This story initially appeared on Enterprise Insider.
Julia Lemberskiy has at all times been captivated by dwelling design.
As a child, “I’d by no means watch any cleaning soap operas. I’d simply binge renovation exhibits,” the 30-year-old tech employee, whose profession has consisted of founding start-ups and heading Uber Eats Russia, advised Insider.
At present, she’s the pinnacle of progress at Double, a start-up that connects executives with part-time assistants. Outdoors of her day job, she nonetheless makes time for her unique ardour: “As a lot as different individuals are scrolling TikTok I am spending hours a day on Zillow.”
It provides her an edge as an actual property investor.
“After binging so many renovation exhibits, I’ve a extremely good imaginative and prescient for what a property may appear to be,” mentioned Lemberskiy, who grew up in Europe, moved to New York Metropolis in 2018, and at the moment owns three funding properties within the States. “I tour a spot and I instantly see which wall I’d knock down. That is actually helped as a result of I am not competing with patrons who do not have that type of imaginative and prescient.”
Her general investing technique is to purchase “undervalued properties” in “undervalued areas,” which she finds by accepted growth tasks locally. If the city or metropolis is investing thousands and thousands of {dollars} into enhancing the realm, that sometimes indicators there’s upside potential.
She additionally would like to spend her money on a bunch of cheaper, fixer-uppers that she may add worth to relatively than placing all of her cash into one or two nicer, costlier properties.
“It feels just like the extra we’re shopping for, the cheaper we’re going,” she mentioned, referring to her and her husband, who at the moment hire in Midtown Manhattan. “Proper now we’re a bunch of properties within the $150,000 vary.”
The way in which she sees it, “you’ll be able to’t actually go flawed in case you purchase one thing for $150,000 and it is a livable home. It is most likely not going to go down in worth.” Whereas, “shopping for within the $1 million to $1.5 million vary would make me very nervous, having that a lot cash sitting in a single property.”
Plus, utilizing her capital to accumulate a handful of properties has allowed her to “mess around in several areas and get a really feel for several types of investments — multi-families versus single-family — to determine with time what the long-term plan goes to be.”
Lemberskiy owns six models throughout three properties and rents 5 of her models on Airbnb. Courtesy of Julia Lemberskiy
Her technique has developed over time. When she first determined to purchase property, she figured she’d personal the place she lived — in New York Metropolis — however a few Zillow searches “ruined my urge for food for getting one thing in New York for fairly some time,” she mentioned.
For starters, the acquisition costs in New York Metropolis are astronomical. Manhattan, New York is the costliest housing market within the US, and Brooklyn and Queens, two of the opposite 5 boroughs that make up New York Metropolis, each cracked the highest 15 priciest markets.
“Once we seemed right here all we may afford was slightly studio as a result of even an honest studio is $400,000 to $500,000,” mentioned Lemberskiy. “It is loopy. However what’s even crazier is the upkeep charge. You are fortunate to seek out one thing underneath $2,000 a month.”
It is also a hyper-competitive market, she added: “You just about must go over asking.” On the few properties she and her husband have made gives on within the metropolis, “we obtained outbid each time.”
Renting in NYC, shopping for in additional inexpensive markets, and producing as much as $20,000 a month in Airbnb income
In the end, Lemberskiy could not justify shopping for something in New York Metropolis, she mentioned: “Fascinated about it as an investor, costs are already so excessive. How a lot greater can it get?”
She and her husband determined to proceed renting. It is attainable to seek out good offers in the priciest rental market in America, mentioned Lemberskiy, who pays lower than $2,000 a month for a studio in Midtown Manhattan: “There are typically actually good offers in case you spend the time. A few of it requires negotiation.”
Whereas shopping for property in New York Metropolis was off the desk, shopping for property basically was not, particularly as soon as Lemberskiy determined to calm down within the States.
“As soon as I obtained married and determined to remain within the US, I knew I wished to spend money on one thing,” she mentioned. That was in 2020, proper after the pandemic hit. The massive query was the place to purchase. “Being new to the US, I had no thought even the place to begin.”
Lemberskiy and her husband closed on their first dwelling through the early days of the pandemic. Courtesy of Julia Lemberskiy
She determined to purchase a house in an space the place she may see herself residing. Within the early pandemic days, that was upstate New York.
