Evansville. Where do I start?

Question

Hello Evansville Investors. I am located in San Diego and needing guidance for an out of state investor. I am eager to start investing yesterday. I have saved up $25k. I have no idea where to go from here. Reasons I'm interested in Evansville is I suppose comfort. I attended school at USI and being out of state some familiarity would be nice.

Should I partner? Where do I find one?Should I buy one of those small homes around 5-600 sqft and BRRRR

I also do not have conventional financing as an option until 2020 I've been told a few times because my income is primarily based on commissions and need 2 tax returns from my current income source.

TIA

Solomon Ficklin · Answer

I would focus on properties near USI campus if you can score them.  I have multiple friends that attend college there, live in the area, and are paying overpriced rent.  I've also been to some of the parties they throw so I'd be sure to adjust my capex up to at least 10%.  If you don't have anyone and need someone cheap to run and take a ton of photos (probably off an iPhone) of a property for a quick analysis I'm sure they'd be willing.

Jonathan Hoyt · Answer

@Tinley Jones

Contact me. I’m an investor in Evansville and could give you a very valuable contact in Evansville. He is super knowledgeable and well connected.

Dan H. · Answer

I agree with the sentiment of @Terrell Garren but will add that doing the initial BRRRR local is challenging, doing the first one OOS is likely to be a failure.

The cash flow in San Diego over a buy n hold holding period is likely to exceed the markets you are looking at but the cost of entry is prohibitive.  However, local RE opens up the house hack possibility.  The house hack possibility provides a means for a high LTV FHA loan.  $25K could go far at 95% LTV if you get the closing costs included in the loan.  $25K would permit a $500K purchase but it would leave you without any reserves (not a good idea).  So I suggest you either save more or spend less than $500K.  Is house hacking an option for you?

I view the low appreciation markets as challenging for newbie OOS investors.  However, I also realize the challenges of the San Diego market for newbie investors.

Good luck

Terrell Garren · Answer

I can only imagine how hard you worked to save that $25K.  I admire your desire and ambition to build wealth.

I've done 20 SFH buy/repair/hold/self manage over the past 10 years.  I've made my share of mistakes, but thanks to lucky timing, hard work and a great local team it's been both fun and profitable.  I'm not afraid of acceptable risk but I am afraid of out of state SFH investing.  There are smart, capable people that make it work; however, I've bought 5 or so from OOS investors that could not and lost money.

I guess what I'm saying is be careful.  Are there other local options E.g. house hack, rent out a room, partnership, etc that allow you to be on the ground to check on your property, vet trade workers, develop relationships, vet tenants, etc.

I wish you the best, Terrell

Paul Schu · Answer

@Solomon Ficklin good on the student housing opportunities. One thing I have not gotten into but I know this can be something to get into.

Paul Schu · Answer

@Tinley Jones have you considered other markets? I will PM you so this thread does not get a mile long.

Tinley Jones · Answer

@Paul Schu I'm still actively looking. I'll get my first property before too long. So far the REITs are nice to have on the side. I'll see how it goes in the future if the ROI continues I think I'll keep investing for a bit of diversity.

Paul Schu · Answer

@Tinley Jones well keep at it you will fond something. Have you considered other areas? I thought about the REIT stuff and looked at fundrise and the Grant Cardone stuff but I thought I would be better off having more control over my money. How have the REITs worked out for you so far?

Tinley Jones · Answer

@Paul Schu no I haven't. I've made 2 offers on 2 different properties that didn't work out. Have started to invest some of my money towards REITs like fundrise and another site. Owning property is still the goal. It is just hard not having put a team together OOS so far. Still working though.

Paul Schu · Answer

@Tinley Jones have you made any progress on your investment in Evansville?

Evansville. Where do I start?

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