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What's the best way to start buying Real Estate?

Co-ops?

Condos?

Small House?

I have been a Realtor for 26 Years, and a Real Estate Investor for 25. The way I started investing/buying was a small Multi-Family. I lived in the Basement apartment, tiny bedroom Living Room, kitchen area.

My bedroom fit a queen size bed. The top of the bed touched a wall, the bottom touched a wall and one side touched the far in wall. My 2 upstairs tenants paid for my mortgage and taxes. My big expense was the heating bill!

After living there for a year I moved to the main floor and rented out the basement. You never know how much you miss the light until it's no longer there. I don't think I would ever move to a dark apartment again! After being in my house for a few years, I re-financed and bought another 2 family. My intention was to do this over and over until I had 10-20 houses, but the Real Estate market changed and I wasn't able to do anything for a few years.

I bought my current single family house in the late 90's. I love it. It is now time to sell one of my multi-family homes. My opinion, having a tenant pay your mortgage for the first few years is a great way to start owning Real Estate.

All the best!

Kevin

Posted by Kevin O'Shea, White Plains, NY Real Estate on 01/16/2009 02:15 PM

Comments (10)

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10 Comments on What's the best way to start buying Real Estate?

JAN

I'm trying to convince my husband to let us by some things that we can rent out. However, he is really nervous about the total economy - typical buyer. I'm hoping after the inaguration and things settle down we can start getting into investing too.

Hi Kevin. Sounds like you did pretty well. Things have changed a little haven't they. Thanks for writing, Ken

I think an awful lot of people don't understand that you need to "start small" particularly in an area like this one which is inherently expensive. This is a prime example of starting where you can and moving up from there. I see a lot of 20-somethings that "want it all" - right now - and quite often the wants get mistaken for "needs" and these needs wants get in their way. During the boom it caused them to stretch too far and now it prevents them from purchasing anything - just when they should be thinking of buying. I actually had one buyer who let having to use a common laundry in the complex get in the way of finding something affordable. Sure, that's what we would all prefer, but is that truly a necessity for a 25 year old?

Now why is it time to sell? Are the multis not pulling their weight? I would think your should hold your rentals until the price slide reverses...renting seems to be on the uptick.

JAN

Stacy-Ann: As a Realtor, you will know when it's the best time to buy, nothing like investing in what you know.

Hi Ken: It is a different market now. RE has always been a cyclical business to a certain extent.

Hi Ruthmarie: It is really funny, I was having a similar discussion yesterday. When did sharing a bedroom with a brother or sister end?

Hi Jeff: Thanks for your insight.

Hi Kevin...One of my nephews did exactly the same thing. He currently owns two two-family homes. He has done extensive renovation on each apartment. He did most of the work himself and did a great job landscaping both properties. All of this while working full-time and having shared custody of his two sons.

I am very proud of him.

Kate

JAN

I'm a firm believer in buying single family homes. Entry-level homes. Because there is always a demand for entry-level homes, even if the market tanks.

Kate: This area of Real Estate is a Gold Mine if you can do the work yourself.

Elizabeth: In our area a single family can't rent and cover the costs. Also if you have a multi-family you only lose a percentage of the rent when you have a vacancy.

If the costs cover it a single family is much easier to deal with. The tenant pays the heat and takes care of more of utilities and property.

All the best for the new year!