22yr old investor and my plan. Would love your feedback

Rental Property Investor · New York, NY · Member since 2018 · 14 posts · 15 votes

My goal is to achieve 3000 a month in real estate for my future and i would love to see if my following strategy sounds realistic or if it can be improved. I’m open to hear everything.

THE FOLLOWING IS MY SCENARIO:

I’m 22 and I live in NYC BROOKLYN. I want my first property to be a triplex or fourplex.

Everything in NYC is expensive so my plan is to purchase my first property in New Jersey using a FHA loan.

Once I have that loan and get the property I want to use the BRRR strategy and continue to get a couple other triplexes or fourplexes. Also how much money should I save for the Rehab portion?

I really do not want single family homes or 100 properties.

Just want about 3,000 a month of passive income in a future from my properties.

What do you guys think?

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Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

OK. What's your plan then?

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Krystal Stowe
Rental Property Investor · Chicago, IL · Member since 2016 · 16 posts · 4 votes
7y
@Michael Ealy Great comment! Made me realize my plan is just a wishlist. I'm going to use this comment to create a solid plan.
1 Reply
Kalen McCallum
Central Jersey · Member since 2018 · 8 posts · 1 vote
7y
@Shawn M. If he was to wholesale or get a duplex property for a lower cash offer - would that put him in a better position to leverage the rehab cost with the FHA loan.... creating a better ROI in the end ?
0 Reply
Account Closed
Member since 2018 · 83 posts · 66 votes
7y
@Aurus J. Sanchez make sure you don’t overpay and that you’re comfortable being in your rental situation for quite a while. With real estate prices softening, you’ll do okay of your place is rented out and cash flowing, but it may not make sense to sell for several years if we have a recession.
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Shawn McenteerBusiness Member
Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
7y
@Kalen McCallum yes if he can get a property for lower cash offer it will help him, it is tough to do so in todays market but possible. Not sure if he can wholesale and use FHA loan in same transaction.
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Shawn McenteerBusiness Member
Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
7y
@Kalen McCallum yes if he can get a property for lower cash offer it will help him, it is tough to do so in todays market but possibl
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Tina Jenkins
Member since 2018 · 101 posts · 14 votes
7y
@Aurus J. Sanchez There are many loan structures you can go with maybe going to the bank sit down with your banker and explain your plans. Find out what best fits your situation. You are young so you may need a cosigner and everything is possible don't stop if one door shuts just open another one. Read Robert Kawasaki Rich Dad poor Dad I love his books on investing.
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Quito Keutla
Real Estate Agent · Renton, WA · Member since 2017 · 204 posts · 151 votes
7y
@Aurus J. Sanchez the first investment you want to make is in yourself, like others have mention here, take the time to educate yourself. I know first hand what a lack of education can do for you. I was able to acquire lots of properties (over 10 rentals) but because I wasn't educated on how to buy right, manage right, and financed right I've lost all my real estate holdings and now I'm starting over. Multifamily investing is a long game and being 22 you've got some time to learn and being here on the BP Community is a great place to start. Yes $3000 per month is doable. Happy Investing!
1 Reply
Fernando E.
Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
7y
@Aurus J. Sanchez, I like the house hacking! When you buy your first property, rent out the other units and save your $ saved from rent, tax return and your salary and get into bigger deals. The book “set for life” by @Scott Trench will be perfect for a young smart ambitious man like you my friend! Best of luck, you can do this! 👊🔥
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Timothy W.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
7y
What plan do you need to be a landlord? It's 3rd grade math on a profession that hasn't changed since around 700 AD. Aurus, don't fall into the trap of people who over-complicate the simple. There is no house "hacking" in landlording - that's just buzzword language someone came up with to sound like Tim Ferriss after they figured out "ninja" landlording wasn't going to fly. It's not complicated, it's just a pain the arse.
1 Reply
Bill Goodland
Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
7y
@Aurus J. Sanchez I would listen to a couple hundred podcasts and read a couple books and I think your “plan” may shift a couple times but you will get a much better understanding of the pros and cons of each type of investing and will have more knowledge to avoid needing to ask “what should I do”. If that is your question, in this business between brokers, lenders and contractors, they’re always going to steer you in the direction that most looks out for their best interest and without the knowledge basis to know what is and isn’t good advice, you won’t be able to as effectively look out for your own
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Aurus J. Sanchez
OP
Rental Property Investor · New York, NY · Member since 2018 · 14 posts · 15 votes
7y
@Tim Wieneke
Well I was just planning to have a property manager do the work and I will pay anything from 8-10 percent.
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Timothy W.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
7y
Originally posted by @Aurus J. Sanchez:

