All Forum Posts by: Will Stahl

Sorry Everyone, I should have provided actual data right off the bat. But thank you for the replies @John Cushing and @Kurt McDowell. 

I'm aware of the low down payments with a FHA loan but since I'd be living in one of the units I would have to 'pay rent' since the rental income from one unit wouldn't cover all of the expenses. My hope was to end up living for free. So my thinking was to put down a larger down payment in order to decrease the monthly payments enough to point one unit would cover my expenses. However, after writing down the numbers I realized that putting down an extra 30K really wouldn't lower the monthy payment that much - only a few hundred dollars. So I'm going to run with the idea of putting 5% down. Below I'm going to provide 2 different calculations for the same house. In one instance I'll be renting both units. In the other example, I'll be living in one unit while renting the 2nd bedroom to a friend for a slightly discounted price.

How the investment would look if I put 5% down and RENT BOTH UNITS are rented. In this calculation I included Monthly property management expenses. The Electric and gas will be paid for by the tenant but I included $600/year to account for the cost of those utilities during vacancies. 

In this example, I'm renting 1 unit for $2000 and the spare bedroom in my unit for $750 to a friend. I removed the property management cost since I would be doing that, and increase the electric and gas to reflect what I would be paying (I'd be splitting utilities with my roommate). As you See, I'm not even close to cash flowing in this scenario (ugh). Id basically be paying a rent of $715 a month to my self. Not ideal, but that's cheaper then I pay now and at least I'd be building equity in my home and getting experience rather then handing over to a landlord. Plus, when I decide to move I could rent out both units and the place would cash flow (As seen above).

What are everyone thoughts on these two scenarios? I'm not very well versed in breaking down the numbers so please be critical. Would scenario one be a good enough deal? Should I even consider scenario two since its not cash flowing. I'd really appreciate some feedback. I want my first deal to be a good one.

As a side note, the taxes are $10,500 which is included in the mortgage cost (Can't escape high taxes in Westchester - Mount Vernon, NY to be exact.) And the 300K loan includes cost to fix up the property, so it would be a 203K rehab load. Also, I know scenario one isn't really possible right off the bat since a FHA 203k loan I would require to live in the property for at least a year.

Thanks,

Will

Hey BP Community, 

I wanted to take the time and outline the strategy for my REI here in the forums and hear feedback from the community to see how I can improve my ideas. Some quick background on me - I'm 24 years old, live and work in Westchester County New York which is about 30 minutes north of NYC. I'm coming up on 2 years at my current job and am finally starting to compile some savings. I briefly considered buying an out-of-state investment property first, but have shot that idea down for several reasons which I lightly touch on below. This is my current thinking and game plan....

Buy a duplex in Westchester county for roughly ~250K - 325K with roughly 15% -20% down. That puts me in a position where I could still afford the monthly payments (Taxes and everything included) even if I experienced vacancies or something awful like an eviction. I notice that there are a fair amount of 3BR/2BR Duplexes in the areas I'm looking at which would be perfect since I could rent out the three bedroom and live in the two bedroom. The three bedroom rental would largely cover my expenses  (if not fully cover them) but I would also be looking to rent out the 2nd bedroom in my unit which would  allow me to cash flow a few hundred dollars a month. Having the 3BR/2BR would give me the flexibility to move down to the three BR unit if I end up eventually starting a family. In that case I would then start renting out the 2BR. Once I'm living rent free in the duplex I would be saving a lot more money. Not just from what I'm cash flowing but from not having to pay rent! This is when I would like to start buying properties out of state with a focus on cash flow.

I'm curious if anyone has any tips/suggestions based off of what I wrote above. There's a few things on my mind in regards to my situation that I'll list out in bullet format below.

• From my understanding I can write off the interest of my 1st and 2nd mortgages. So buying a duplex in New York first, rather then buying an out-of-state rental property first, is the right call since it will give me the bigger tax savings compared to buying a cheaper rental property out of state. (It'll also allow me to live rent free)
• I believe certain mortgage, such as the 203k, require you to live in the residence for a set amount of time. This is an option that could come in handy.
• It would give me some experience with loans, buying and owning a property, and being a landlord.

