Beginner Not Sure Where to Start

30 Replies

Hi everyone!

I'm brand new to the idea of investing and I have been diligently researching the basics thanks to BP!

I live right outside of Washington DC so I plan on investing in properties further away because of the high prices here. At first I thought I wanted to look into vacation rental in Orlando, but now I just feel confused. 

I'm researching different areas such as: Richmond, Virginia, Austin, Texas, Houston, Texas, Raleigh, North Carolina and so on. I'm feeling so overwhelmed.

Once I choose the right place, I want to learn the ins and outs of the market there and any other information I will need. I also want to network with other investors in that area. I'm at a place where I need to stop and ask someone experienced for any advice on how to proceed. 

I would ideally like to invest in a multi-family property for long-term lease. Right now, Richmond, VA sounds like a good choice because it's the closest to where I live now. Any suggestions on how to choose a city for a beginner?

Choose something close, or look to a distant relative or someone you can trust to partner with.  It is hard to get started and do anything without being onsite. Once you are established and have employees you can be less present.  If you have cash you should be able to find a partner much easier.

Hi Jess, 

Welcome to BP. I have an aunt that lives in Woodbridge, not too far from you I believe. 

I would highly discourage you from starting your investing career in markets you aren't familiar with, especially out of state. As a new investor, you need to possess encyclopedic knowledge of your market and that means living and breathing it. This is hard to do especially when its in another state. 

Start small and in your backyard. Then expand your product type and market as you grow. 

Good luck and keep asking questions!

Bennet

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Hey Jess,

Great to see you on BP!

I am in the same boat as you, living in San Diego has a lot of high prices for my budget. So I am looking in areas that are an hour away from me, specifically in places where I have lived. I noticed that prices are dramatically reduced farther away. I am new and don't have a lot of experience but this is what I am doing.

@Bennet Sebastian @Clay Smith Thanks for the advice. Usually, it seems obvious to stay local and because I know the area so well however it's so expensive in the DMV area. I'm looking to just buy and hold and not flip.

When I was looking for my own home, I thought it would be cheaper to get a fixer-upper but even those homes were terribly pricey. Do you have advice on finding investments in an expensive, competitive area?

Hi Jess,

I actually grew up in Springfield VA, not too far from you, so I feel your pain on the local pricing. I now live in Austin, and I wouldn't recommend it for an out of town investor. Five years ago? Sure. Every house was a steal back then, but now you really need to know your stuff to find something that cash flows. I don't know Raleigh and Houston as well, but I suspect they're similar.

I've actually considered buying in Richmond myself, since I know some people there and it has the benefits of a somewhat diversified economy and relative proximity to DC without being so close that it's unaffordable. You'll probably get tired of that commute eventually, but if you don't have high reserves, I'd say that it's by far your best bet. You probably also already have friends in the area, so you can use them for some basic info (although take it with a grain of salt; they're consumers, not investors).

Do you already own where you're currently living? If so, you could always help supplement your income by taking on roommates; that's how I started. If you don't, I'd highly recommend you start with that. renting your own residence while renting out houses to others is entirely backward, in my opinion.

Good luck.

Hi Jess, Welcome to BP! I too am considering outside markets. I would try finding someone to partner with in your area of choice - a relative, a friend or a professional collegue you meet here. Then get more in depth information about the area using citydata.com. This websjte will provide you info about a specific zip code in the areas of interest. Information includes pop demographics, average rental rates, and all kinds of other stuff.

Good luck!

@Jacob Pereira Thanks for the advise. I have friends in the Richmond, Norfolk, and Roanoke areas so they may be good options. I really have a lot to think about. Luckily, when my husband and I bought our home, we budgeted so that we were living below our means. We have been able to save a lot for a down payment so far and we plan to continue that way. We're both in high demand, IT jobs which includes a raise and quarterly bonuses for both. I suppose that's a benefit of living in such an expensive area. 

Originally posted by @Jess Frasier:

Hi everyone!

I'm brand new to the idea of investing and I have been diligently researching the basics thanks to BP!

I live right outside of Washington DC so I plan on investing in properties further away because of the high prices here. At first I thought I wanted to look into vacation rental in Orlando, but now I just feel confused. 

I'm researching different areas such as: Richmond, Virginia, Austin, Texas, Houston, Texas, Raleigh, North Carolina and so on. I'm feeling so overwhelmed.

Once I choose the right place, I want to learn the ins and outs of the market there and any other information I will need. I also want to network with other investors in that area. I'm at a place where I need to stop and ask someone experienced for any advice on how to proceed. 

I would ideally like to invest in a multi-family property for long-term lease. Right now, Richmond, VA sounds like a good choice because it's the closest to where I live now. Any suggestions on how to choose a city for a beginner?

Jess

Start locally , get involved with the local meeting. The folks can tell you what is and what is not working.  Close to home is always best.

