Advice needed to get started with real estate investment
I have about 1 million saved, and I’m graduating from college next year. I want to get started with real estate investment. I have seen great potential in real estate, especially in NY and NJ area. I’m here to take advice from all the experts in this field. How would you invest 1million for a high cash flow per month? As I don’t want to work after I graduate. so I want to start building my passive income from the real estate. Looking forward to your suggestions :)
Congratulations on getting to where you are. How much do you need to bring in passively per year to cover or exceed your living expenses? That'll tell you what return you need to make at a minimum. Ideally, you'll exceed that so you can grow your wealth over time. This is known as your "Freedom Number."
Multifamily & Self Storage Syndications, turnkey properties, and Triple Net Properties are great things to investigate.
Your first step should be to get educated on the various options out there, so you can make an educated decision for yourself. It's an unfortunate reality that there are people out there who are willing to take advantage of a new investor. I would suggest that you start with books and podcasts, and do not invest in any of the various $5k, $10k, $50k coaching programs out there until you've picked a course of action and dedicated yourself to it.
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Originally posted by @Tauseef Ur Rehman:I have about 1 million saved, and I’m graduating from college next year. I want to get started with real estate investment. I have seen great potential in real estate, especially in NY and NJ area. I’m here to take advice from all the experts in this field. How would you invest 1million for a high cash flow per month? As I don’t want to work after I graduate. so I want to start building my passive income from the real estate. Looking forward to your suggestions :)
If you are looking to maximize cash flow a lot of people look to the turnkey markets as the pricing is way cheaper with great rent to price ratios. Long story short you can really stretch your million. Plus there are tons of these turnkey markets out there. They are well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors
- Cleveland, Ohio
- Dayton, Ohio
- Toledo, Ohio
- Youngstown, Ohio
- Cincinnati, Ohio
- Memphis, Tennessee
- Birmingham, Alabama
- Kansas City, Missouri
- Saint Louis, Missouri
- Indianapolis, Indiana
- Detroit, Michigan
- Erie, Pennsylvania
- Louisville, Kentucky
- Milwaukee, Wisconsin
- Jackson, Mississippi
Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.
One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.
- Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
- Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
- Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
- Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
- Make sure your property manager is a licensed real estate brokerage.
- Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.
