brandon's Real Estate Investment book, as the book gives you an overall RE picture very well.

I'm not sure of others on this forum, but off late I have explored some MOOCS such as Udemy for Real Estate education and found the "How to Analyze Multifamily Investment Opportunities" by Simon He  "phenomenal" for the price the course was offered ($9.99 a course when those specials are around and they always do). Course was IMHO extremely thorough and detailed with lot of spreadsheet analysis getting into the weeds of MF investment analysis. DM me if you are interested to learn more about the course and I can share some more feedback if you are interested.

Best,

Sri

Todd Dexheimer · Answer

Since you posted in the MF forum - Books: ABC's of Real Estate Investing by Ken McElroy, Multifamily Millions by David Lindahl, Emerging Real Estate Markets by Lindahl.

Podcasts: Michael Blank has a good MF podcast. My podcast covers a lot of MF - Pillars of Wealth Creation. Multifamily Foundation podcast with Jason and Pili Yarusi. Target Market Insights with John Casmon. So many others are good (sorry to those I'm leaving out)

Conferences (as soon as they start back up again). Many good conferences out there on MF.

Evan Polaski · Answer

@Will Graves I want to echo the figuring out your goals piece, and then back into steps to get there. But even offering up ways to learn is pointless if we don't know what you are trying to achieve: fix and flips, SFRs, STRs, large apartment complexes, self storage, mobile homes...  All have their own nuances, things you need to factor for (a short term rental needs TP, and right now that is hard to get in most markets, and if you have too much on site, guests are stealing it, if you have any guests).

The moral is start getting these down, they might be financial or they might be operation (number of units) or they might be lifestyle. I recommend thinking about lifestyle, because that will typically lead to financial, which will typically lead to operational.

Adrian Fajardo · Answer

@Will Graves well Will what do you hope to achieve in Real Estate? You don't really have to answer that question here. The answer is not for me but for you. Just by reading your post it seems like you're in the middle of the ocean and figuring out what direction to go. I'm a bigger picture kind of guy. It's a bit cliche but if you read any book about success, every one of them started out with a goal. Once, you figure out what you want then work backward from there.

I haven't done any real estate courses but I think there are more than enough brilliant minds in here that can get to where you want to go. AND it's free!!! You just have to figure out what you want so when you ask specific questions, the right people will also show up to guide you.

Anyway, I hope this helps! I wish you luck on your investing journey! Stay safe out there.

Greg Dickerson · Answer

The best thing to do when getting started is study your market and get to know it intimately down to the block, street and specific properties you are targeting. You can learn a lot studying listings and offering memorandums and talking to the agents and property managers.

First time investor - where to turn?

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