Starting in real estate and moving to a new state

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Starting in real estate and moving to a new state

Cristian Lopez
New to Real Estate · Bolingbrook, IL · Member since 2020 · 2 posts · 1 vote

I've just turned 19 and am looking to move to another state (haven't decided yet) by the time I'm 20 or within a year. I currently live in Illinois but I'm looking to get started in real estate elsewhere. I've read various articles, watched many videos, and listened to a couple podcasts and I've decided I want to pursue rental property as opposed to wholesaling, fixing/flipping, etc. However, I'm not sure how to go about moving and buying a rental property at the same time. Let's say for reference I move to Georgia- from Illinois- and decide to purchase a single family home with the BRRRR method in mind. I would close on the home and do repairs, but then the BRRRR method talks about renting. How am I supposed to rent my house if it's where I would be living? Would I have to get an apartment as well? Or would I have to attempt and buy a second home, which I doubt would be possible while my first house has a fresh loan? Any advice is appreciated.

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  • Will FraserPro Member
    Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
    6y

    Hi @Cristian Lopez, welcome to the BP Forums!  When processing through your upcoming move here is where mind goes:

    Once you move you’ll need a job (no job, no loan), so if you’ll be financing the purchase then start with the question of “what will I be doing?”  Then, once you know that, figure out what type of asset you’re financially able to buy AND matches your wants and needs sufficiently.  Once you’ve identified this — and let’s say it is a 4-plex that needs some love — you can build you plan.

    If I was looking at this scenario then I would ideally want to purchase using a construction loan, get any of the units that are vacant updated and do any value-adding I want to do to the exterior done.  Then I would move in and, over the next year, update any units that become vacant.  Before the end of that year (the normal Interest Only period of the construction loans I use) I would initiate a refinance.  So, now I get to knock out the construction loan with a permanent, low interest rate loan and profit from the value I added.

    Otherwise I would look at using an FHA 203k type of loan, which would allow you to be "all in" on the purchase for a low amount, and still add value.

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  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    6y

    @Cristian Lopez - I am some questions that I think will help others respond to your post.

    Why do you want to move from Illinois?

    What are your real estate goals?  

    Does moving align with those goals?

    If you use the BRRRR method for a single-family home and also wanted to house hack which is what I think you are saying, you would have to rent by the room. A lot of people looking for a 2 or 3 unit building to BRRRR and house hack. That way you are able to use low down payment financing. Hope that helps and let me know how I can help.

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  • Cristian Lopez
    OP
    New to Real Estate · Bolingbrook, IL · Member since 2020 · 2 posts · 1 vote
    6y

    @Jonathan Klemm - I’ve wanted to move out of Illinois since I was 16, and it’s out of preference and I figured I could find a good state and location within the state to get started with investing into properties. An emerging market or just a healthy market. My goals are to set my self up in the future with enough passive income to sustain myself and not have to have a job apart from real estate. I just don’t know how to start that process while moving out of state and trying to find somewhere to live while I begin investing.

    @Will Fraser - The 4-plex idea you mentioned sounds fine with me, however for this being my first ever real estate investment, I find that daunting. Would you suggest a single family home? Perhaps a duplex? I would need a place to reside while starting to invest, for I am moving out of state. So a live-in MFH sounds like the best move to give me a place to begin my other projects, but to my understanding they need large down payments, as opposed to SF homes that can be worked around. Say I had $50,000. Would that be enough to get me going with a MFH?

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