“I felt cooped up in Manhattan so each probability I obtained I’d get on the Metro-North at Grand Central, exit a brand new station, and spend a day discovering,” she remembered. “I actually obtained a really feel for that total upstate New York space.”
She discovered an actual property agent and began touring properties.
“This was early Covid when everybody was fleeing New York, working remotely, and the rates of interest have been tremendous low, so it was extraordinarily aggressive,” mentioned Lemberskiy. “Nothing was staying available on the market for longer than just a few days.”
The house she and her husband ultimately purchased was a 3-bedroom on a lake in Walden, which is about 70 miles north of New York Metropolis. Within the 2.5 days that it was available on the market, “it had 54 showings and 14 gives, together with many money gives,” she mentioned. “So our probabilities have been very slim. We ended up eradicating each contingency out of the contract, going above asking, and we wrote an extended, tear-jerking letter to the house owners. To our shock, we obtained the property.”
They closed in March 2021 for $285,000 with the intention of utilizing it as a weekend getaway dwelling, however “this dwelling was an entire catastrophe,” recalled Lemberskiy, who ended up residing there virtually full-time for six months doing renovations to make it “livable,” she mentioned. “It was powerful and costly and after some time I used to be fed up with the home and did not wish to be there anymore.”
That is what led to the concept of solely staying in it sometimes and renting it out on Airbnb, which she’s been doing since 2022.
She acquired two extra investment-specific properties in 2021 and 2022: a $220,000 single-family dwelling in West Palm Seashore, Florida and a $185,000 multi-family property in Albany, New York.
She chosen these markets equally to how she selected upstate New York, “from private motivation,” she defined. “Even when the enterprise aspect of issues does not work out, it is one thing the place I can see myself and my household.”
Florida first got here on her radar whereas rewatching “The Sopranos” along with her husband, she mentioned: “There was a scene the place the uncle talks about going to Boca and we have been like, ‘What’s Boca?’ Just a few weeks later, I discovered an affordable flight, obtained an Airbnb, and fell in love with that entire space an hour exterior of Miami.”
She closed on the seaside home in September 2021. It was already occupied with a tenant and remained a long-term rental till January 2023, when she first began itemizing it on Airbnb.
As for Albany, that deal happened after she and her husband found the capital metropolis on a highway journey celebrating their anniversary.
“We spent a while there and went to some pretty eating places and bars,” she recalled. “I began Zillow and was pleasantly shocked about the associated fee for such a pleasant metropolis.”
Lemberskiy and her husband obtained married in 2020. Courtesy of Julia Lemberskiy
In April 2022, she closed on a four-unit property in Albany. Three of the models are residential, which she rents out on Airbnb, whereas one is industrial, which she’s become extra of an operational area.
Between the Walden lake dwelling, the seaside dwelling in Florida, and the multi-family in Albany, Lemberskiy operates 5 Airbnb areas that, in March 2023, introduced in $19,828 in income, in keeping with a screenshot of her Airbnb dashboard considered by Insider. Every month in 2023 to date, her models have introduced in over $10,000 in gross earnings.
What began as a quest to purchase a house in New York Metropolis has developed right into a profitable short-term rental enterprise that has created monetary freedom for Lemberskiy and her husband.
“I’ve lots of peace of thoughts now,” she mentioned. “Worst case: each me and my husband lose our jobs. We are able to go dwell on the lake home and have the opposite two properties cowl all bills. Having that degree of economic independence makes me much less desirous to undergo the entire establishing one other short-term rental once more.”
In any case, shopping for and renting actual property just isn’t for the faint of coronary heart.
“There’s been lots of tears,” she mentioned. The Albany buy was particularly tough when making an attempt to safe a mortgage and “virtually turned me off from actual property for good. It is advisable to be very stress-resistant to do any of this, in addition to very detail-oriented as a result of there’s simply a lot paperwork.”
That mentioned, she’s nonetheless searching for different “undervalued areas” to develop her portfolio in. She’s trying into areas like Bridgeport, Connecticut, Schenectady, New York, and even overseas in Madeira, Portugal.
Her prime recommendation to rookie actual property buyers is to purchase in a spot “the place you wish to be your self. In the event you can see your self there it is seemingly that different individuals can as nicely.”
