New Investor In NYC

[Xavier Burgos]

Hello Bigger pockets community, my name is Xavier and I'm looking to start real estate as well as real estate investing. I am currently working a W-2 job to build proof of income as well as building my credit. Im very interested in the concept of "House Hacking." Ive read and currently am reading books on how to invest into rental properties as well as what is needed to do so. With me being so young (19years old) as well as living in an expensive market (NYC), I'm curious on a few thing and hoping whoever reads this can helps me.

1. How much should I save for a rental property?

2. How much did you save and spend on your first rental property?

3. Is the market in NYC worth investing in, regardless how expensive it is?

4. Am I too young to invest into a rental property?

[Ben Lin]

Hi @Xavier Burgos

Good that you're thinking about investing and house hacking when you're only 19. I wish I started investing in RE when I was in my 20's. With your mind set and hard work I am betting you will be a multi millionaire in the future. You're definitely not too young to invest into a rental property.

NYC is such a big market with so many sub markets. You have to find out where you want to invest and househack. Is it in Manhattan, Brooklyn, Queens or Bronx? Then there are so many different sub markets in those boroughs.

OFC the best is to save 20% of the purchase price. So if your purchase price is 1M, then you would need at least 200K. There are many other financing options for you. I would highly recommend you watch Biggerpockets youtube video where they interviewed Pace. He talked about creative financing and the info he gave in that episode was all gold, especially for young people like yourself.

For me personally NYC is the best market to buy in the US right now if you have the money. Why? Because prices have not increased and in some areas prices are even lower than 2016-2019 market, while the rest of the US are seeing 25-40% increase in prices. And with inflation at 20-25% you're basically buying NYC properties at 35% to 40% discount inflation adjusted if compared to 2016-2017 prices. 

Lastly this pandemic will end one day. We just dont know when, but it will end one day. Probably by the end of this year or mid way next year? And when that happens guess what? People will flock back to NYC because NYC is the greatest city on earth and it is also the capital of the world. Any NYC broker will tell you that people are already starting to move back to the city, that's why the rents are going up and selling prices are inching higher everyday. NYC is like Paris, London, Moscow and Shanghai mashed into one city LOL. Who doesn't want to live there? 8 out of 10 people want to give NYC a try. If you can make it in NYC you can make it anywhere - Jay Z LOL.

Good luck to you. Keep working on your credit score and income. Maybe add one or two income streams if you can. While you're young you should try to save every penny and live as frugal as possible so you'll have some money when opportunity knocks.