Is 20K enough? Interested in Remote Rental Properties

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Is 20K enough? Interested in Remote Rental Properties

Gawaine O'Gilvie
Member since 2021 · 10 posts · 12 votes

Hey All!

I'm excited to get into rental properties but not sure where to start. I'm currently reading a book by Brandon Turner (and browsing Bigger Pockets). For the markets that I'm interested I live nowhere near any of them. Also looking for areas with properties that are geared towards cashflow.

I'm hoping to have enough money saved up to get started by the end of the year or early 2022.

Real estate markets I'm interested:

  • Detroit, MI (and surrounding cities)
  • Raleigh, NC (and surrounding cities)
  • Ohio
  • Arkansas
  • Illinois

I'm also open to other cities. I currently have 20K saved up exclusively for investing/real estate. I might be able to save up to $50K this year. Would that be enough to get me started ?

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Greg Pawluk
New to Real Estate · Greater Raleigh · Member since 2021 · 26 posts · 21 votes
5y

I can only speak for Raleigh area.... you will be hard pressed to find something in Wake County for less than 200k, without at least some rehab or capital improvements.  Since you're doing remote, it's an investment, and most lenders are requiring 25% down.  So on 200k house that's 50k right there...without any additional rehab/upgrading/closing costs.  Most homes in this market, depending on price point, are selling 15-50k over asking price right now. No to say with some extensive searching you wont find some.... but if you're looking to minimize upfront costs to get in the game, look in areas like Winston Salem, Fayetteville, Smithfield/Selma, where you can still buy a property for $125k.  Just my perspective, but I'm not pro.

Good work on saving!  

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  • Austen Mueller
    Real Estate Agent · PA · Member since 2021 · 240 posts · 131 votes
    5y

    It all depends on the deal and financing but in short yes 20-50k is enough. Always a good idea to have emergency cash set aside for unexpected repairs and vacancy. I also suggest going to a local meetup if you can. (I know covid through a wrench in that) Talking to other local investors may be a good idea to see if there are cash flowing properties closer to you. You will need to hire a property management company to assist you if you are not able to easily drive to the property to deal with problems. 

    Hope this helps!

    2Reply
  • Greg Pawluk
    New to Real Estate · Greater Raleigh · Member since 2021 · 26 posts · 21 votes
    5y

    I can only speak for Raleigh area.... you will be hard pressed to find something in Wake County for less than 200k, without at least some rehab or capital improvements.  Since you're doing remote, it's an investment, and most lenders are requiring 25% down.  So on 200k house that's 50k right there...without any additional rehab/upgrading/closing costs.  Most homes in this market, depending on price point, are selling 15-50k over asking price right now. No to say with some extensive searching you wont find some.... but if you're looking to minimize upfront costs to get in the game, look in areas like Winston Salem, Fayetteville, Smithfield/Selma, where you can still buy a property for $125k.  Just my perspective, but I'm not pro.

    Good work on saving!  

    6Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 · 10 posts · 12 votes
    5y
    Originally posted by @Greg Pawluk:

    I can only speak for Raleigh area.... you will be hard pressed to find something in Wake County for less than 200k, without at least some rehab or capital improvements.  Since you're doing remote, it's an investment, and most lenders are requiring 25% down.  So on 200k house that's 50k right there...without any additional rehab/upgrading/closing costs.  Most homes in this market, depending on price point, are selling 15-50k over asking price right now. No to say with some extensive searching you wont find some.... but if you're looking to minimize upfront costs to get in the game, look in areas like Winston Salem, Fayetteville, Smithfield/Selma, where you can still buy a property for $125k.  Just my perspective, but I'm not pro.

    Good work on saving!  

    Hey this is the type of feedback I'm looking for thanks! I'll start checking out those areas. And yes I am looking to minimize upfront costs to get in the game. Currently learning and saving.

    1Reply
  • Yoann Dorat
    Investor · Boca Raton FL · Member since 2017 · 255 posts · 188 votes
    5y

    Hi @Gawaine O'Gilvie in Detroit (and southeast Michigan in general) you can get something in a C-D neighborhood for $30-$50k cash (but I wouldn't recommend that if you're hands-off and out of state) or you can use it as a down payment and buy a house in a B area in the suburbs for around $130k-$150k. (Eastpointe, Warren, Hazel Park, Taylor, and Romulus are the areas you should look at)

    Keep in mind that finding financing within the city of Detroit is still difficult, especially if the ARV is below $75k.

    I believe Cleveland and Toledo in Ohio are quite similar, I wouldn't go to Illinois because of the very restrictive tenant-landlords laws, and I don't know much about NC and AR. 

