Real Estate Investing for the Unsettled
New to Real Estate · Sisters, OR · Member since 2020 · 4 posts · 2 votes
Hi Everyone,
My name is Jake Derksen and I recently graduated with a master's degree in environmental science from Oregon State University and the job hunt has been taking longer than anticipated. I am not sure where I will end up but there is a high chance I will be starting my professional life out of state or even out of the country.
Does anyone have advice for a prospective real estate investor that has not figured out where home is yet? Where to buy? How to Analyse a property from afar? How to pick a neighborhood? Just to name a few of the questions running through my mind.
Any thoughts from a seasoned investor or newbie going through a similar situation would be very much appreciated.
Thanks!
Hey Jake. Great questions and welcome to the forums. I was talking with a mentor and long time successful investor this morning who said something that stuck with me. He said now is a time to be "aggressively patient."
Times are certainly changing with the economic reality we are facing. It's hard to graduate into a recession, I have been there.
Being young and mobile with no commitments it may be easiest to relocate to a market that you could at least have the options of purchasing your own home. Figuring out where to live, what you'll be doing professionally, and then trying to throw in long distance real estate investing may be an uphill challenge.
The ability to get in the trenches of a local market during times like these to be able to see where value is going, stay abreast of political changes, news, developments, business closings/openings, etc, is in my opinion very helpful.
Hey Jake. Great questions and welcome to the forums. I was talking with a mentor and long time successful investor this morning who said something that stuck with me. He said now is a time to be "aggressively patient."
Times are certainly changing with the economic reality we are facing. It's hard to graduate into a recession, I have been there.
Being young and mobile with no commitments it may be easiest to relocate to a market that you could at least have the options of purchasing your own home. Figuring out where to live, what you'll be doing professionally, and then trying to throw in long distance real estate investing may be an uphill challenge.
The ability to get in the trenches of a local market during times like these to be able to see where value is going, stay abreast of political changes, news, developments, business closings/openings, etc, is in my opinion very helpful.
Hey Jacob - Congrats on your recent graduation! I've been in real estate investing since 2016. My personal opinion is to invest somewhat close to home in a market you're familiar with. I have property as far as 6.5 hours from my home, but I'm familiar with the area, I know people who can help me in the area and I'm within a days drive to the property. If you end up purchasing a property far away, you'll have to either find trustworthy tenants who will take care of the property for you (mow the lawn, keep the place clean, let you know when issues arise) or you'll have to hire a property manager, which just eats into your profits.
I also like to be a bigger fish in a small pond. Trying to compete in bigger markets around me like Atlanta or Charleston..I can't compete. There will always be someone faster with more money, more connections. So, I find it easier and profits better outside the city limits or smaller markets where the competition isn't as harsh. Probably not ideal for a young guy just out of college, but there's a lot of money to be made in the smaller markets.
All the best for your future!
Hey Neal!
Thanks so much for your thoughtful response. I love the idea of being "aggressively patient". Having spent the last 6 years in Accademia and working with the federal and state government in the environmental sector I am quite practiced at being patient as the goings-on in science and government are notoriously slow.
Having grown up overseas and then moving around quite a bit since coming to the states I don't really know any market particularly well. I feel very much in limbo at the moment. I have been trying to consume all of the knowledge I can about personal finances and real estate so that I have more agency in my life during these turbulent times.
It is becoming increasingly apparent to me that I am trying to fight an uphill battle by trying to figure out where to buy real estate while also trying to get a job. I appreciate your validation of this sentiment.
I tend to be much better at keeping up with international news and the chatter coming out of DC than I am at maintaining a good understanding of municipal happenings but will take your suggestion to heart and try to shift my knowledge base to the local.
I see that you are from Portland! That's awesome. Do you have any Oregon specific advice in case I am lucky enough to stay in this beautiful place?
Thanks again Neal!
Thanks for the guidance Mark!
As I indicated in my response to Neal, I am having a hard time determining what "closer to home" really means right now. My parents are real estate investors and have used property managers my whole life since they have always taught overseas. I know how much this can eat out of one's profits but I am hoping that if I have a similarly nomadic lifestyle that I will be able to find a reliable property manager. Of course, this means I will still try to limit myself to one region so that I don't have to juggle multiple property managers.
Right now I living close to a small town that has a pretty expensive real estate market. It is a seasonally busy place with a very old permanent population. I am also close to a larger town (Bend, OR) but this town has experienced quite the boom in recent years. This combined with high property taxes and renter-friendly laws in Oregon makes me nervous to get my feet wet in this particular pond.
Thanks again Mark!
@Jacob Derksen The Oregon specific advise I have is to not equate price with value. We work in larger dollar amounts than in other markets, which can look daunting from the outside, and it can be because we use debt leverage by necessity, but boots on the ground knowledge is also a critical leverage tool that can help you even in Sisters where you are.
There’s a lot of good areas around you from Sisters, Bend, Redmond, Prineville, even up to Madras. All have their different flavors, and challenges.
BP pushes a lot of people to become armchair analysts and advise them to run numbers on properties everyday. That is a good skill building exercise, but still caters to an unproductive approach and is used as a crutch for those with analysis paralysis.
Forming relationships and telling people what you want to do is how you build your lifelong foundation. You will figure out how you can collaborate or help others, and they will do the same for you.
This is a marathon not a sprint. I really love the house hack strategy because you’re going to need to live somewhere. You can always trade up down the road.
I’ve also spent a lot of time working overseas and have been in your shoes. Feel free to DM me so we can connect for a call.
"combined with high property taxes and renter-friendly laws in Oregon makes me nervous to get my feet wet in this particular pond."
I agree. I live in Bend and would not want to live anywhere else. It's an amazing here. When it comes to investing, I put my money into homes in the South.
You are right to avoid Central Oregon especially at these prices. What I will say though is if price drop dramatically this is a great place in my opinion to own real estate. If you don’t think you will stay in the area however I would probably look at another location as well.
FYI we had deals that were getting the 1% rule last recession and people who bought those deals including myself couldn't be happier. Watching our local MLS the market is siezing up in a fairly dramatic fashion so its possible we will see that kind of a situation again, my guess however is we will not see a return to that.
Hit me up anytime if your still in Sisters,