Trying to get started in buy and hold

[Hector Asencio]

Good morning, Trying to get started in buy and hold soon. Based in nyc, looking to invest in upstate NY and out of state and Have about 40k saved up. Have some questions about starting off.

Should I go to a bank for a conventional loan within nyc for a property outside of the city or a bank near where the property is located ?

Which would be better , a bank (small , large ) or credit union for funding ?

For a first timer, is setting up an LLC before investing better or just setting up liability insurance ?

Can I take out multiple conventional mortgages at the same time to fund multiple properties at the same time?

Which states, more specifically with cities are low price in real estate and are good starts for someone new ?

Would it be better to get turn key properties first or go straight to BRRRR method?

Thanks , any advice would be appreciated 

[Whitney Hutten]

@Hector Asencio Congrats for getting into the game!  I agree, work on your education for sure. I'd add in the book Cashflow Quadrant by Kiyosaki (personally I think it is a far better read than Rich Dad Poor Dad).  

If you are starting out, I'd first think about WHY you are investing, what kind of money you need to fund that WHY, then ask yourself what really interests you and how you want to spend your time.  I have a whole process for this, so PM me and I can share it with you.  Once you do this groundwork, you will have greater clarity on your path and what will actually get you there and it will be backed by numbers and a plan rather than subjective responses from the interwebs.

As far as BRRRR, I personally love this strategy if executed correctly, and I disagree with George. I'm using the forced equity in a property to act as the downpayment on my refinanced loan. I now have a property that cashflows very well, that is repaired and attracts a high-quality tenant, with little/none of my personal equity in the property. If I have to, I have room to slash rents to stay competitive, and could even fire sale in the worst of markets and again not take that big of a hit to my equity position. If you buy turnkey, that is not the case, you are usually putting down 20-25% and will have a much harder time doing that.

Regardless, you only lose equity if you sell in the down market.  So what matters most in this environment is having reserves to help you weather the uncertainty (I suggest 6-12 months + your insurance deposits).  Also, this pandemic brings light to the fact how placing quality tenants is actually a defense strategy for your financial position.  

As far as your other Q's:

- Not a lawyer, but I'd work on being a good landlord (fixing all health and safety items), having a good liability policy, using leverage, and having good umbrella insurance before getting an LLC (they can be expensive)... LLCs are great... just not my first choice for asset protection

- You can get 10 conventional loans in your name based on your ability to qualify.  And yes, it is possible to get multiple loans at the same time if you are working with an investor savvy lender who can help you structure that

- If you are sticking with conventional financing, you might find better programs with larger investment savvy lenders.  PM me if you need names as I keep a list.

- As far as scale, if you purchased quads, you could have 40 units with just 10 loans. If you have a spouse, they could get 10 as well... so that could be 80 units before moving to commercial financing

PM me with Q's!