Newbie & long distance

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Newbie & long distance

Radhika S.
New to Real Estate · CA · Member since 2024 · 8 posts · 11 votes

Hi!

I am starting out newbie, have young kids, have been a homemaker, but now want to do more for the family financially while also being available for my family. After reading & researching, I have decided to take the real estate route, read 'Rental Property Investing" and came out with the plan to buy single family homes LTR cash flow. I live in California, but being the market it is, I want to invest outside. I have garnered a 50K to get started, I am having difficulty choosing markets, although I have shortlisted it to be a 'landlord friendly state". It looks so wide and vast, I am overwhelmed and don't know where to start. I have been reading the forums out here but how should I narrow down to that one market?

I also tried biggerpockets/wheretostart, but for some reason the .xls would constantly keep opening skype files. What am I doing wrong here?

What should be my next step to narrow down and research?

I am also beginning to talk to CPAs and attorneys, but not sure What all questions I should have cleared at a minimum, to confidently take the big step.

I may be over thinking, but I think it is also the cautious me who does not want to screw up financially in my desire to help the family financially.

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Travis Boyd
Rental Property Investor · Everett, WA · Member since 2024 · 16 posts · 26 votes
1y

Hi Radhika!  I can 100% relate with you. Over the last three weeks I've read 7 of the real estate books and spent hours listening to biggerpockets podcasts trying to learn as much as a I can and narrow down my focus. I relate with knowing I want to build my real estate portfolio but feeling overwhelmed with how to choose a market (I live in Seattle which is similar to CA with regards to the price to rent ratio challenges), so I wanted to share my current plan. I have done a couple hours of initial research searching for top markets and have an initial list that I'm researching including Detroit, Memphis, and OH (Columbus, Dayton, Cleveland, Cincinnati) to start. I have spoken with an agent/PM in Detroit that somewhat scared me away from the Detroit market (eviction rate is currently 8% down from 20% 5 years ago and such a different environment that I'm familiar with). I also have learned Memphis can be quite spotty (a dangerous block can be just a couple blocks from a good renting location so you really need a boots on the ground agent/team that you can trust).  I'm less overwhelmed the more I talk with people, and everyone has been helpful and happy to chat with me. Now I realize it is going to take a couple months of talking to real estate investors and agents etc to help me slowly dial in my market territory. I am not much closer that I was a couple weeks ago, but the more I talk with people the more confident I get that I will get there, and you will too in time!  It may not be a bad idea to give yourself a few months to network and learn. Also, I've been asking most people I talk with for references and keep getting in contact with more people, all of whom have been happy to chat for a few minutes. It sounds like you've got the ball rolling in the right direction already, so keep up the great work!

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  • Jordan RayBusiness Member
    Real Estate Agent · Memphis, TN · Member since 2023 · 642 posts · 331 votes
    1y
    Quote from @Radhika S.:

    Hi!

    I am starting out newbie, have young kids, have been a homemaker, but now want to do more for the family financially while also being available for my family. After reading & researching, I have decided to take the real estate route, read 'Rental Property Investing" and came out with the plan to buy single family homes LTR cash flow. I live in California, but being the market it is, I want to invest outside. I have garnered a 50K to get started, I am having difficulty choosing markets, although I have shortlisted it to be a 'landlord friendly state". It looks so wide and vast, I am overwhelmed and don't know where to start. I have been reading the forums out here but how should I narrow down to that one market?

    I also tried biggerpockets/wheretostart, but for some reason the .xls would constantly keep opening skype files. What am I doing wrong here?

    What should be my next step to narrow down and research?

    I am also beginning to talk to CPAs and attorneys, but not sure What all questions I should have cleared at a minimum, to confidently take the big step.

    I may be over thinking, but I think it is also the cautious me who does not want to screw up financially in my desire to help the family financially.

    The 1st step would be to slow down and just focus on finding a market. Try using the BiggerPockets "Market finder" and see where that brings you and then just talk with agents in the market you pick and narrow down these options by relying on market local contacts to guide you. Continue to do your research and also ask ChatGPT questions as well as I have been finding Ai to be super useful for research lately. Hope that helps! Goodluck investing!

    btw you can buy at least 2 properties in Memphis TN with $50K using the BRRRR method. Let me know if you would like to chat about this!

    [email protected]662-642-1458
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  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 713 votes
    1y

    @Radhika S.

