Got cash, good credit but majorly stuck.

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Got cash, good credit but majorly stuck.

Amir Hemmat
Member since 2020 · 2 posts · 7 votes

I’ve got $100k, I’ve already gotten pre-approved for a loan however I’m stuck on where to buy my first investment. I’ve read much of the BP investing in rental properties book - I know about neighborhood classes, what pitfalls or opportunities to look out for - however having issues pulling the trigger on WHERE EXACTLY to buy. Maybe I missed in the book? I’m getting lost in the sheer volume of location options - do I buy in San Diego, North Carolina, Ohio etc...

In a world that my proximity to investment property is not an issue - what are the first best steps in pinning down location of investment? 

Any guidance you have is appreciated. 

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Austin Largusa
Investor · San Francisco Bay Area · Member since 2019 · 119 posts · 79 votes
5y

Find the criteria that's important to you, and then take action.

I started by calling realtors and property managers in the markets I thought of. It causes you to take action without committing any finances

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  • Austin Largusa
    Investor · San Francisco Bay Area · Member since 2019 · 119 posts · 79 votes
    5y

    Find the criteria that's important to you, and then take action.

    I started by calling realtors and property managers in the markets I thought of. It causes you to take action without committing any finances

    8Reply
  • Christopher H.
    Lender · Okanagan, BC · Member since 2017 · 105 posts · 77 votes
    5y

    @Amir Hemmat

    Someone is going to ask so I'll start it off.

    Where do you live and what's wrong with Investing there?

    6Reply
  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    5y

    @Amir Hemmat I invest locally and have OOS investments. I strongly believe that new investors should get started locally. Especially in a place like San Diego, arguably one of the best RE markets in the U.S.

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    5Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    5y

    When you narrow it down to 2-3 markets I would highly recommend going there and getting a feel for the place before plunking down your hard earned money. The out of market investing strategy can work, but you are highly dependent on the people in the local market that will be working for you if it is not within driving distance. I would exhaust all possible local options before going out of market. 

    2Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    The best place to buy is often where you live.  Exceptions happen if you can't cash flow (then buy in a neighbouring town) or you can't afford a house in that location (again look to a neighbouring town).  You are always going to have lots of good options.  Just pick one.

    2Reply
  • Kwame Amoako
    Real Estate Agent · Columbus, OH · Member since 2019 · 82 posts · 133 votes
    5y

    @Amir Hemmat

    I agree with Austin, I think the best idea would be to call agents in areas you are looking to invest. A good one in Columbus would be @Steven Wilson, he’s got investment experience and can help you learn the market.

    4Reply
  • Andy EakesPro Member
    Property Manager · San Diego, CA · Member since 2020 · 205 posts · 162 votes
    5y

    @Amir Hemmat Invest locally. It may be more expensive if you are in San Diego, but that's where the real money is made.

    Plus, when you invest locally, it gives you a chance to build relationships. If there was one thing that isn't really covered here that I wish was covered more is building relationships. It has helped me so so much. And I couldn't do that if I simply relied on someone else's connections out of state the whole time. To me, I couldn't help but feel that I was selling myself short initially. When I get some experience with my properties, and I feel that I have good systems, then I will feel more comfortable investing out of state and using boots on the ground to invest in real estate. 

    Just an example though! At the end of the day, you should do what feels best to you. Good luck!

    3Reply
  • Matt Nico
    Member since 2019 · 448 posts · 306 votes
    5y
    Originally posted by @Amir Hemmat:

    I’ve got $100k, I’ve already gotten pre-approved for a loan however I’m stuck on where to buy my first investment. I’ve read much of the BP investing in rental properties book - I know about neighborhood classes, what pitfalls or opportunities to look out for - however having issues pulling the trigger on WHERE EXACTLY to buy. Maybe I missed in the book? I’m getting lost in the sheer volume of location options - do I buy in San Diego, North Carolina, Ohio etc...

    In a world that my proximity to investment property is not an issue - what are the first best steps in pinning down location of investment? 

    Any guidance you have is appreciated. 

    Amir,

    If I were you, I would do a little research on the forums here with real life people.... Choose a half a dozen markets or so and then go into those specific local real estate forums. Look at the people in those local forums that post the most and see what they are talking about. And if anybody in the local forums catches your attention, message them personally to ask them about that market. 

    When you post on the forums "I have a lot of cash and no deal", I'm sure you will get flooded with messages of "Please give me your money", but if you sneak around a bit you can send the messages. If you were to take my market specifically (Orlando Fl), you can tell who the good investors are in my area by doing a little digging.

    Hope this helps,

    Matt

    1Reply
  • Gio Corpus
    Realtor · New York, NY · Member since 2019 · 23 posts · 18 votes
    5y
    Originally posted by @Austin Largusa:

    Find the criteria that's important to you, and then take action.

