Seeking Advice on my First Step into Real Estate

[Porfirio Ciaccio]

Hi All,

I'm Porfirio Ciaccio, 24 years old, and a recent college grad. Right now, I’m renting a studio on Miami Beach for $1,750 a month, and it hit me—what if I just bought the property I’m renting? At least part of the $2,000 or so I’d be spending would go towards myself. That thought led me down the real estate rabbit hole, and after stumbling on the BiggerPockets podcast, I’ve been hooked on the possibilities in real estate investment. It’s been about two months now, and I really want to get started.

The thing is, I don’t have a lot saved for a down payment ($15k) since I’ve only been working for about a year. Therefore, the only way I can get started now is through a homeowner loan that offers the 5% - 3.5% down payment option.

I like the idea of starting local since I know the Miami Beach area well, and buying a studio like the one I'm renting feels like a safe first step, so I've been looking at similar properties to what I currently rent online and running numbers. The problem is that it seems that it will be very difficult to generate even a neutral cash flow given the high HOA fees, taxes, and insurance in Florida.

With an estimated mortgage payment of $1,100, my total monthly expenses would be around $2,200 (approximately $700 for HOA fees and $400 for taxes and insurance). I also estimate that, after accounting for a 10% vacancy, I could rent the property for about $1,800 per month.

Even with that ($400) cash flow, I still feel like I’d be better off than where I am now, between the experience I’d gain, the equity I’d build, and the appreciation and tax benefits. The timing also seems favorable, with many motivated sellers in Florida.

I've read about strategies like house hacking but am not too enthusiastic about what it would take (also not very feasible given the current cash I have), also the ‘BRRR' method, though I wonder if it might be too ambitious for my first property. Or maybe not?

That’s why I’m reaching out to get your feedback. Given my situation, what would you recommend? Does my plan make sense, or should I consider spending a year saving for a larger down payment and a better property? Go outside Florida market? Ditch the Condos? My ultimate goal is to build a real estate portfolio that provides financial freedom, something I can manage passively on the side until it eventually surpasses my 9-to-5 income.

Thanks everyone!