    Chose a market that will fit your budget but also your lifestyle. There are inconveniences to investing out of state like traveling to see properties, meeting with contractors, checking work, checking the property condition. You can build a team and people do, it takes time, mistakes, and extra money. To reiterate what others have said you'll need a larger reserve fund to invest out of state when something goes wrong. If you can spend the extra time you'd spend managing your out of state team on a side hustle to save up more to buy something closer to CA that you can get to and from in a day, NV or AZ. You'll get a sense of time commitment to OOS investing and saving more for investments. 

    4Reply
  • Wade Wisner
    Member since 2024 · 86 posts · 69 votes
    1y

    Radhika.  Congratulations on wanting to start out in RE investing.  Rental property investing is a great way to begin a a real estate investor, but can have lots of pitfalls.  However, no one will watch out for your investment like you will so choosing, or even having a property manager is a major decision.  I have had varied experiences with property managers.  Having owned many residential and commercial properties I can tell you that having a rental property is like raising kids.  No one is going to do the job that you the parent will do.  Just like raising children, rental properties do best when watched closely.  Drive bys, Stop ins can tell you what is really going on in your property and staying close to home is usually best.  Have a good lease with "teeth" - late fees for late rent, occupancy rules, pet rules and etc. - and do not violate your own lease by being too easy, or very quickly you will not have any lease at all and your tenant(s) will do whatever they want at your expense.  Rental property management is business, not personal so always keep a business relationship with your tenant(s) - no friends or family wanted.  Take care of any reasonable property related issues quickly and expect your tenant(s) to take care of their responsibilities quickly also.  Remember the only thing that the landlord gets from rental property is RENT, so make sure that you get it!!  Also, some places like CA and MD have very tenant "friendly" laws (against the landlord in some cases) so make sure that you know the laws and if possible, have an attorney or service to collect overdue rent and/or eviction as needed.  Be flexible to your tenant's needs, but do not make the mistake of buying their BS.  Good luck.  

    3Reply
  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    Hey Radhika, since you’re interested in long-term rental cash flow from single-family homes, the next step is to narrow down the markets that can give you the cash flow you're looking for. I’d recommend checking the Midwest market.

    Another tip to help narrow down your options is to talk to your lender. It’s important to know how much you can afford. You've mentioned you have $50k, I know lenders that can do 15% down on a single family. Just be sure to also keep a cash reserve for unexpected expenses. Best of luck on your journey and feel free to reach out if you have any questions

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  • Allie McAlister
    Memphis, TN · Member since 2024 · 180 posts · 223 votes
    1y

    Hi, Radhika. 

    I understand your concerns and anxiety about getting started as an OOS investor when trying to choose a good market. There's some great choices, but what it comes down to is what your buying strategy/criteria is. 

    Other than an area that has landlord-friendly laws, what are you looking to see in the market you'll get started in? 

    If you're looking for a lower entry point for your first property, and that's landlord friendly, Memphis might be a good place to look into. I work with newbie ( and seasoned ) CA investors every single day, helping them find some great properties in the Memphis area. 

    Let me know how I can help, and best wishes on your new journey!

    3Reply
  • Radhika S.
    OP
    New to Real Estate · CA · Member since 2024 · 8 posts · 11 votes
    1y
    Quote from @Katie Miller:
    Quote from @Radhika S.:

    Hi!

    I also tried biggerpockets/wheretostart, but for some reason the .xls would constantly keep opening skype files. What am I doing wrong here?

    That is super strange on the xls file! I will DM you the "Where to Start" spreadsheet! you can open it on excel, numbers, or google spreadsheets.


     Thank you Katie, I was able to open the file you sent over the DM

    0Reply
  • Radhika S.
    OP
    New to Real Estate · CA · Member since 2024 · 8 posts · 11 votes
    1y
    Quote from @Wade Wisner:

