First Time Advice

[Brendan Harnett]

Hi All, Would be grateful for any  advice as someone looking to do their first real estate investment. I'm 39 and live in Philadelphia, PA area - wish I had started earlier in life with multi-years of housing hacking. Now I have a family, mortgage, etc.

Based on what I'm stating below, could you help me answer the following questions?

1. Would you recommend investing in a non local market (long drive distance or requires flight) for my first property? I'm not sure if I should do local given that I'm in an east coast city (Philadelphia, PA). I realize the answer will be (it depends) but if you were a close friend or family member, what would you say? I really want to do it but it just seems super risky honestly when I don't really know what I'm doing at this point.

2. Who should I begin networking with to find my first deal? I heard an agent for real estate investors might be the best person to use. Does BP offer a list of such people?

3. What benchmarks should I be targeting (1% rule for rent and 8-10% CaC return seems difficult in my market - Philadelphia, PA area)

4. What type of property should I consider as a first timer? BP podcast suggests single family or duplex I think.  Would turnkey rental be ok as a first entry? I don't know if I'm ready to commit to finding opportunities to do major rehab/repairs. 

5. Does BP have resources for a financial planner who can advise me on how to think about managing wealth in various asset classes as well as real estate? Like say hey based on how much equity you have in your home perhaps consider a HELOC for specific types of deals, but understand the risk and only do it in these types of scenarios (motivation here is for me to have someone who can advise me on how I can scale in real estate over time).

I've been listening to the BP podcast for some time now.  I'd like to start investing 50-100K, was thinking 50K at first in maybe a 250K-ish home. I realize I might be limited to invest in my local market with that amount of cash. 

[Melissa Justice]

@Brendan Harnett,

Congrats on taking the first step - even asking these questions means you’re further ahead than most. I’ll go point-by-point from my perspective, having worked with a lot of first-time and out-of-state investors.

1. Local vs. Out-of-State for a First Property
If cash flow and long-term scalability are your primary goals, you may have to look outside Philadelphia. Many East Coast markets (especially big metros) have lower returns and higher barriers to entry. That said, it’s completely possible to buy your first property out-of-state if you build the right local team. Plenty of investors start that way. You’ll want:

An investor-friendly agent or property source provider who understands rental comps and ROI.
A property manager who treats your property like a business asset, not just a house.
A reliable contractor/handyman for small and medium repairs.

For a first-timer, I’d avoid “project-heavy” rehabs out of state - stick to turnkey or light cosmetic work so you can learn the ropes without getting overwhelmed.

2. Networking to Find Your First Deal
Yes, an investor-friendly agent or property source provider is key. 

3. Benchmarks to Target
In your market, the 1% rule is rare. In strong cash flow markets, it’s more common. Instead of sticking rigidly to the 1% rule, aim for:

Cash-on-Cash Return: 8–10% or higher
True Net Cash Flow: At least $250/month per door after all expenses (including maintenance and CapEx reserves)
Positive leverage effect: Rents rising faster than expenses over time

4. Property Type for a First-Timer
For most beginners, a single-family rental (SFR) or a small duplex is the easiest to manage and finance. Turnkey rentals are a great entry point - you sacrifice some equity upside but reduce the learning curve and risk. I'd avoid significant rehab until you've owned at least one property for a year or two.

5. Financial Planning Resources
BiggerPockets doesn't provide direct financial planners, but you can find fee-only planners who understand real estate investing. Look for someone who can integrate real estate into your overall portfolio and help you decide on tools like a HELOC, cash-out refinance, or strategic debt.

Markets I’d Suggest Looking Into (based on your budget and goals)
Since $50K would cover ~20–25% down plus closing costs on a $200–250K property, I’d explore:

Akron & Canton, OH – Steady growth, solid rents, strong job market.
Memphis, TN – High rent-to-price ratios, consistent rental demand.
Griffin & Forest Park, GA – Lower entry cost near Atlanta metro, strong rental demand.
Birmingham, AL – Strong rent-to-price ratios, landlord-friendly, and pockets with solid appreciation potential. Make sure to understand the micro-markets within the metro.

Start with one market, connect with local investors/property managers there, and run sample numbers on multiple properties to get a feel for returns.

If I were in your shoes, I’d pick a landlord-friendly market where my money goes further and start with a single-family turnkey that can produce $250–350/month net cash flow. Once you have one under your belt, you can scale faster with the confidence and systems you’ve built.

Always happy to chat more about specific markets, etc.

Best of luck!