    I started by calling realtors and property managers in the markets I thought of. It causes you to take action without committing any finances

    I agree with Austin. Ultimately, it's up to you. Make sure you know enough about the market you invest in. 

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Amir Hemmat:

    I’ve got $100k, I’ve already gotten pre-approved for a loan however I’m stuck on where to buy my first investment. I’ve read much of the BP investing in rental properties book - I know about neighborhood classes, what pitfalls or opportunities to look out for - however having issues pulling the trigger on WHERE EXACTLY to buy. Maybe I missed in the book? I’m getting lost in the sheer volume of location options - do I buy in San Diego, North Carolina, Ohio etc...

    In a world that my proximity to investment property is not an issue - what are the first best steps in pinning down location of investment? 

    Any guidance you have is appreciated. 

    I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contract, lender, and property manager.

    https://www.biggerpockets.com/blog/core-four-real-estate-team

    If you choose to invest in Columbus, Ohio let me know!

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    0Reply
  • Shawn G.
    Rental Property Investor · Orlando, FL · Member since 2017 · 207 posts · 125 votes
    5y

    @Matt Nico  I am in Orlando. Would be happy to connect & discuss.  I am still investing in our surrounding areas. 

    1Reply
  • Mark Frattini
    Real Estate Agent · San Diego, CA · Member since 2014 · 338 posts · 176 votes
    5y

    Hi @Amir Hemmat

    Welcome to BP! Where you invest depends on what your goals are.

    0Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Amir Hemmat:

    I’ve got $100k, I’ve already gotten pre-approved for a loan however I’m stuck on where to buy my first investment. I’ve read much of the BP investing in rental properties book - I know about neighborhood classes, what pitfalls or opportunities to look out for - however having issues pulling the trigger on WHERE EXACTLY to buy. Maybe I missed in the book? I’m getting lost in the sheer volume of location options - do I buy in San Diego, North Carolina, Ohio etc...

    In a world that my proximity to investment property is not an issue - what are the first best steps in pinning down location of investment? 

    Any guidance you have is appreciated. 

    NC and OH are good options. Pick what area or city you prefer, usually deciding between heavy cash flow or lower cash flow but better chance of appreciation. Then build your team and find a decent deal. 

    0Reply
  • Zach Gring
    Realtor · Saint Charles, IL · Member since 2020 · 126 posts · 101 votes
    5y

    @Amir Hemmat

    Where do you have a unfair advantage?

    Where do you have a close friend who knows they’re area?

    Family that knows their area?

    Every major msa has markets within an hour or two that make sense?

    What are your goals long term? What can your w2 income support for purchase prices?

    If you’re looking for cheap pp and high cash flow look for more rural markets 5-15k populations you’ll get long term tenants decent cash flow. But little appreciation.

    If you’re looking to supplement your retirement look for a solid appreciation area with good schools that cash flow on 15 or whatever number of years until your target retirement age. Supply the market with a nice place be a good person pay the place down and keep saving for more of them.

    Rei is very personal to your individual goals..

    0Reply
  • Brian Walters
    Las Vegas, NV · Member since 2019 · 173 posts · 78 votes
    5y

    @Amir Hemmat start with what you know best. If you go local you can have eyes on everything and probably have contacts, or contacts that can recommend trades.

    If you go OOS learn as much as you can about the area first. That extra time can save you a lot of money on the backend.

    Go luck!

    0Reply
  • Brian Walters
    Las Vegas, NV · Member since 2019 · 173 posts · 78 votes
    5y

    *Good luck!

    0Reply
  • Mike TerryPro Member
    Investor · Fort Myers, FL · Member since 2015 · 293 posts · 278 votes
    5y

    Study your local neighborhood. Walk it, drive it, know every house.  I have flipped 4 properties within 1 mile of my house in a competitive market.  My competitive advantage is know my home market well and can jump on deals as soon as I see them.  You can only act safely with speed with a solid knowledge of your market.

    0Reply
  • Allen L.
    Rental Property Investor · Chicago and mainly invests in KS remotely · Member since 2018 · 360 posts · 314 votes
    5y

    Start investing small, maybe with single family homes or duplexes in a growing city that cash flows after expenses. Get a good property manager is key. I invested in 3 states before I realized I had a good team in one of them.

    3Reply
  • Tommie Glasper
    Wholesaler · Indianapolis · Member since 2020 · 4 posts · 0 votes
    5y

    Start locally.

    0Reply
  • Aiden Hatchett
    Rental Property Investor · Arlington, TX · Member since 2019 · 27 posts · 6 votes
    5y

    @Amir Hemmat

    Hey Amir!! You came to the right place for some insight. Whenever I am stuck, it comes down to an educational issue or a networking issue. As for where you want to invest, somethings to think about are: what are your goals? Where do you want to be in five years with your investing?

    In life?

    Go from there, your already in the forums asking questions!

