Best places to invest for first time investor?

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Best places to invest for first time investor?

Luke Andersen
Investor · San Diego · Member since 2021 · 8 posts · 41 votes

I'm very excited to start my real estate investing journey. I'm currently making the big decision of where to start though. I've heard places that states like Taxes, Ohio, Florida have great ROI and affordability. If you have experience in any of these markets or know of any recommendations I would be grateful. Thank you!

~ Luke 

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Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
5y

Best place to invest is somewhere that you know very well.

54Reply
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  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    Best place to invest is somewhere that you know very well.

    54Reply
  • Michael Plante
    Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    5y

    I second the good advice above 

    9Reply
  • Luke Andersen
    OP
    Investor · San Diego · Member since 2021 · 8 posts · 41 votes
    5y

    @Eric James I'm born and raised in San Diego, CA. Don't know any other areas very well, but willing to learn. Any suggestions? 

    2Reply
  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    5y

    @Luke Andersen San Diego is one of the best markets in the nation for overall return in the long run. Best of luck on whichever market you decide :)

    Compass5122 Reviews
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    3Reply
  • Luke Andersen
    OP
    Investor · San Diego · Member since 2021 · 8 posts · 41 votes
    5y

    Thanks Twana. Yes, I'd agree in the long run SD is great. But I don't want to start out with negative cashflow. It's pricey and highly competitive. 

    7Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    5y

    The RE market is efficient.  The RE prices are based on numerous criteria including expected long term return and expected risk.  

    Cheap markets are cheap because the risk is perceived high or the long term return (I.e. appreciation) is perceived to be low.  

    The best place for a new investor to invest is their home market.  This is a market typically well known.  It is a market where the investor can perform heroics if/when needed.   It is a market where they can self manage to increase knowledge.  

    I recommend all investors consider their home market before looking elsewhere.  The grass is typically not greener greener elsewhere. 

    21Reply
  • Account Closed
    Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
    5y

    @Luke Andersen

    What research have you done? What do you like or dislike about what you are finding?

    5Reply
  • Matt Lyons
    Rental Property Investor · Chicago, IL · Member since 2019 · 109 posts · 443 votes
    5y

    @Luke Andersen everywhere is great and everywhere can suck!

    First, know why you are investing, what is your goal (cash flow, appreciation, flips, etc)

    Second, how are you going to manage it... property manager or by yourself?

    Once you know those two things then you can figure out the where. In my opinion there are deals and steals everywhere but you have to first figure out what you want and how you will manage

    For cash flow and ease of management I like to look in smaller country type towns... they suck for appreciation but the buys are great and cash flow is great and tenants are great... most of my properties get me my down payment back from cash flow profit in under 36 months

    If you want appreciation WAIT! Prices are high in those “hot” areas so wait till they come down some... I bought a place in Bonita Springs FL and I paid fair value in Dec of 2020.... it is under contract to close in a week at $105k more than I paid. Wait for the hot areas to come down, cash flow in small towns and if so all states can work

    12Reply
  • Zachary Jones
    Investor · Scottsdale, AZ · Member since 2020 · 6 posts · 2 votes
    5y

    @Brandy Ray

    What type of cash flow deals do you see out in Orlando? What are the best places to invest out there? I am looking to pick Iona 3-4 bedroom 2 bath rental property that cash flows well. Please

    Let me know if you have any good deals

    Zac

    1Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Dan H....unrelated, but what is your profile picture...it looks pretty insane...I just want to confirm what I think I'm seeing ;)

    937-979-7000
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    4Reply
  • Luke Andersen
    OP
    Investor · San Diego · Member since 2021 · 8 posts · 41 votes
    5y

    Thank you all for your responses. @Account Closed I've looked into lots of markets and it seems like there are more cash flowing deals in places like Texas, Florida, Ohio etc. I'd love to get into a market with lots of property options so I can scale and retain the property management and contractors. Long distance investment is a little daunting, but I'm game for the challenge. 

    Thanks @Matt Lyons. Sounds like you got some killer properties. Great work. My goal is to grow passive income by purchasing single family properties (eventually multifamily) and holding. I have about 150k budget to invest and I"m looking for 10-15% cash on cash returns. I'll need a property manager because they'll be long distance. 

    1Reply
  • Matt Lyons
    Rental Property Investor · Chicago, IL · Member since 2019 · 109 posts · 443 votes
    5y

    @Luke Andersen I am happy to take your money and pay you 10% with zero risk!

    Either that or check out 100 S Sturgeon, Montgomery City MO on loop net.

    I have looked at it and you will EASILY make your 10-15% with that property.

    Problem, solved!

