Certainly! Here’s a more polished version of your message:
Hello BiggerPockets community,
A close friend has been encouraging me to get into real estate investing for years. My wife and I recently met with them to seek advice and guidance, which ultimately led us to BiggerPockets. Since then, we have been dedicating our time to learning as much as possible—reading extensively, analyzing potential deals, and listening to BiggerPockets podcasts.
After careful consideration, we decided to sell our current home and rent instead, allowing us greater flexibility as we begin our real estate investment journey. The sale of our home will provide us with approximately $150,000 to allocate toward investments.
At this stage, we feel most comfortable focusing on long-term rentals. However, due to high property costs in our local market, we have been exploring opportunities in more affordable states, including Texas, Pennsylvania, Michigan, and Ohio. Since we will be investing remotely, we plan to work with a property management company to oversee day-to-day operations.
Does this sound like a solid strategy for a first investment property? We would appreciate any insights or advice from those with experience in long-distance investing.
Certainly! Here’s a more polished version of your message:
Hello BiggerPockets community,
A close friend has been encouraging me to get into real estate investing for years. My wife and I recently met with them to seek advice and guidance, which ultimately led us to BiggerPockets. Since then, we have been dedicating our time to learning as much as possible—reading extensively, analyzing potential deals, and listening to BiggerPockets podcasts.
After careful consideration, we decided to sell our current home and rent instead, allowing us greater flexibility as we begin our real estate investment journey. The sale of our home will provide us with approximately $150,000 to allocate toward investments.
At this stage, we feel most comfortable focusing on long-term rentals. However, due to high property costs in our local market, we have been exploring opportunities in more affordable states, including Texas, Pennsylvania, Michigan, and Ohio. Since we will be investing remotely, we plan to work with a property management company to oversee day-to-day operations.
Does this sound like a solid strategy for a first investment property? We would appreciate any insights or advice from those with experience in long-distance investing.
Thank you!
OC California is very expensive so investing out of state can be a good option. In Ohio you can find a lot of single family in the $100-200k range or 2-4 units in the $150-400k range that do pretty well cash flow. You basically have high growth and low cash flow Columbus OR decent growth and solid cash flow of Cleveland, Dayton, and Cincinnati.
If you want very stable and low headaches, B class Columbus is great if you can stomach 0 to negative cash flow. If you want higher growth then Cleveland and Dayton type markets with $100-150k prices may be better suited.
I would encourage BRRRRs after your 1-2nd so you can recycle your money.
Lender · TX · Member since 2024 · 308 posts · 197 votes
1y
Your strategy sounds solid! Selling your home to free up capital and focusing on long-term rentals in more affordable markets is a smart approach, especially with a property management company in place. Many investors successfully build portfolios remotely, but thorough market research and assembling a strong local team (agent, lender, contractor, PM) are key. Have you considered starting with a market that has strong rental demand and landlord-friendly laws? Texas and Ohio, for example, can be great options.
I am working on the team as we speak. I have some close friends that are relators, they are getting me a list of people to talk to. As for the area, Yes. My targets from my basic initial research is Texas, Michigan, Pennsylvania and Ohio.
Too bad you can't buy something owner-occupied, put 5% down with the best interest rate, live in it for 12 months (and fix it up), rent it out and repeat the cycle.
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.
Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.
If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.
If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?
Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?
So, when investing in areas they don’t really know, investors should research the different property Class submarkets.
Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:
Class A Properties: Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation. Vacancy Est: Historically 10%, 5% the more recent norm. Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.
Class B Properties: Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation. Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support. Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years
Class CProperties: Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts. Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages. Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.
Class DProperties: Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages. Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
The City of Detroit has 183 Neighborhoods we’ve analyzed.
DM us if you’d like to discuss this logical approach in greater detail!
Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
1y
@Jason Weidmann The strategy seems solid. I would just narrow down the markets vs trying to look in 4 markets at once and learn each one it will just be too much info. If you look in Ohio I would check out Columbus and Cleveland. You can find something in both of those markets in your price range
Certainly! Here’s a more polished version of your message:
Hello BiggerPockets community,
A close friend has been encouraging me to get into real estate investing for years. My wife and I recently met with them to seek advice and guidance, which ultimately led us to BiggerPockets. Since then, we have been dedicating our time to learning as much as possible—reading extensively, analyzing potential deals, and listening to BiggerPockets podcasts.
After careful consideration, we decided to sell our current home and rent instead, allowing us greater flexibility as we begin our real estate investment journey. The sale of our home will provide us with approximately $150,000 to allocate toward investments.
At this stage, we feel most comfortable focusing on long-term rentals. However, due to high property costs in our local market, we have been exploring opportunities in more affordable states, including Texas, Pennsylvania, Michigan, and Ohio. Since we will be investing remotely, we plan to work with a property management company to oversee day-to-day operations.
Does this sound like a solid strategy for a first investment property? We would appreciate any insights or advice from those with experience in long-distance investing.
Thank you!
