All Forum Posts by: Alex Nguyen

Thanks for all of your advice everyone, I am now convinced that buying a good deal in this area as my personal residence will be a very good foundation from which to build up the rest of my real estate portfolio. 

What is the motivation for asking the buyer's agent to cut commission? Is it so that you can keep that 1% for yourself? Or is it because the buyer thinks the house is too expensive and you can lower the price of the house by 1% so the buyer likes the deal better? 

I'm also a young newbie and I'm going to tell you what I have found in this area and what others have told me.

I live in Northern Virginia and you will not find any properties that meet the 1% rule in this area. Of course it's possible, but you'll need to find a fantastic deal. You may find some townhouses that meet the 1% rule in Stafford or Fredericksburg VA, but even there it can be difficult. I've read that if you go up to Maryland, you'll find cashflowing properties in Hagerstown and Frederick, but I haven't looked into it myself.

For me personally, I see the Northern VA (where I want to invest) as an appreciation market. You invest in this area not for cashflow, but for debt pay down and increase in equity. Many here say cash flow is king, but based on reading many different viewpoints from more experienced investors, I'm convinced that appreciation and equity is what really builds wealth over cash flow.

So in practical terms, my strategy is to simply buy my first home in this area that is a relatively good deal where there is possibility to force appreciation. I will rent out some of the rooms for some extra income and when I have some equity built up, I'll use a HELOC to buy another investment. Maybe I'll stay in this area or maybe I'll get a cashflowing property out of state for the second one, I'm not sure yet. Either way, those are my observations for at least the Northern VA part of the DC Metro Area and how I adapted my investing strategy around the area.

Would you suggest owning your home before investing in Northern Virginia? (Or perhaps own your home first regardless of where you live?)

When I first became convinced that real estate investing plays a very large part in building wealth, I wanted to find cash flow opportunities. I planned on renting a cheap place for myself but buy investments to get passive income. However, I realize that cash flow is very difficult in the NoVA market due to very high home values and comparatively low rental rents (you may find properties that meet the 1% rule in Fredericksburg or Stafford, but I think that's it). 

This is an area where real estate appreciates pretty reliably I think and so it seems that going for an appreciation strategy is probably the best way to go. If that's the case, I'd might as well buy my first home as my first real estate investment. I can at least rent out rooms to pay for the expenses as I save for the next one. 

I'm looking into different markets for a buy and hold strategy. One thing I wonder is if the cost of maintenance in different areas is proportional to the cost of real estate. For example, if the houses are cheaper in a certain area, would the cost of repairs be lower than it would be in a higher priced area? Should I be putting away a greater percentage of my rents for repairs/maintenance depending on the area? 

I ask because I'm looking at some of the most positively reviewed turnkey companies on turnkeyreviews.com and many of the properties they have simply don't cash flow at all if you use the 50% rule. Obviously they don't believe you need to put away that big of a portion for repairs/maintenance. Maybe they are selling terrible investments, maybe that's how their market actually is. What do you guys think? 

Thanks for the replies everyone. 

@Damian LoBasso @Pete Perez The budget is definitely something I've been working on. I'm using YNAB to track my expenses and it lets me know how much money is left in a category's budget every time I pay an expense. Since I can use it on my smartphone and syncs with my computer, I can update it real time on my phone. I'll be sure to make my savings to be my first "expense" with every paycheck.

I've also recently discovered how useful apps like OneNote is on keeping documents organized. Another app called Office Lens lets you scan documents/receipts with your phone's camera and automatically send them over to a cloud or an app like OneNote. It's all quick and convenient. 

Thanks again for the replies and advice.

Thanks for the suggestions, I'll check them out. 

So I am about to start a new job and will soon be moving out of my parents house and paying my own bills. I was thinking about what kind of insurance plans I should get but then I realized there's probably a lot more I don't know. Can anyone recommend a resource of where I can find good information on personal finance that someone just getting on their feet should read?

Thanks

Hey everybody, 

I am starting my career as a registered nurse and I plan on using a large portion of my savings to invest in real estate. I have so far read the book on rental property investing and am learning a lot. I live in an expensive area (northern virginia, close to Washington DC) where ROI's are pretty low although they might cashflow a little. My goal is go for a buy and hold strategy and create passive income. The frequency in which I'll be able to buy properties will be very low, so I'll need to make sure to have a high value for each investment.

Right now I am exploring options on how to invest in real estate when you live in an expensive area. I hope to learn more from this community and I'll be sure to share my experiences so that we can all learn from each other. 

Thanks BiggerPockets for this community!