    4Reply
  • Luke Andersen
    OP
    Investor · San Diego · Member since 2021 · 8 posts · 41 votes
    5y

    @Matt Lyons thanks Matt. Looks like you've figured out a good system for doing RE "Part time". 50 doors is impressive. That property has been on the market 183 days. Wonder why no one's grabbed it. 

    1Reply
  • Matt Lyons
    Rental Property Investor · Chicago, IL · Member since 2019 · 109 posts · 443 votes
    5y

    @Luke Andersen first the initial price was high. Second people have had a hard time financing because owner has decided not to rent, he has about 40 doors in town and wants to be done and retire. He also feels easier to show with no tenants.

    I have investigated the buildings (in pretty good and turnkey shape) and the local rental market and it is not bad. For sure there is a need for rental space in that area.

    And finally NO ONE ever looks in small towns like this

    Seriously it is a no brainer... I would happily partner with you on it because the deal works

    2Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    5y
    Originally posted by @Matt Lyons:

    @Luke Andersen I am happy to take your money and pay you 10% with zero risk!

    Either that or check out 100 S Sturgeon, Montgomery City MO on loop net.

    I have looked at it and you will EASILY make your 10-15% with that property.

    Problem, solved!

     Do you have any connections in those particular areas you mentioned? My challenge is not so much buying the property, but having someone that can be over the light rehabs. Sometimes contractors and handyman see an out of area investor As an opportunity for a great big bonus.

    1Reply
  • Matt Lyons
    Rental Property Investor · Chicago, IL · Member since 2019 · 109 posts · 443 votes
    5y

    @Joe S.

    Yes there is a property management company out of Mexico MO

    The place has been mostly rehabbed (metal roofs and newer mechanicals and so forth) so it won’t need a lot

    I have been seriously considering it but just bought two other places and have one under contract so a little light on cash

    I can get it (I have looked at it three times and negotiated as far owner will go)... I am happy to partner with someone:

    You put in $40k and I will pay rest of 20% down... I will manage and lease up and we can split monthly profits 50/50

    If it is still on the market once my FL property sells (it is under contract) I will be doing it myself, but if someone else takes it there are two property management companies in the area but I have no personal experience with either

    5Reply
  • Jane A.
    Investor · Shawnee Mission, KS · Member since 2015 · 428 posts · 117 votes
    5y

    Hi Luke, we do remotely KS and MO from CA. Check on 9402 Reeder Overland Park KS and 9309 w 83 st Overland Park KS on Zillow. Good property management company in place. Best, Jane 

    5Reply
  • Mel Hayes
    Investor · Los Angeles, CA · Member since 2016 · 256 posts · 111 votes
    5y

    @Luke Andersen Do you own your main residence?

    2Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    @Luke Andersen check out WNY. Low barrier to entry and solid cash flow.

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    3Reply
  • Billy Smith
    Shawnee Mission, KS · Member since 2016 · 719 posts · 313 votes
    5y

    I second the idea go where you know the market ,I stay in my circle of knowledge of my home town I know  what rents are  etc...

    2Reply
  • Jorge Cajamarca
    Rental Property Investor · Lindenhurst, NY · Member since 2018 · 22 posts · 2 votes
    5y

    @Matt Lyons please send me any info you have on property. I am looking to diversify by purchasing in different markets. Thanks for sharing!!!!

    1Reply
  • Matt Lyons
    Rental Property Investor · Chicago, IL · Member since 2019 · 109 posts · 443 votes
    5y

    @Jorge Cajamarca

    It is a four plex and three SFR... all but one has new metal roof. All have new furnaces as well

    Two are rented and owner does not want to rent the rest but they are all turnkey (I have seen them three time now). He will go as low as $285k but no lower.

    Once rented up which would be easy to do it will generate about $3750 gross with tenants paying all utilities.

    If you want I would do the following:

    You put in $40k and I cover rest to close and get fully rented (about $20k)

    We own and split profits 50/50

    If I need to hire a management company that will come out of my half of the profits.

    If not, beat of luck it is a great deal

    3Reply
  • Jorge Cajamarca
    Rental Property Investor · Lindenhurst, NY · Member since 2018 · 22 posts · 2 votes
    5y

    @Matt Lyons PITI?

    I will do my research in a bit but tied up for the moment

    1Reply
  • Jonathan Fredholm
    Rental Property Investor · White River Junction, VT · Member since 2017 · 23 posts · 12 votes
    5y

    @Eric James I agree, invest in the markets that you know and have done your homework on.

    3Reply
  • Shawn Agaba
    Wholesaler · Member since 2020 · 12 posts · 3 votes
    5y

    @Brandy Ray Hey Brandy, just dipped into the FL market. Looking for Some nice cash flowing properties. May you help?

    Thanks.

    1Reply
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