Where should a Newbie start investing?

Question

Where should a Newbie from NYC start investing in rental properties? New Jersey? PA? Connecticut? Upstate NY? Which place is landlord friendly? I'm looking to start in SFH or hopefully a multifamily. Thanks in advance!

Rich Vogel · Answer

@Leonardo Carrasco If you cant start locally due to being to expensive i would still try and find something within in a hour or so. Your main goal is to not work your rental properties but in the beginning you need to learn everything about each process even if you plan on getting pm. Once you find 2 or 3 areas go to some meet ups and talk to some investors about the areas. Drive around and know the area inside and out. I would personally recommend the lehigh valley as a great place to invest.

Craig Bellot · Answer

Hey Leonardo, the first steps I would recommend as a new investor is to get a handle on analyzing the income, expenses and ROI of these properties in these areas.You can use the Bigger Pockets calculators to start.  Use Zillow and rentometer.com to get data and analyze a few from your home to see what type if returns there are.If these meet your investment criteria then start looking in person. Let me know if you have any questions.

Fasil Khan · Answer

@Leonardo Carrasco

I would look into how much cash you have available and what you qualify for as loan. etc. Do you want to be hands on or looking for vetting teams and put your capital to work. Example if you invest in NJ are you looking for a partner, solo by yourself and do you want to manage the property. Most of all study the market and numbers once you decide how much time you want to commit to for the rentals.

Jerid Meagan · Answer

Hello @Leonardo Carrasco,

I would suggest that you identify your investment criteria first, and then start to identify those MSAs that help meet that criteria. For example, are you looking for a buy and hold or would you prefer a flip? Once determined you might decide that you are looking for the following:

1 - Cash-on-cash of 10% or greater.

2 - 20% below market.

3 - Price point of XXX,XXX and below.

Once you have this it's then a matter of looking for a market where deals such as this exist, and putting together the right team within that market help achieve these goals (realtor, lender, etc).

Thanks,

Jerid

Nick Peters · Answer

Real Estate is a math game so invest where numbers work. Obviously, coming from NYC, you will quickly realize that numbers hardly work there (unless you bet on appreciation) so you'll have to look at bit further away. There are still deals to be made in areas such as Jersey, Yonkers, deep queens, Bronx etc. Keep in mind that 99% of the deals you'll see are not good ones, so be patient and persistent and you may find the one.

Some people will tell you to invest in other states. Although it makes sense from a math standpoint, I would not encourage you in doing so, especially as a new investor.

Overall, spend some time screening the market, run the numbers and be reactive. Build your network and be ready to pull the trigger (both mentally and financially)

Best of luck

Where should a Newbie start investing?

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