    Hope this is helpful, 

    3Reply
  • Ryan Blackstone
    Real Estate Broker · Fayetteville, AR · Member since 2017 · 375 posts · 240 votes
    5y

    Brandon says that you need 2 of 3 things,hustle, a Knowledge, or money. You don't need all three.  I am in Arkansas and if you had a deal I would bring the money. I think that is with anyone in the areas you are looking at. 

    3Reply
  • Jonathan PavkovBusiness Member
    Columbus, OH · Member since 2021 · 201 posts · 166 votes
    5y

    This is awesome! Welcome and congrats on investing in RE. I invest in Columbus, and I can say there are definitely opportunities around here. Cleveland / Cinci / Dayton have some opportunities as well. Good luck!

    [email protected]614-802-5721
    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Gawaine O'Gilvie:

    Hey All!

    I'm excited to get into rental properties but not sure where to start. I'm currently reading a book by Brandon Turner (and browsing Bigger Pockets). For the markets that I'm interested I live nowhere near any of them. Also looking for areas with properties that are geared towards cashflow.

    I'm hoping to have enough money saved up to get started by the end of the year or early 2022.

    Real estate markets I'm interested:

    • Detroit, MI (and surrounding cities)
    • Raleigh, NC (and surrounding cities)
    • Ohio
    • Arkansas
    • Illinois

    I'm also open to other cities. I currently have 20K saved up exclusively for investing/real estate. I might be able to save up to $50K this year. Would that be enough to get me started ?

    Yeah, you can do 25% down and get a good started rental. I invest in Columbus, Ohio but am looking to expand to Cleveland and Cincinnati as well 

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    1Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 · 10 posts · 12 votes
    5y
    Originally posted by @Stephen Brown:

    Yes! Save up to $50k and you can buy a good house in a decent neighborhood here in our market free and clear. Rent it out for $800-$900. It'd be a great start. Let me know if you're interested brother!

    Thanks! I'll aim for that target. I'll also look into the Toledo, OH market. 

    1Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Gawaine O'Gilvie:
    Originally posted by @Stephen Brown:

    Yes! Save up to $50k and you can buy a good house in a decent neighborhood here in our market free and clear. Rent it out for $800-$900. It'd be a great start. Let me know if you're interested brother!

    Thanks! I'll aim for that target. I'll also look into the Toledo, OH market. 

     I agree Toledo has very accessible entry prices. You could buy single family for 45k that rents for 850, or a four plex for 40k down that rents for 2,100.

    1Reply
  • Rebecca Sequeira
    Real Estate Agent · West Chester, OH · Member since 2016 · 16 posts · 18 votes
    5y

    Gawaine - as mentioned above, Ohio is a great place to invest. If you are interested in Cincinnati or Columbus, I recommend joining either Cincinnati REIA or COREE (Columbus area). (I'm in Cincinnati). We've been meeting online throughout the whole pandemic - joint meetings. There's a tremendous amount of free education and networking - and the membership is only $25/mo or $247/yr. Best investment!!! There's also about 20 'focus' groups - rehabbers group, landlord group, apartment investors, short-term rentals, new investors, note investos, creative financing, etc and more.

    Attend the first meeting for free and check it out.

    2Reply
  • Christie Duffy
    Real Estate Agent · North Jersey · Member since 2016 · 76 posts · 29 votes
    5y

    @Gawaine O'Gilvie congrats on saving and getting started! I’ve invested in and out of my immediate area and I can tell you that if I were doing my first investment again I would do it in my own market... I’d there any reason why you are researching other markets than your own? I’m a believer in there are deals in every single market. If you study the market hard enough you can find multiple deals in your own market.

    1Reply
  • Abigail Cariaga
    New to Real Estate · Concord, CA · Member since 2021 · 27 posts · 5 votes
    5y

    @Rebecca Sequeira I’m interested to join. How do I get in?

    0Reply
  • Nicolas Thatcher
    Rental Property Investor · Austin, TX · Member since 2018 · 23 posts · 9 votes
    5y

    @Gawaine O'Gilvie

    I saw that you mentioned Arkansas.

    We have boots on the ground over in Hot Springs, Arkansas right now searching some good vacation cash flow properties. You can get into a rental home for roughly $100k there which means your $20k saved would get you into a property.

    1Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 · 10 posts · 12 votes
    5y
    Originally posted by @Christie Duffy:

    @Gawaine O'Gilvie congrats on saving and getting started! I’ve invested in and out of my immediate area and I can tell you that if I were doing my first investment again I would do it in my own market... I’d there any reason why you are researching other markets than your own? I’m a believer in there are deals in every single market. If you study the market hard enough you can find multiple deals in your own market.

    @Christie Duffy I’ve heard that starting in your own market is the best way to go. One mentor of mine says the Greater Boston market is too high, very HCOL. I could also look into the Connecticut or Rhode Island market. Any thoughts?