@Tim Wieneke
Well I was just planning to have a property manager do the work and I will pay anything from 8-10 percent.
Honest question, because the quality of property management around me is so varied, would it matter to you if the property management firm was owned by an attorney? Would it matter enough to be worth 15% if your tenants had to go to a law office to sign a lease, received notices from a law office and received a pay or quit from a law office? I've got a little over a year till I take the bar and I'm researching the concept. Thanks Aurus.
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Aaron K.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
@Timothy W. no. 15% is insane especially depending on what the unit rents for, and any certified property manager should know the law just as well.
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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
7y
@Aurus J. Sanchez it can be done close to NYC but will be difficult. If you can find a similar job outside of NYC I would consider it and possibly move.
Rehab is all dependent on the individual property.
I would look into starting FHA for your first property and then learn the BRRR strategy from there.
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Elijah Velasquez
Austin, TX · Member since 2018 · 5 posts · 1 vote
7y
@Aurus J. Sanchez I am in the same position as a 22 year old myself.
I would recommend trying to get into wholesaling first to start your real estate investment journey.
It’s difficult (at least for me) to get a loan or finance a home with my own capital so through wholesaling my goal is to learn how to evaluate properties and create relationships with people in my market first while ideally earning capital for future investment strategies.
Taking action is the biggest thing so whatever you decided to do, do it 100%.
Good luck and reach out if you need anything!
Would love to connect on our journey.
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Timothy W.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
7y
Originally posted by @Aaron K.:

@Timothy W. no. 15% is insane especially depending on what the unit rents for, and any certified property manager should know the law just as well.
Interesting. I looked at the 7 required courses for the CPM. None of them were law courses. I can't conclude with confidence that "any certified property manager" would know the law "just as well". Thank you for your input though.
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Aaron K.
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
7y
@Timothy W. I said should not would; and in this case perception is reality, if investors think a property manager is good enough (which they clearly do) why would they pay a 50%+ premium for anything more?
P.S. an attorney also SHOULD know the law as well it doesn't mean they do 100% of the time.
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Shawn McenteerBusiness Member
Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
7y
Originally posted by @Aurus J. Sanchez:

Well I was just planning to have a property manager do the work and I will pay anything from 8-10 percent.
If you want to make money in NJ it will be extremely tough unless you plan on being hands on. Live in your property, do what YOU can do to renovate property, manage property. If you are considering hiring property management, I would say join the out of state turnkey crowd (which is not a bad thing, just not my thing).
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Aurus J. Sanchez
OP
Rental Property Investor · New York, NY · Member since 2018 · 14 posts · 15 votes
7y
@Shawn M.
Thanks for your answer. To be honest I really do not want to do hands on. I wanted to hire a property manager. So I guess I will have to invest in a different state like Idaho or another state in the Midwest. Reading all the books about it. What is it that you did to start?
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Aurus J. Sanchez
OP
Rental Property Investor · New York, NY · Member since 2018 · 14 posts · 15 votes
7y
@Caleb Heimsoth
Thank you so much for the answer. I’m reading all the books from BP and listening to their podcasts. But my question to you is how did you get good at analyzing properties other than watching their free videos on YouTube?
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Shawn McenteerBusiness Member
Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
7y
Originally posted by @Aurus J. Sanchez:

@Shawn M.
What is it that you did to start?
lots of research, networked, took action.
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Chris Grenzig
Property Manager · Orlando, FL · Member since 2016 · 479 posts · 277 votes
7y
@Aurus J. Sanchez Hey bud I'm 27 living in Brooklyn, I invest out of state and been doing it for roughly 3 years.
Here's the the plain truth from what I've seen in this thread. You got to figure out more options than pigeon holing yourself in house hacking BRRR strategy in NJ or investing in the midwest. There are hundreds of different options available to you and the more creative you get, the better off you'll be. Right now, it feels like you're trying to force yourself to do one thing to meet this goal of $3k a month in cash flow.
First off would love to know how you arrived at the number and why that's your goal.
Also, it's crucial to have big/long term goals, but way more important to have small/short term goals.
How are you getting your first deal?
How are you getting to $100 cash flow a month? $1000 per month? $2000 per month?
How are you going to find the deals? Fund the deals? Get loans on the deals?
If you were asking me my opinion, I think you need to take the next couple of months to figure out as many different options as possible and then start narrowing it down. You may want to buy 12% cap rate mobile homes in OKC, you may want to flip land in Massachusetts, you may want to wholesale in NJ, you may want to move to Florida and house-hack a 4 unit.
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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
7y
Originally posted by @Matthew Mason:

Hate to be negative but Reading this gives me a headache.... Kind of annoying how people hop on this site and make posts before taking even a moment to read an article or book or listen to podcast. "long distance house hack FHA BRRRR"
Read a few books pal then come back and we are happy to have meaningful conversation....
Cheers
...and your point being,....what?
1 Reply
Kalen McCallum
Central Jersey · Member since 2018 · 8 posts · 1 vote
7y
buy & hold *
0 Reply
Matthew Mason
Rental Property Investor · Glens Falls, NY · Member since 2016 · 30 posts · 16 votes
7y
Originally posted by @Joe Villeneuve:
Originally posted by @Matthew Mason:

Hate to be negative but Reading this gives me a headache.... Kind of annoying how people hop on this site and make posts before taking even a moment to read an article or book or listen to podcast. "long distance house hack FHA BRRRR"
Read a few books pal then come back and we are happy to have meaningful conversation....
Cheers
...and your point being,....what?
@Joe Villeneuve Point being read a few books rather than hop on here and throw a few buzwords around while not having the slightest clue about the most basic concepts that can be learned in a matter of minutes of research.
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