Busy single mom with 50K to invest- where?

Question

Busy Single mom from Boston. Have $50K cash in hand to invest, and due to my current life requirements was thinking MF buy and hold with the goal of build a retirement portfolio (I can invest 30-50K/quarter so this will be the first one). Boston is priced way too high (50K at 25% will only allow for a 200K property which means almost nothing in MA- maybe I can find something in Rhode Island). Investing out of state concerns me due to the distance/remote management and my lack of experience.

What would you do?

Can you recommend a management company and a locale where I can make this happen?

I'm spending every free second studying all I can, but I am struggling with the above.

Ellie Tamari

What would you do?

Can you recommend a management company and a locale where I can make this happen?

I'm spending every free second studying all I can, but I am struggling with the above.

Ellie Tamari

Paul Timmins · Answer

Yael T.

Certainly My BP PM does not work EMAIL me to connect check my profile.

Paul

Paul Timmins · Answer

Yael T.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com There is an excellent one in Warwick say Hi to my buddies Craig and Don. You can also find ones in Columbus and network via phone with club officials and vendors before visiting.

Go to IREM.org search for ARM certified property managers. Call 5 ask them what they see expenses running per category per unit. What do they see them selling for per unit, what is the market occupancy rate. What are the market rents? Ask them if they know anything coming up for sale. Great way to pick up some good info and possibly a deal.

You can also search NARPM.org for the RMP (Residential Management Professional) and MPM (Master Property Manager) certified.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it. Providence is a good market for this.

To find out about the Columbus market in addition to the local REIA's go to loopnet search the area pull 5 property packages find the 5 pages in each talking about why Columbus is the best place for real estate copy and paste them into a word doc. 15 Minutes you have 25 pages of info

Paul

Ellie T. · Answer

@Paul Timmins that is really helpful.   Thank you.  Would it be ok if I reached out to you directly?

Ellie T. · Answer

Thanks Patrick.  I totally agree.  I am not counting on appreciation at all, but I also don't want to find myself with a loan that's bigger than the property can sell for in case of a downturn.

I travel a lot for work to Columbus.  I thought that market might make more sense.

Anyway I'm open to anything.  If I can find a property that makes sense, there's a good PM, and I can get there every now and then, it will work for me.

Patrick Liska · Answer

I always invest in cash flow, never on the hopes that property will appreciate, you never know what the real estate market will do to home values. If you Buy and Hold, as long as they cash flow for you and you can make some good money, why does it matter if they are in MA or not? as a matter of fact, if people can afford to rent there, chances are they will take care of your property more than tenants in a lower class of housing. I understand your thinking of risk mitigation and is a good plan, but you can always have 2 or 3 properties not rented too, then what ? ( not trying to scare you ) that is also why you factor in vacancy in your numbers, to have that reserve just in case you do not have a tenant. if the rental market is hot in MA and that's what you are looking to do, then there is nothing wrong with investing there, do not get caught up on appreciation of property ( it's great if it does) but focus on cash flow.

ADVICE: the money figured in your calculations for vacancy, CAPEX, and maintenance, should always be put aside in an account for what they are figured for, treat the properties as a business, and that's your backup for emergencies instead of going into dept more for a loan to do work, etc. because the money was spent.

Always have reserves for emergencies, a lot of investors get into trouble with that because they spend the money they get and do not have it when the time comes.

Ellie T. · Answer

Thanks everyone.

Out of state pros/cons-  The reason I was thinking of picking up several properties out of state was because of risk mitigation.  The more units I have, the less risk it is when there's vacancies or MA market downturn.  Also, with my sense the Massachusetts being priced too high, it may be possible to find 2% (or close to it) deals in other areas.  The cons of remote management seem lower than the cons of a market that may have peeked or fewer units.

Does that line of thinking make sense?

Fred Grant · Answer

Costs vary by town but you will certainly be able to get Buy and Hold MF buildings in Rhode Island.

My company has buy and hold properties in Woonsocket, RI and there are currently a number of 3 units x 3 bed units for sale for under 200k in town. I am sure others can comment on other towns.

If this looks like a town you would be interested in, I can send you the name of a local property manager.

Patrick Liska · Answer

Ellie,

I have rentals out of state and have a PM manage them with no problems, my question to you is, with that much money coming to you per quarter, why not wait another quarter or two and put a down payment on a good cash flowing property by you ?  just a suggestion, there is also no harm in spreading the word that you are looking to purchase an investment property, people may know of someone thinking of selling, and you may pick up a good deal.