All Forum Posts by: Jesse S.

@Lane Kawaoka I 100% agree with you that owning in Brooklyn (or other high cost markets) is not an investment in real estate; I'm not fooling myself there. For my wife and I, we see it as a way to provide stability for our family but also preserve our capital by moving it out of the stock market. With a minimum 5-8 year time horizon we feel confident of getting our money back when we sell (assuming a 1.5% appreciation rate). 

We've moved 4 times in the last 5 years and each move brings months of looking for an apartment, packing, unpacking, etc. not to mention the thousands of dollars we spend each time on broker fees and movers. We're sick of it. So we really want to buy a primary residence just to establish a home base for the medium term. 

I'm just sorting through if I can do both at the same time (potentially) or if I need to think about the timing of when I start investing compared to buying a primary residence. 

Given that I live in a horrible location for local investing (i.e. Brooklyn) my wife and I are moving forward with the strategy of out-of-state, turnkey investing. While we haven't made our first purchase yet, we have a short list of finalist companies to buy from with the goal of completing our first purchase in Q1/Q2 and completing 3-4 purchases over the next 12-18 months. 

That being said, we're always on the lookout for an "affordable" apartment to buy in Brooklyn so that we can stay here long term as opposed to moving to the Jersey-burbs. At this point, I'd say there is a 50/50 chance that the stars will align and we'll be able to purchase an apartment in Brooklyn in the next 12-18 months (using a separate pool of funds than the ones earmarked for out of state investing). 

So my question is this: Should I hold off on out of state investing until I figure out my primary residence situation? For example, I don't want to get approved for a sub $100k mortgage for an investment property from one lender now, only to have issues with a different lender 6 months later when I apply for a much larger mortgage for my primary residence. I could see them raising liquidity issues, expansion of credit issues, etc. 

We're definitely going to hop on the out of state investing train at some point to start to build cash flow and net assets, however, I'm wondering if we should just pause for the time being. Would love to hear if anyone else has been in this situation and what they decided. 

Thanks BP community! 

@Jason G. fantastic post! Thanks so much for taking the time to share your experience with the BP community. You give a fellow New Yorker confidence that buying your first rental property out of state can be done!

@Darren Sager Thanks for the note. 

While I'm thinking of staying in the Metro area, I struggle to see why that is a better move than investing from a distance (e.g picking a new random location.... like Nashville) as in both cases I won't be familiar with the local area. 

For a whole host of reasons I'm ready to begin real estate investing, but there's one minor problem...I live in Brooklyn. This place is a competitive shark tank, margins are razor thin, and price appreciation has been insane since the crisis. My broker just emailed me a Nov 2017 recap for Brooklyn highlighting that the median sales price is up 20% YoY and the avg price per sq ft is up 5% YoY! I can't fathom making my first purchase under these conditions. 

When I think about expanding my location parameters a bit into NJ (because I might end up there in a few years) the picture gets a little better, but it's still somewhat intimidating since I don't have any local knowledge and I don't know where I'll end up exactly. Furthermore, a lot of the general advice I am reading about real estate investing (e.g. 2% rule), doesn't seem to apply to expensive markets like NY, SF, LA, etc. 

Does anyone have any recommendations for resources specific to getting started in expense markets? That may be a pipe dream as markets will always vary, but I feel like there should be something to the handful of markets that are not "normal". Any help or recommendations would be much appreciated! 

Full disclosure- I'm looking for a fairly traditional investment strategy of 2-4 family multi-unit, putting 20% down, using a management company, etc. Not thinking about flipping, trying to swing a no money down purchase, or screening tenants on my own with a toddler running around.