Brand New in REI; starting out in Multifamily rental Investment

[Wasim G.]

Hello everyone. This is my first post on BP. I'm just starting out my REI journey. My goal is to generate enough passive income one day to retire. I just got the pro account and also enrolled for MF bootcamp here starting in Feb. Other than that I also just got Chandler's video course because I'm awful at reading books.

I don't want to invest in Cali as there's no cashflow. I'm lookin at other markets. I have the down payment ready to buy a fourplex in most markets. Here to make connections, get recommendations on education, and hopefully find mentors.

[Nathan Gesner]

Quote from @Wasim G.:

Welcome to the BiggerPockets forums!

Dave Meyer has a video and blog post about which markets are projected to be strong in 2023. I recommend you track those down and narrow your focus down to a particular market, then start evaluating properties and watching what happens while you gain the education.

Here's a guide that describes what good cash flow looks like and how to analyze a property.

https://www.biggerpockets.com/...

[Alex Larcheveque]

Welcome @Wasim G.! I know you mentioned you're awful at reading books, but Long Distance Real Estate Investing by David Greene should be pretty useful if you're planning to invest out-of-state. There may be an audiobook version out, not 100% sure. 

Other than that, use the Bigger Pockets calculators for cash flow and make sure the numbers pencil out. Good luck, you got this!

[Wasim G.]

Thanks guys. Looks like I'll be adding the book grind to my journey.

[Robert Reynolds]

Hi Wasim, 

My advice is to not chase cash flow, because appreciation is going to be what builds wealth in the long run. If you are currently renting, my recommendation is to house hack, and rent out the extra rooms to cover most your mortgage. While doing that, keep saving and when you can cashflow by renting out the entire place, buy another. Before you know it you will have multiple cash flowing assets in SoCal that are appreciating way more than a house in Indiana or Ohio or wherever else you are seeing this cash flow. 

Remember, a roof, an AC or anything else basically will cost the same on a $100k house in Indiana as it does on a $1million house in LA. I'd rather have (5) $1million+ homes, than (500) $100k houses. 

[Mitchell Roadruck]

Hey Wasim, 

Welcome to BP! Congratulations on taking your first steps. I just want to defend my home state in response to @Robert Reynolds's post.

Robert, 
I agree with you, appreciation results in building wealth. Buying in markets like SoCal, Denver, Austin, etc will give you that appreciation! That being said, in my humble opinion buying for appreciation may not be the best first investment for most people. Deploying all of your capital in one deal will result in slow growth. Instead I recommend buying for cash flow in areas like IN and the rest of the midwest where your money will go farther and a couple BRRRR's to redeploy that money in a market that appreciates historically at a faster rate. That will result in the investor having a few stable cash flowing property (Midwest) and a long term hold asset that probably wont cash flow very well but appreciates well (SoCal).

[Robert Reynolds]

Quote from @Mitchell Roadruck:

Hey Wasim, 

Welcome to BP! Congratulations on taking your first steps. I just want to defend my home state in response to @Robert Reynolds's post.

Robert, 
I agree with you, appreciation results in building wealth. Buying in markets like SoCal, Denver, Austin, etc will give you that appreciation! That being said, in my humble opinion buying for appreciation may not be the best first investment for most people. Deploying all of your capital in one deal will result in slow growth. Instead I recommend buying for cash flow in areas like IN and the rest of the midwest where your money will go farther and a couple BRRRR's to redeploy that money in a market that appreciates historically at a faster rate. That will result in the investor having a few stable cash flowing property (Midwest) and a long term hold asset that probably wont cash flow very well but appreciates well (SoCal).

I love the response Mitchell and I don't think a young first time investor can go wrong in either scenario but I do believe a house hack in a home town is the best first investment. You can get to know the property as you live in and rent out the spare rooms. You will no longer be paying rent, and instead paying down your mortgage. It's also a lot less riskier in my opinion because you already know the area. 

If I were to recommend buying out of state it would be what Mitchell is saying and buying a solid BRRRR type property.

[Mitchell Roadruck]

Quote from @Robert Reynolds:

Quote from @Mitchell Roadruck:

Hey Wasim, 

Welcome to BP! Congratulations on taking your first steps. I just want to defend my home state in response to @Robert Reynolds's post.

Robert, 
I agree with you, appreciation results in building wealth. Buying in markets like SoCal, Denver, Austin, etc will give you that appreciation! That being said, in my humble opinion buying for appreciation may not be the best first investment for most people. Deploying all of your capital in one deal will result in slow growth. Instead I recommend buying for cash flow in areas like IN and the rest of the midwest where your money will go farther and a couple BRRRR's to redeploy that money in a market that appreciates historically at a faster rate. That will result in the investor having a few stable cash flowing property (Midwest) and a long term hold asset that probably wont cash flow very well but appreciates well (SoCal).

I love the response Mitchell and I don't think a young first time investor can go wrong in either scenario but I do believe a house hack in a home town is the best first investment. You can get to know the property as you live in and rent out the spare rooms. You will no longer be paying rent, and instead paying down your mortgage. It's also a lot less riskier in my opinion because you already know the area. 

If I were to recommend buying out of state it would be what Mitchell is saying and buying a solid BRRRR type property.

 Absolutely. The biggest thing is take action! 

[Justin Rafter]

Welcome @Wasim G.

I am also very new and there is no better way to learn than BP and meetups! Get out there and meet people and learn from their successes and mistakes!

[Kayla Givens]

Hey, @Wasim G.! Welcome to BiggerPockets! You already know this but you are definitely in the right place if you're looking to network, make moves, and learn from other real estate investors. What markets are you considering? 

[Nicholas Coulter]

@Wasim G. Welcome! I would look to attend some local REI meet ups in your area and see if you can connect with local investors who are doing things out of state! Always good to learn from others already doing what you want to do!

[Jay Thomas]

Cash flow sounds really attractive, but if your goal is to build wealth over the long-term, appreciation should be your main focus. House-hacking is an ideal way to get started on your investment journey as it can help cover most of your mortgage expenses while you keep saving up. And before you know it, you could be a real estate mogul in SoCal with multiple cash-flowing assets that are appreciating way more than anywhere else! Keep your eye on the prize and focus on appreciation - you won't regret it.

Good luck! :)

[Sam McCormack]

@Wasim G.

I would recommend the Cincinnati market! Great for cash flow and there are deals to be done here!!