If anyone has any tips/suggestions/comments I would really like to hear them.

Thanks in advance everyone,

Will

Thanks John, I looked through the list and was able to find someone who is going to email me about the next REIA meeting in Westchester County. Once I receive more information I'll post it here and maybe it can help someone else. Thanks again, Will

Hey everyone, I was wondering if any of you were from the Westchester county, New York area. I'm trying to link up with investors but haven't found any information on local REIAs online that are still active. I found a few emails/phone numbers on Meetup.com but I haven't heard back from any of the people I reached out to. If anyone would like to grab coffee and chat please let me know. I'm new to the field but have been reading a ton and would love to listen to what others have to say. Thanks everyone, Will

I'm in the same boat as Eric Knowles. I've done some property analysis on my own and watched some BP videos but I'd love to check out your on going work or an entire area!

Thanks for all the responses everyone! This is a great community. I appreciate ALL of the responses and am looking into each. I'll be making more post in the future about my progress, thanks!

Thanks for the feedback guys. I've read a bit into turnkey properties and It seems like they really take out the chance to make a good return on investment. However, I understand that the reason they exist is because of people like myself who are in a situation where they don't have much knowledge or time. I wonder if the best way for me to get started is to save up money for a few years and move somewhere that will allow me to live and work nearby the real estate id like to own. I just feel like I feel i set this as my next step it will never happen.

This is my first post on Bigger Pockets and I hope there's many more to come. My name is Will and I'm 24 years old living in Westchester, NY. I graduated college 2 years ago and have been working as a business analyst. I consider myself lucky because the job pays well. But the idea of doing this or anything which involves me sitting in a windowless box for the next 40 years sounds awful-terrible-miserable. I'm not sure which term describes it best. I know too many people who've do that their whole lives and have little to show for it. I've been reading and listening a lot over the past month and it really has opened up my mind. I've realized that the game can be played in a different way. Getting out of the rat race seems possible without putting in 40+ years of work. Let me give you an idea of where I'm at so far.

First off, I think its important to start off with my financial upbringing. I was taught from a very young agethat you want to get a good job with a strong company, work your way up the ladder, save money into your 401K. Extra money gets invested into stocks. Most importantly, avoid occurring debt all cost! ('Good' advice, but advice that leads you to get stuck)

BP has really opened my mind. I'm open to the idea of investing in real estate and am excited to learn about it. Given New York is so expensive, I'm looking into investing out of state. Specifically, Single Family Homes In cheap states with the intention of renting them out to generate cash flow and increased equity in the property. However, there are a few questions that are weighing on my newly-born real estate mind that I hope I can get some thoughts from the community. Investing out of state in real estate has many obstacles that i'm afraid will prevent me from jumping in. Please help get me going.

1. How do people buy out of state? I work and live in New York. I get 2 Weeks of vacation from work. How can I manage to buy a house, have a contractor perform the needed work on it, and rent it to responsible tenants while being in New York for 50 weeks and the place of the rental for only 2 Weeks?
2. Will a Real Estate Agent Work with me even if I'm out of state? How do we go about searching for properties? I'm assuming only the agent has MLS access and I need to rely on them? 
3. How do I go about finding a contractor (Who wont scam me) when I'm so far away? If I did find one, I wouldn't be there for when the work is being done (Or not all of it probably).
4. How do I go about getting the place rented?
5. I'm thinking about putting 20K into my first property. Including the down payment and repairs. I'm looking to spend 85K max. For this price range what advice/strategy do you have to give?
6. Random question, is there a way people go about finding out what areas are good/bad (Crime/Schools)?

Thanks already everyone. I'm looking forward to what is ahead. I really want to press. I think my next step is to start crunching some numbers to get good at finding deals. Practice makes perfect. I'll be sure to keep posting.