    Radhika.  Congratulations on wanting to start out in RE investing.  Rental property investing is a great way to begin a a real estate investor, but can have lots of pitfalls.  However, no one will watch out for your investment like you will so choosing, or even having a property manager is a major decision.  I have had varied experiences with property managers.  Having owned many residential and commercial properties I can tell you that having a rental property is like raising kids.  No one is going to do the job that you the parent will do.  Just like raising children, rental properties do best when watched closely.  Drive bys, Stop ins can tell you what is really going on in your property and staying close to home is usually best.  Have a good lease with "teeth" - late fees for late rent, occupancy rules, pet rules and etc. - and do not violate your own lease by being too easy, or very quickly you will not have any lease at all and your tenant(s) will do whatever they want at your expense.  Rental property management is business, not personal so always keep a business relationship with your tenant(s) - no friends or family wanted.  Take care of any reasonable property related issues quickly and expect your tenant(s) to take care of their responsibilities quickly also.  Remember the only thing that the landlord gets from rental property is RENT, so make sure that you get it!!  Also, some places like CA and MD have very tenant "friendly" laws (against the landlord in some cases) so make sure that you know the laws and if possible, have an attorney or service to collect overdue rent and/or eviction as needed.  Be flexible to your tenant's needs, but do not make the mistake of buying their BS.  Good luck.  


     Thank you Wade, I appreciate your response, especially on handling tenants!

    0Reply
  • James WachobBusiness Member
    Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 888 votes
    1y

    Hi @Radhika S.,

    I totally get where you're coming from—diving into real estate can be a bit overwhelming, especially with kids and everything else on your plate. But it’s awesome that you’ve got a plan and are ready to make it happen!

    I’ve lived in Memphis my whole life, and I’ve been helping investors for decades, so I can tell you that this market is one of the best for out-of-state investors. The prices here are affordable, which means your $50K can go a lot further than it would in places like California, and you can still get solid cash flow from rental properties. The big thing about Memphis is that it’s stable. There’s always demand for rental properties, and with the landlord-friendly laws, you don’t have to deal with all the red tape you might find in other markets. That’s huge when you’re investing from out of state, because it means less hassle and more reliable returns.

    Turnkey properties are super popular here because they’re ready to go right away. No worrying about renovations or repairs, so you can start making money quickly. New construction is also a solid option because everything’s brand new, and you’re less likely to run into issues with maintenance early on.

    As for research, I'd focus on the local economy and rental demand. Memphis has a steady, growing economy, and there's always demand for rentals, which makes it a great long-term bet. Also, make sure you're talking to your CPA and attorney about taxes, investment structures (LLC, etc.), and local landlord-tenant laws. Those are the key things you'll want to get squared away.

    You’re definitely on the right track! Just take it one step at a time, and don’t hesitate to reach out if you need more insight into the Memphis market. 

    1Reply
  • Radhika S.
    OP
    New to Real Estate · CA · Member since 2024 · 8 posts · 11 votes
    1y
    Quote from @James Wachob:

    Hi @Radhika S.,

    I totally get where you're coming from—diving into real estate can be a bit overwhelming, especially with kids and everything else on your plate. But it’s awesome that you’ve got a plan and are ready to make it happen!

    I’ve lived in Memphis my whole life, and I’ve been helping investors for decades, so I can tell you that this market is one of the best for out-of-state investors. The prices here are affordable, which means your $50K can go a lot further than it would in places like California, and you can still get solid cash flow from rental properties. The big thing about Memphis is that it’s stable. There’s always demand for rental properties, and with the landlord-friendly laws, you don’t have to deal with all the red tape you might find in other markets. That’s huge when you’re investing from out of state, because it means less hassle and more reliable returns.

    Turnkey properties are super popular here because they’re ready to go right away. No worrying about renovations or repairs, so you can start making money quickly. New construction is also a solid option because everything’s brand new, and you’re less likely to run into issues with maintenance early on.

    As for research, I'd focus on the local economy and rental demand. Memphis has a steady, growing economy, and there's always demand for rentals, which makes it a great long-term bet. Also, make sure you're talking to your CPA and attorney about taxes, investment structures (LLC, etc.), and local landlord-tenant laws. Those are the key things you'll want to get squared away.

    You’re definitely on the right track! Just take it one step at a time, and don’t hesitate to reach out if you need more insight into the Memphis market. 


     Thank you James, for clarifying what areas i need to get cleared from CPA & attorney, it helps!

    0Reply
  • Dean HarrisBusiness Member
    Real Estate Agent · Memphis, TN · Member since 2015 · 1k+ posts · 1k+ votes
    1y

    Hi @Radhika S.

    Memphis, TN has great cash flow properties and Tennessee is a Landlord friendly state. Lots of options work here and I have focused on the BRRRR strategy.

    Best of luck!

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