071: Buying Rentals and Flipping Houses in New York with Jeremiah Dalton

On this episode of the InvestFourMore Real Estate Podcast I talk to Jeremiah Dalton, who is an attorney in New York. Jeremiah has a good job as an attorney, but one of his passions is real estate. Being in New York can make it very hard to invest in real estate, since prices are so high. Jeremiah has bought a rental in Pittsburgh, tried to flip in Buffalo, and has a flip right now in Long Island. Jeremiah is also part of one of my coaching programs and it has been a blast seeing his progress and success in real estate. We talk about how Jeremiah became an attorney, how he ended up with another rental in New Jersey, how he is flipping houses, and much more on the show.

Does Jeremiah like being an attorney?

Jeremiah thought about being a doctor or an attorney. He decided to go the attorney route, and has a good job, but admits being an attorney is not what he thought it would be. It is not quite as exciting as he hoped, and his commute leaves him little extra time for his family or real estate. Eventually Jeremiah would like to be a full-time real estate investor flipping houses and building his passive income with rentals.

How did Jeremiah end up with his first rental property?

Jeremiah bought a condo with his wife in New Jersey, because that was one of the few places close to New York he could afford at the time. It was a small studio unit, that he ended up converting into a one bedroom condo. After a few years, he and his wife moved to Long Island, but he kept the condo as a rental. Jeremiah admits he does not make a lot of cash flow on the rental property, but being close to New York he thinks there is a lot of potential appreciation with the property. We talk about how his appreciation play may work and why he feels safe with little cash flow, since he is in a good financial position otherwise.

How did Jeremiah’s experience with a turn-key rental property work in Pittsburgh?

Jeremiah found a company in Pittsburgh to help him buy and renovate a rental property. He liked Pittsburgh because of the growing economy and cheap prices. He bought a property for under $50,000, rehabbed it, and rented it for $650 a month. He was also able to refinance the property and get most of his cash out. The experience did not go exactly as planned since he hoped the home would appraise for more than it did, but it was a great learning experience for him. He also has a great story about how the neighbor was shot in the head and scared away his first tenants!

How did Jeremiah end up buying his first flip?

Jeremiah has been wanting to flip houses for quite some time. He signed up for my coaching program to help him with rentals and to figure out the best way to flip a house. Jeremiah is in New York which makes it very hard to find affordable houses that can be flipped. He first tried to work in Buffalo because he had some contacts in the area and prices were very cheap. After working with real estate agents, contractors, and making offers on multiple houses he became frustrated with the town. It was tough to find houses with enough room to make money when relying on agents to be your eyes and ears. Eventually Jeremiah found a property to flip that was in his own area in New York and he is currently working on it now. The house Jeremiah bought was a REO property that should have $30,000 to $50,000 in profit potential.

How did Jeremiah fund his first flip?

Jeremiah used a local bank to refinance his rental property in Pittsburgh, but he had a tough time finding a bank or hard money lender to finance his flip. The options he did find were very expensive since he had no experience. Jeremiah had worked with his father in the past on large commercial projects, and knew his dad had equity in his home, but was hesitant to ask him for money. Eventually Jeremiah realized if he borrowed money from his father it would help out his father since he would earn a good interest rate on his money and it would help out Jeremiah as well. They used Jeremiah’s income and his father’s equity to get a line of credit that Jeremiah could use to flip houses.

What are Jeremiah’s plans for the future?

Jeremiah loves to flip houses and plans to build his business bigger and bigger. He is working on finding more deals through real estate agents and wholesalers in the area. He is also looking at flipping in different markets as well. He wants to use the money he makes flipping to buy more rentals so that he can eventually get out of the corporate world.