Alex

Hi Jess F..   I am in the exact same predicament as you.  I live in Prince George's county and and in the spirit of trying to find a property close to home, I do searches for my county and only yield like, 3 results -- 2 of which usually aren't even MFDs.  So when I expand the search to all MD, most of the results are on the outskirts of Baltimore but many personal friends (and friends of friends) say they've lost a lot of money in B-more investments... 

     To be fair, I did see several duplexes in DC under $500K in SE - Congress Heights, Trinidad and NE (near Bladensburg Road and the MD line). Most look like they need a lot of work but I did see 2 that I would actually analyze.  While there is mass gentrification taking place throughout the City, I honestly don't know where to look.  I personally wouldn't want to purchase and house-hack a duplex in Trinidad and end up stuck there.  

     Jess, along the same lines, I also want a vacation property in FL, particularly Miami or Ft. Lauderdale because I cruise so much.  I figured it'd be good to have a place to stay when I travel that can earn money while I'm away.  

     I too started looking at TX (Houston) because I have a friend there who could be my boots-on-the-ground.  Plus there are exponentially more duplexes in the price range I'm looking to pay.  I don't think having a first rental that far away is a good idea for all of the obvious reasons but...           

I've been quietly doing my due diligence: I joined a local REI group and attended my first meeting this month; I'm reading articles, BP posts and books; listening to the podcasts and joining in on the webinars. The REI group encouraged us toward wholesaling due to the minimal risk and substantial the number of distressed properties in PG and surrounding counties. Wholesaling, for whatever reason, isn't really resonating with me. I'd really rather buy and hold a multi-family until I am more familiar with the process. This will be my first property purchase ever.

       I think I'll look a little harder within an hour or two of home but I hope other successful DMV investors chime in with best next steps.  

Jess, thanks much for posting. Clearly, you're not alone.  

@Tracey Hill Thank you so much for writing! It seems we have a lot in common. It's definitely hard, but it's good to hear from other people in the DMV area. I hope we hear from experienced investors who may be able to weigh in. I was able to locate a meetup in Fairfax, VA and I hope to attend soon. When I get home from work, I will be doing some research about different areas in Southern VA. Perhaps there is better luck down there.

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Originally posted by Jess F.:

@Bennet Sebastian @Clay Smith Thanks for the advice. Usually, it seems obvious to stay local and because I know the area so well however it's so expensive in the DMV area. I'm looking to just buy and hold and not flip.

When I was looking for my own home, I thought it would be cheaper to get a fixer-upper but even those homes were terribly pricey. Do you have advice on finding investments in an expensive, competitive area?

Hi Jess,

Is your market expensive but with opportunities to be profitable? If so, and assuming you know the market well then all you need to do is find a great deal (easy right? :D ) and the money will follow. If its expensive and not profitable then its time to look elsewhere. But still, I would advise you not to venture out too far in the beginning. Maybe go out an hour at most so that you can still get to and from the project every day when you need to in the beginning. 

I'm actually struggling with the same thing right now and as much as I love my area of town its very hot right now for move-up buyers and profitable opportunities for investors like myself are few and far between. So now I'm studying a sub-market about 30 minutes from here that shows signs of potential. I'll analyze it for a few more days and then start making offers/bids next week. If after a few weeks I don't gain any traction then its time to re-focus and try another market. 

Good luck to us both,

Bennet

Jess F.

Welcome. I have a emerging markets across the country you can email me for a copy my BP PM does not work see my profile. Fill in the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 100 past ones to catch up on.

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

Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

To find out about an area go to loopnet search the are get 5 property packages find the 5 pages in each talking about why this is the best area to invest in real estate copy and paste into a word doc you now have 25 pages as to why this area is good these are your talking points.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul

Hi Jess - Welcome to BP. I'm a newbie who lives McLean, VA and can definitely relate to your post.

Initially, I was thinking along the same lines as you, as far as out of state investing. But, being that cash flow is my ultimate goal, I've decided to focus on what I can afford for now and no more than a couple of hours from where I live. For those of us in the DMV area, I think Richmond is as good as gold just to start out. Baltimore, a close second.

I plan to buy/hold turnkey homes in the Richmond area. Focused on cash flowing properties that might just a teeny, tiny bit of cosmetic work just so I can get a few houses under my belt and get a feel for what I'm doing. 

If your goal is cash flow, then out of state investing will cut into that, therefore defeating the purpose. My suggestion is - Start small & local, but dream BIG and branch out once you're an established investor.  

Good luck.

@Tracey Hill   @Jess F. @Pam I.

I'm an investor in Richmond, VA and am looking to buy rentals and do some flipping as well. However, I would be glad to let you know when I have properties that I decide not to hold or rehab and am looking to wholesale to another investor. If interested PM me and let me know what numbers work best for you.