    0Reply
  • Kenneth Brisco
    Rental Property Investor · Member since 2020 · 3 posts · 0 votes
    5y

    Funny! I’m in the same position as you. 6 figures in reserves, I’m currently pre-approved, and I live in LA. I do not plan on investing in this market at all because I don’t like how much it has slowed down because of the pandemic. For the last month I’ve been looking at Austin, Denver, Atlanta, and Las Vegas. Vegas has been crossed off my list because there aren’t any jobs here but I was considering doing section 8 rentals in Vegas because I have a relative that’s already doing it. After sharpening my criteria and analyzing more properties I discovered that it wasn’t a good option for me considering how overly hot the market is in Vegas compared to the average income. So now I’m still in communications with RE agents in Denver, Atlanta, and Austin. I’m leaning more towards Atlanta because the opportunity seems to be greater there and being positioned on the east coast will open more doors in my opinion.

    My plan is to single family house hack since my loan is good anywhere being that I have the ability to work remote. My main concern is knowing if renting by the room will work in Atlanta as I know it would in LA. All the research in the world isn’t going to give me my answer. So I started planning my stay down there. Now I’m researching which carrier to ship my car with. Hopefully I don’t get analysis paralysis but ATL is looking like the move for me but I’m going to go see for myself before making a commitment. I hope this helps because it doesn’t seem like anyone is going to be able to give us a clear answer.

    0Reply
  • Ari Hadar
    Investor · Member since 2020 · 401 posts · 86 votes
    5y
    Originally posted by @Matt Nico:
    Originally posted by @Amir Hemmat:

    I’ve got $100k, I’ve already gotten pre-approved for a loan however I’m stuck on where to buy my first investment. I’ve read much of the BP investing in rental properties book - I know about neighborhood classes, what pitfalls or opportunities to look out for - however having issues pulling the trigger on WHERE EXACTLY to buy. Maybe I missed in the book? I’m getting lost in the sheer volume of location options - do I buy in San Diego, North Carolina, Ohio etc...

    In a world that my proximity to investment property is not an issue - what are the first best steps in pinning down location of investment? 

    Any guidance you have is appreciated. 

    Amir,

    If I were you, I would do a little research on the forums here with real life people.... Choose a half a dozen markets or so and then go into those specific local real estate forums. Look at the people in those local forums that post the most and see what they are talking about. And if anybody in the local forums catches your attention, message them personally to ask them about that market. 

    When you post on the forums "I have a lot of cash and no deal", I'm sure you will get flooded with messages of "Please give me your money", but if you sneak around a bit you can send the messages. If you were to take my market specifically (Orlando Fl), you can tell who the good investors are in my area by doing a little digging.

    Hope this helps,

    Matt

    How to i find a local forum in BP?

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    5y

    @Amir Hemmat where do you live, have lived and spend a lot of time?

    [email protected]512-888-9122
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    0Reply
  • Jon Ladd
    Professional · Sun City West, AZ · Member since 2016 · 9 posts · 0 votes
    5y

    @Amir Hemmat

    Highly recommend you check out Michael Zuber and his One Rental at a Time Book and YouTube Channel. I am a 35 year California real estate attorney (San Diego) and own a couple of rentals with the intention of buying more. I know commercial real estate very well but only buy single family rentals. I have a fairly solid grasp of real estate investment and follow sites like Bigger Pockets and Michael Zuber since I enjoy the discussion and on occasion learn something new. Don’t get caught up with the other Internet gurus. Follow and learn from Zuber.

    I also suggest you decide if you want to be a trader or an investor. With $100k down it will be hard to find something in San Diego (or anywhere in California) that will pencil. California is a momentum market. Right now, the market is at the top or has just passed the top and it’s headed down. In 3-4 years it will probably reverse and head back up. If you want to be a “day trade”, you buy toward the bottom in California, rent it until the market cycles back up and sell. Rinse and repeat. Not tax efficient, but if you catch the highs snd lows right you can make a lot of money. Don’t forget, however, that California is instituting rent control which could hurt the rental market.

    If you want to “invest”, find a linear market where prices are more stable (boring) than California. The Midwest is the ideal linear market. Indianapolis, Grand Rapids, Cincinnati, Omaha, Lincoln, Columbia (Missouri) are candidates. With $100k down you could buy 2-3 newer single family homes with 20% down and all three would cash-flow day 1. With 2-3 units you would have enough business to get a decent rate from a property management company to manage the properties for you. Then let your tenants pay the loans down for you over the long haul while you enjoy the tax benefits now (if there are any left under the new administration). This is what I do. 10-12 years from now when I retire, I will sell as many units as are needed to pay off the others and use the income from the paid off units in retirement.

    I know the Grand Rapids market well and can highly recommend it to you. I can also put you in touch with lenders, top-flite agents, and property managers if you are interested.

    0Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    5y

    buy where you know....and know that no one will take better care of your money than you. Long distance investing is risky, do you have a area close to you (within easy driving distance) that is a good possibility?  

    0Reply
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