Quote from @Chris Allen:
Quote from @Ivan A Urquiza:
Good Afternoon, Hope all is well. My name is Ivan Urquiza, and I am a emergency room RN currently living in Miami, FL. First off, wanted to say a big thank you to Bigger Pockets as well as the BP community as a whole. Truly life changing. I am a complete newbie to real estate investing, however been devouring as many episodes of the podcast I can, as well as reading books recommended directly through either episodes or forums. I will be purchasing my first rental property this year, and I want to specifically get into STRs. I live in Miami, so the prices of property in my area are extremely high. My question to the BP community is this, would you recommend starting off with a rental arbitrage? Or purchasing a property outside of Miami all together. I feel that an arbitrage would be a good way to get my feet wet and learn the ropes, but again rent prices in Miami are very high so it still would be a costly endeavor. Also do not like the fact that I am not building equity and do not own the property. I do have some capital that I have managed to save through my W2, but it wont get me very far where I currently live. I would like my first deal to be close to home, but with the current prices purchasing anything worthwhile in Miami may not be feasible for me at the moment. Would love to hear some suggestions or maybe personal experience from anyone who has gone through a similar scenario. Look forward to hearing from you! Thanks again, take care.
Hey there Ivan and welcome to BP! I am an ICU nurse, so at least we have the love of BP to agree on lol.
Couple of things here
- Rental Arbitrage is not investing, but it is a great way to help you build up some capital and experience in STR's when starting out. You will still need some decent capital to do this though (Security Deposit, furnishings, etc...), could be up to $10k depending on the size of property. This $10k could be used as a DP on a primary home instead.
- If you are really wanting to get into STR's, I would suggest that you try and position yourself as a "Professional Host" or a Co-Host. Then you can "partner" with property owners and you would not come out of your own pocket to furnish a property, you would just manage.
- If properties where you at are really too high for you to afford right now, I would either focus on increasing your savings, or maybe doing the out of state investing.
What do you mean when you say the loan you applied for was "just not enough"? Like you did not get approved for an amount you needed or what? I know several people in Florida who are investing in the secondary and tertiary markets around the major cities and having good luck with that.
Hey Chris. Thanks for the reply and feedback man. Its greatly appreciated. Trust me when I say I get it lol, my older brother is an ICU nurse as well (he just started CRNA school actually). Not an easy profession to say the least, looking to take some travel contracts to get out of staff nursing for good.
In Miami realistically the capital required to start a STR arbitrage is more like 10-25k depending on the amenities you're looking to provide as well as area. Lots of not so appealing areas in Miami. The idea of becoming a professional host is amazing, actually have a friend who is successful in that space and have been working with him and been learning all I can.
As far as increasing my savings, I was actually looking at arbitrage as a way to build some more cashflow and ultimately save as much as I can. The travel nurse contract I am taking, as you know, will definitely help with that as well. I am not necessarily in any rush, my goal is to purchase one property this year. Just wanted to see what insight the BP community had on rental arbitrages. Does not seem to be a resoundingly positive one. However, I personally know people that make good cashflow with arbitrages and integrate that into purchasing properties. So did not want to rule that out completely either.
The loan was actually a pre-approval, was just testing the waters to get an idea of what I would be looking at. And yes I did not get approved for the amount I was looking for. Which was surprising to me having such a stable profession and working lots of OT the past few years. Yea going to be looking around Florida maybe a few hours outside of Miami.
Again thanks for the advice, much appreciated.
