I am very new to this site and the real estate world. I graduated college a year ago, and I have started saving some money, and I am considering using real estate as an on-the-side investment opportunity. However, I am in a unique situation where I will be rotating every 18-24 months to a new city for the next 5-6 years, and currently live in South Baltimore. This leads me to the following questions:
Is there a recommended type of real estate investing for someone moving around? Buy-and-hold seems like the route I would go, because while out-of-state I could use a property manager.
Is it possible to use the same "team" (attorney, CPA, etc.) across state lines?
What additional risks are associated with out-of-state investing, and how long must you live in a multi-family unit to be considered "owner-occupied"?
Thank you for reading this, and I look forward to becoming more engaged with this site!
@Zach Holmes yes, buy & hold would be the easiest to manage while moving around.
Maybe pick one or two strong lateral markets, like the mid-west [not volatile markets like Vegas, Phx, etc] and just sticking to those areas the entire time you are moving around?
I would suggest using the same CPA [a good one is hard to find like all professionals] and use a state specific attorney and then a city specific property manager.
I believe most government agencies [HUD, HomePath, etc] "require" at least living in the property for one year to qualify as owner occupied. Of course, how you actually handle this is up to you...
Thank you @Shawn Holsapple . Most of my potential locations are east coast and Midwest based, so this would make sense for me.
@Zach Holmes I am a big buy and hold fan. However managing from afar will increase your risk and possibly your costs. The good news is since you won't be buying from afar only managing from afar you can learn your market where you are buying while living there. This could allow you to take advantage of some of the best opportunities in many markets.
Also consider wholeslaing or rehab and flip. With those strategies you are not tied to any market after you leave.
For whatever it is worth from a relatively new investor with seven doors in three buildings it would be very hard or a zero profit scenario if you only relied on property management companies from afar. I have a property management company but plenty of situations arise which need intervention for smaller properties. I am in the 2-4 unit arena may be different for 12+ units but smaller than that and I find I could not be profitable from afar with by and hold. May be with buildings 20 years or younger but questionable. Welcome others thoughts and experiences on this as well.
You could also put your money in a RE fund or provide money to active investors in whatever geography you inhabit. I personally would not shoot to have properties in several different, geographically separate markets. Too hard to manage (even with a property manager) and I'd be worried about an exit strategy with markets that I didn't live in and may be unfamiliar with.
Best of luck
If you're just getting started, you may want to speak with a financial adviser. Owning property should be just one part of your financial investment portfolio, especially if you're doing something else as a primary career.
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