How should I start real estate investing?

7 Replies

Hi friends,

I’m looking to begin real estate investing in the near future, I want to take the plunge towards the end of the year or next year. My head is swimming trying to figure out the first step. I live in SF, I work for the federal government. I can’t afford to live here and want to relocate. I want to go to DC but only for a raise and would stay 3 years max. When I move from SF, I will make less $ because of COLA (unless I get promoted to higher GS level). With that in mind I’m looking to buy property out of my area. I’ve been thinking about KCMO, Indy, Texas, and Phoenix. My brother is living in Phoenix, so that is a plus. 

I have been thinking that passive income through turn key properties would be my best option right now. What is the best way to build a team? How do I trust them? Where does one find solid recommendations? What is the best way to get loans on these properties since I won’t be living there?

My last question is, why don’t I just invest in Two Harbors that pays a 14% dividend instead of buying properties?

Thanks for your time. 

Risk.

Mortgage reits are some of the riskiest assets out there. Thats why that dividend is that high. It would not be an unusual occurrence to have a mortgage reit cut that dividend by 50% and with that would be a 50% value plunge as well.

@Michael Borovsky find a good Realtor working in one of those markets. Preferably one that is a fellow investor, like myself. This Realtor will be able to recommend good property management, insurance, lenders, and contractors that they have used to help you build your team. But the biggest challenge is narrowing down where you want to invest. Texas has four major markets that are very diverse from each other. I choose to invest in the Dallas/Ft. Worth area because consistent job growth coupled with a diversity of industries providing those jobs make it a strong rental market. 

@Michael Borovsky

I like your thinking!

Phoenix is a great place to invest, and since you have a brother here he can check on your properties while you're away!

I say start with an experienced investor/agent and that person can help you build your team.  

We know every professional/service provider/trade you could possibly need related to real estate!! ;)) 

Cheers to your success!

Getting a local Realtor is important, but don't underestimate the asset of having a brother who knows the area! That could be a real help in understanding the market, having someone who can respond to emergencies, etc.  

@Michael Borovsky

First things first, you got to figure out where you want to live. The first investment you should make should be in your own residence.

I recommend the Phoenix area over the others because you already have family here. That will make the move easier as you'll already have a local "tour guide" at your disposal and someone who can easily integrate you into their own social circle.

Plus the market here has a great long-term outlook, with lots of job and population growth. So it'd be a great place to get a hang of real estate investing and then you could venture out to other markets out of state later on and look for turn-key providers in lower price points.

Also, I would suggest visiting all the potential options in person before making the move. Try before you buy is the name of the game.

Originally posted by @Joe Funari :

@Michael Borovsky find a good Realtor working in one of those markets. Preferably one that is a fellow investor, like myself. This Realtor will be able to recommend good property management, insurance, lenders, and contractors that they have used to help you build your team. But the biggest challenge is narrowing down where you want to invest. Texas has four major markets that are very diverse from each other. I choose to invest in the Dallas/Ft. Worth area because consistent job growth coupled with a diversity of industries providing those jobs make it a strong rental market. 

Hi Joe, wouldn't a realtor/investor keep the best deals for themselves? What are your thoughts on investing in the areas just outside of DFW? Most of what I've read in BP is that DFW deals are hard to find now. Are you seeing different?

 

@John Blackrock there are plenty of good deals in and around the Dallas/Ft. Worth area. Just because a few areas are priced too high doesn’t mean we can’t find the deals. With regards to keeping deals I find I only rehab one property at a time. So there are plenty of deals that I find for my fellow investor clients. I always give them first right of refusal. I want repeat clients. So giving them priority on the deals I come across is a sound business decision.

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