    0Reply
  • Rebecca Sequeira
    Real Estate Agent · West Chester, OH · Member since 2016 · 16 posts · 18 votes
    5y
    Originally posted by @Abigail Cariaga:

    @Rebecca Sequeira I’m interested to join. How do I get in?

    Go to www.cincinnatireia.com or www.centralohioreia.com

    1Reply
  • Sam AlbertPro Member
    Realtor · Providence, RI · Member since 2016 · 98 posts · 66 votes
    5y

    @Gawaine O'Gilvie Rhode Island is a great place to start, especially once more inventory becomes available. ROI is good on 3+ families. The average price of a 3 Family is about 350k. However, you can go to areas such as woonsocket or central falls and get properties cheaper than the average.

    There are a fair number of good property management companies here as well. Let me know if you have any other specific questions.

    0Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Gawaine O'Gilvie

    You’ll have a tough time doing that in Raleigh, but in Detroit or Columbus definitely. It’s important wherever you decide to invest to have a strong local team of agent, lender, contractor, and property manager.

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
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    2Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    To the locations @Yoann Dorat shared, we'll add Harper Woods, Oak Park and Redford.

    Metro Detroit Rent-to-Price ratios are hard to beat!

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    1Reply
  • Linda S.
    Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    @Gawaine O'Gilvie,

    Where ever you decide--- VISIT at least twice before you decide.    If you're doing anything below a "C" type of property, you'll need to see what the streets are like.      Right now where I invest, someone is trying to flip a house that's legit across the street from a drug dealer, everyone who is local knows it's a horrible section of the street-- but the flipper obviously didn't care.   The house has been sitting on the market for a month or so now, point being-- network and make friends with local investors through meetups, they know all the stuff you can't find out online.

    2Reply
  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    Be very careful on cheap buildings. If the rents are low and you are trying to manage from out of state the management fees/repair costs manager charges will often destroy any cashflow. It's often better to save up a bit more and buy 1 higher rent producing building even if have to wait a bit longer. I like 4 unit buildings. 

    0Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 · 10 posts · 12 votes
    5y
    Originally posted by @Linda S.:

    @Gawaine O'Gilvie,

    Where ever you decide--- VISIT at least twice before you decide.    If you're doing anything below a "C" type of property, you'll need to see what the streets are like.      Right now where I invest, someone is trying to flip a house that's legit across the street from a drug dealer, everyone who is local knows it's a horrible section of the street-- but the flipper obviously didn't care.   The house has been sitting on the market for a month or so now, point being-- network and make friends with local investors through meetups, they know all the stuff you can't find out online.

    Thanks, this is helpful in getting started. I'll look into local investor meetups and network.

    0Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 · 10 posts · 12 votes
    5y
    Originally posted by @Henry Lazerow:

    Be very careful on cheap buildings. If the rents are low and you are trying to manage from out of state the management fees/repair costs manager charges will often destroy any cashflow. It's often better to save up a bit more and buy 1 higher rent producing building even if have to wait a bit longer. I like 4 unit buildings. 

    Will keep this in mind, thanks!

    0Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 · 10 posts · 12 votes
    5y
    Originally posted by @Henry Lazerow:

    Be very careful on cheap buildings. If the rents are low and you are trying to manage from out of state the management fees/repair costs manager charges will often destroy any cashflow. It's often better to save up a bit more and buy 1 higher rent producing building even if have to wait a bit longer. I like 4 unit buildings. 

    0Reply
  • Gawaine O'Gilvie
    OP
    Member since 2021 · 10 posts · 12 votes
    5y
    Originally posted by @Yoann Dorat:

    Hi @Gawaine O'Gilvie in Detroit (and southeast Michigan in general) you can get something in a C-D neighborhood for $30-$50k cash (but I wouldn't recommend that if you're hands-off and out of state) or you can use it as a down payment and buy a house in a B area in the suburbs for around $130k-$150k. (Eastpointe, Warren, Hazel Park, Taylor, and Romulus are the areas you should look at)

    Keep in mind that finding financing within the city of Detroit is still difficult, especially if the ARV is below $75k.

    I believe Cleveland and Toledo in Ohio are quite similar, I wouldn't go to Illinois because of the very restrictive tenant-landlords laws, and I don't know much about NC and AR. 

    Hope this is helpful, 

    This is very helpful. I'm taking notes and researching these areas. Already started ramping up my savings plan. Since financing in Detriot is difficult, does that mean I will most likely have to use cash?

    0Reply
  • Paul Dante Pronio
    New to Real Estate · New York Tri-State · Member since 2021 · 13 posts · 3 votes
    5y

    @Ryan Blackstone

    Hi Ryan I like your comment and this thread is of interest as I am in the same boat. Looking for property in areas that aren’t in a bubble and need tlc. My partner and I are open to looking in all areas maybe we should check out your areas down south.... let’s stay in touch about this as we research further.

    Take care

    1Reply
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