Where to get my first deal

Question

Hello All,

I'm new to biggerpockets and to real estate in general, so the only knowledge and experience i possess is purely academic and from conversations (and biggerpockets of course). I've lived in Queens New York my entire life and ideally would love to remain here, but I was considering if it would be a good idea to start off in a less competitive market to get my feet wet and possibly come back when i get some experience. My day job is flexible enough that I am able to work remote and my hours would be flexible if i do. One thing i do potentially have going for me if i remain in New York is the potential business of a family friend whose a contractor that may also choose to be a private lender. I have not pitched the idea to him yet because ideally i wanted to do fix and flips but was not sure if New York was best for that. So all in all, would a change of market tremendously benefit me as a aspiring real estate investor? All thoughts would be greatly appreciated!

Yudi Bassit

Steve Kontos · Answer

@Yudister Bassit

First off I am originally from Queens!  Nice to meet you.  Secondly as a fellow New Yorker myself I could not afford the prices in my market so after attending multiple REI meetings, read various books, and attended some seminars I ultimately chose to invest out of state.  I would have never discovered this way of investing had I not spent time going out to events and talking with various real estate professionals first.  Try to identify what type of investing excites you the most, then shadow someone who has done that type of investing successfully.  Best of luck!

Ray Lai · Answer

@Yudister Bassit

Based on your situation, I totally feel you on questioning whether to start in a competitive market so I'll throw a few options out there for you.

First though, focus on your primary career to build up some capital to invest with. Even with a FHA you need at least 3.5% towards your first house hack

Strongly consider a house-hack. In Queens good luck with MLS to find a 'deal' you're going to have to go off-market.

If your career allows you to earn great cash and live in a lower-cost/less competitive area, then you should take advantage of that as you start up. If look at overall returns those, cash flow + appreciation hands down beats just cash-flow (think midwest) when you're talking long horizons 20+ years. That being said, I was in a similar situation as you and I did both. I househack in San Diego (high cost, competitive market) while investing with boots on the ground in the midwest for cash flow. Next downcycle, I'll stop investing in the midwest and scale upwards here in San Diego.

Lots of different options but make sure you earn some good money and build healthy financial habits first to start REI on solid ground. Feel free to add me and ask any further questions.

Welcome to BP and GL!

Anthony Angotti · Answer

@Ray Lai

I have a friend that lives in Cary, NC by RTP.

He's desperately looking for something that is in an OK area that isn't dramatically overpriced. Do you know where/how people are finding deals around RTP?

Gary Swank · Answer

@Yudister Bassit Hi Yudister, While there are advantages to investing in markets that may be more cost effective to enter into, the best idea is to do your research into each of these areas. Do you want to move, or can you manage it remotely with the right people in place? Here in Pittsburgh, the market is hot and that combined with a lower buy-in than in other larger cities with greater returns on those investments, many Investors are finding Pittsburgh as an ideal market. And there are other cities with similar markets. It all boils down to what your goals are and how much analysis of these areas you have done. So do your due diligence and feel free to reach out to people in the areas you are considering to help in your decision process. Then compare this to your option of staying in your area, pursuing the potential business you have mentioned. Either way, I wish you much success as your embark on your real estate investing future....Gary

Gen SteMarie · Answer

Hi @Yudister Bassit!  I am also originally from Queens (Hollis)  :o)  I think the best thing to do is research, research, research (as you know, so much info is available right here on BP).  Direct Mailing is absolutely one way that you can go to find deals --and you don't at all have to be local to the area you are targeting -- so that is one way to really get your feet wet in a less competitive market.

Yudister Bassit · Answer

@Steve Kontos I was interested in fix and flips in NY that was contingent upon getting that family friend on board as a contractor and also possible investor. The other possibility i was willing to entertain was starting small by house hacking and getting some rent money there and then maybe getting into rental properties to get a better stream of fixed income. I appreciate your thoughts and i will continue to weigh my options and expose myself to as much as possible to come to a decision.

Mustafa Ahmad · Answer

@Yudister Bassit

Everything I have read and been listening to usually tells you to think of your first investment in two ways:

• Buy where you live because you know the market first hand and the city's schools, crime rates, which neighborhoods are in the up and up.
• Move somewhere, if you have the ability, and invest in another city.

Most people say stick to what you know, and that is what I am planning on doing. Obviously Detroit vs New York is not even comparable but one of the recent BP podcasts I was listening to mentioned that many first time investors find partners around the area by connecting  in their local REI Groups by going to the meetings and trying to hand out business cards or showing value to someone who is already in the market in your area. Clever financing is huge for someone like you and there are a ton of ways to do it, I am no expert, and it definitely isn't easy but it is worth a try if you are not planning to out of the New York area or have expertise in another area. Also if you are looking for deals start using this direct mail marketing technique and I am sure there are many like it. You need to follow through with deals and make sure you are consistently trying to connect with out REI in your area. One thing I have noticed as a newbie myself with no properties as of yet is that already I have people reaching out and offering to help me either find deals or get started all from BP. This community is extremely close nit so I truly hope you find someone who can partner with you or at least give you motivation to start finding deals through the many techniques that have been tested by many before us!

Good luck on your journey!

Ray Lai · Answer

@anthony angotti

I'm not personally familiar with that area because I don't have boots on the ground there. I'd try talking with Tiffany and looking 30-45 minutes out commute wise to see the secondary markets if the inner area is too expensive to start at.

Anthony Angotti · Answer

@Yudister Bassit I second a lot of people on here. If you can make it happen buying in your backyard is one of the best ways to start because you can leverage your knowledge.

Maybe you can house hack something in New York? That would help you save money to buy more properties in or out of state. Look for some wholesalers or investors looking to cash out of their portfolio.

Where to get my first deal

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