Hi Jason! Absolutely solid strategy! I do always recommend going with a property management company because I'm sure you definitely do not want to take 2AM calls from tenants about clogged toilets! With $150k cash, if you look at Columbus Ohio, you can easily buy 3-4 positive cash flowing rentals here. From what I am hearing so far, you may need to look at investing in a cheaper real estate market that will still positive cash flow. I do suggest Columbus Ohio! The macroeconomics are on fire here with population growth, job growth, and companies developing and building here. There is Intel headquarters, Amazon, FB, Honda, Amazon, Nationwide, and recently Anduril is adding another 4k jobs to Columbus! You can still find positive cash flow and deals that do hit the 1% rule here! Plus, you get AMAZING appreciation potential here due to how fast the city is growing. Lastly, there's very landlord friendly laws here! Happy to connect and answer any questions you have!
Certainly! Here’s a more polished version of your message:
Hello BiggerPockets community,
A close friend has been encouraging me to get into real estate investing for years. My wife and I recently met with them to seek advice and guidance, which ultimately led us to BiggerPockets. Since then, we have been dedicating our time to learning as much as possible—reading extensively, analyzing potential deals, and listening to BiggerPockets podcasts.
After careful consideration, we decided to sell our current home and rent instead, allowing us greater flexibility as we begin our real estate investment journey. The sale of our home will provide us with approximately $150,000 to allocate toward investments.
At this stage, we feel most comfortable focusing on long-term rentals. However, due to high property costs in our local market, we have been exploring opportunities in more affordable states, including Texas, Pennsylvania, Michigan, and Ohio. Since we will be investing remotely, we plan to work with a property management company to oversee day-to-day operations.
Does this sound like a solid strategy for a first investment property? We would appreciate any insights or advice from those with experience in long-distance investing.
Thank you!
OC California is very expensive so investing out of state can be a good option. In Ohio you can find a lot of single family in the $100-200k range or 2-4 units in the $150-400k range that do pretty well cash flow. You basically have high growth and low cash flow Columbus OR decent growth and solid cash flow of Cleveland, Dayton, and Cincinnati.
If you want very stable and low headaches, B class Columbus is great if you can stomach 0 to negative cash flow. If you want higher growth then Cleveland and Dayton type markets with $100-150k prices may be better suited.
I would encourage BRRRRs after your 1-2nd so you can recycle your money.
Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
1y
Hey jason, a lot of investors based in markets like California and New York are choosing to purchase their investments OOS in the Midwest because of the affordability and numbers making more sense.
Prices in Columbus are still low enough to find 1% rule deals and there's a ton of appreciation happening in this market as well. I actually moved from Florida to Columbus for the real estate. I saw how fast the city was growing and decided to make the jump.
@Drew Sygit there has been some really good advice so far. Luckily I am not easily sold on any ideas without some data to back the ideas. Overall, everyone has been nothing short of friendly and helpful.
1) you pick a market that you can go to in person and build a team first, and
2) you recognize that RE is a long-term investment, and you may have to wait 5-10 years, or longer, before seeing ANY return. if you want immediate returns, put that money in a HYSA. any pro forma that shows you 'cash flow' on day 1 or in month 1 or even year 1 is a joke.
here's the bottom line. rates are high, prices are high, good PMs and contractors are booked up and busy, and it's very tough to find good deals. if you buy a random property on Zillow and turn it over to people you have never met, you will very likely lose money, get frustrated, and set yourself back.
if you're serious i'd pick a market and plan on making several trips there. network, meet people, go to meetups, take people out for coffee, and walk as many properties as you can. if that doesn't sound worth it to you - then we're back to that HYSA. or investing in CA.
finally - here's some more context on how challenging things can be.
That’s a solid strategy, and selling your home to unlock capital gives you the flexibility to invest where the numbers work best! With $150K, you’re in a strong position to acquire multiple properties, especially in affordable rental markets like Texas, Pennsylvania, Michigan, and Ohio. Just make sure to focus on market selection, financing options, and building a solid team—especially a reliable property manager. Remote investing can work well with the right systems in place! What price range and cash flow expectations do you have for your first property? DM me, and I’ll point you in the right direction!
Memphis, TN · Member since 2023 · 100 posts · 24 votes
1y
Hi Jason, this is a great strategy for building a diverse portfolio. Texas is definitely a strong market, but keep in mind that high property taxes can eat into your cash flow. Its real strength lies in appreciation. If you’d like a little more passive income with your investments, focus on areas with below-median home prices, diverse and resiliant local economies, and high rental demand. Happy to help—feel free to schedule a call with me through the link in my bio!
Rental Property Investor · Philadelphia, PA · Member since 2015 · 480 posts · 362 votes
1y
There is a lot you need to learn in order to make this strategy work and a lot of ways you can potentially stumble. With the limited resources you have, you want the first investment to not only be a learning experience but to succeed. Keep in mind that experienced investors have had bad experiences with some of their investments and no one bats 100%. So rather than overemphasizing WHICH market to chose, emphasize finding the right mentor/coach/team because it is possible to fail in a good investment market when you do not know what you are doing and to succeed in a more challenging market when you do know what you are doing. Try to find experienced, straightshooters willing to do some coaching in the markets you like.
