Looking for guidance - First Investment Property
Member since 2022 · 7 posts · 17 votes
Looking for guidance - First Investment Property
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes@Yogendra Joshi some random info to think about:
1) Most agents are actually commission-friendly, with less than 5% actually being investor-friendly.
- An investor-friendly agent should own rentals and fully understand our investor lingo!
2) Try to invest locally. Investing out of state is risky and you should learn more locally before trying OOS.
3) Condos can be risky. HOA fees & special assesstments can kill cashflow. Many have investor limits and specific rental requirements. Also, one HOA Board meeting vote can change everything for rentals:(
4) Recommend focusing on Class B properties for you first purchase. Class A won't cashflow for 3-5 years. Class C is too risky for newbies. Class B may take 1-3 years to cashflow, but will be a good learning experience and you won't be in over your head.
You should be running numbers on properties to familiarize yourself with the process and what works.
Pick out 2-3 (no more!) Class B Neighborhoods to focus on and learn them well. This will allow you to act fast if you find a deal.
Even if you plan to pay cash, get preapproved by a lender familiar with rentals. You never know...
Find local and online RE investor groups where you can network and accelerate your learning.
Good luck in the New Year!
Logical Property Management4.9462 Reviews
31 Replies
- 11moMark MunsonBusiness MemberLender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
Welcome to BP! The Build Your Investing Team is not a paid service, it is a way to connect you to resources that will help you get started; whether it be an agent, lender, etc. There is a lot to unpack in your questions and a lot of the answers are predicated upon what your investment goals are. What most people are looking for when they start is clarity, determining what their buy box is and how it fits their goals. You can start by joining local real estate investor associations in your area and of course mine the forums here for advice. I would also reach out to lenders and agents through the platform here and start conversations to gain some clarity. You need consultative services, meaning don't choose an agent that can't discuss deeper real estate investing topics nor should you choose a lender that just lazily hands you a term sheet, you want to work with service providers that can share helpful resources, soundboard how to dial in your buy box and where to start, how you can find more deals, etc. There are a lot of ways to make money in real estate, so focus on being intentional and don't get distracted by the numerous avenues; that is to say go deep, not wide. Feel free to reach out, happy to give you any advice I can.
- Member since 2022 · 7 posts · 17 votes11moThanks so much Mark! Is it okay if I DM you here
- 11moMark MunsonBusiness MemberLender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
Quote from @Yogendra Joshi:
Thanks so much Mark! Is it okay if I DM you hereOf course, feel free to message me.
- Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 608 votes11mo
Yogendra, congrats on being in such a strong financial position to start investing. With solid reserves and $85–90K available, you are already ahead of many first-time investors.
Before choosing a property, focus on defining your strategy. Decide whether you want cash flow, appreciation, long-term tenants or short-term rentals. Your goals will determine whether a townhouse, single-family home or no-HOA property is the best fit. Just keep in mind that true no-HOA homes are harder to find unless you are looking in older neighborhoods.
When evaluating potential deals, look for:
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Strong rental demand (good schools, major employers, hospitals, colleges)
Low or no HOA restrictions
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Positive cash flow after mortgage, taxes, insurance and repairs
I am a real estate broker and property manager working with investors throughout Metro Atlanta including Cumming. If you would like help running numbers or choosing the right investment strategy, I am happy to assist.
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- 11moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 970 votes
Hey Yogendra, sounds like you and your wife are in a strong position to start. When I work with investors, especially from out of state, we focus on smaller, cash-flowing properties in B/C class neighborhoods where the numbers make sense from day one, not just schools or amenities. HOA fees can eat into returns, so I usually steer clients toward minimal or no HOA when possible. A good agent is key, and an investor-friendly agent will not just show listings—they know the market, off-market opportunities, and can run the numbers so you don't overpay. If you want, I can share some examples of off-market multi-families in the Midwest that match your investment goals and walk you through how to analyze them.
- 11moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
Hey @Yogendra Joshi, I usually tell first-timers to choose one market, analyze a bunch of deals, and buy something that cash flows today based on real numbers, not hope or appreciation. And yes, investor-friendly agents get paid like normal buyer agents.
Kerlous Tadres | Reafco Real Estate542 Reviews - 11moJuan YepesBusiness MemberLender · Miami, FL · Member since 2025 · 131 posts · 38 votes
@Yogendra Joshi congratulations on reaching this milestone!
Down payment and loan structure vary a lot depending on the strategy. Here are the most common options for first-time (and even seasoned) investors. Feel free to DM if you'd like to explore any of these further.
1. Non-owner occupied: Conventional or DSCR – 20–30% down (15% only for conventional single-family with mortgage insurance).
No owner-occupancy requirement. Good option if you have sufficient funds for a larger down payment and don’t plan to live in the property for at least 12 months.2. FHA house hack: 3.5% down.
Must live in the property for 12 months. After the year, you can convert it to a rental. FHA also works for 2–4 unit multifamily as long as you occupy one unit.
For 3–4 unit FHA loans, the property must also pass the Self-Sufficiency Test (market rents must cover PITIA).3. Renovate → Rent → Refinance:
In either scenario, a cash-out refinance can be done after improving the property to recover part or all of your initial investment (subject to appraisal). Most lenders require 6–12 months of seasoning, depending on the loan type.How to determine whether a property is a good investment:
There are many free and paid calculators where you input the numbers (rent, expenses, taxes, renovation costs) and they provide projected cash flow and return. You can use these to compare properties.
To improve accuracy, investors typically confirm assumptions with a lender, contractor, and realtor (e.g., realistic rents, renovation costs, and after-repair value).If you want to explore options, feel free to DM.
Helm Mortgage Corp - Juan Yepes, Director5118 Reviews - 11moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
Can you house hack and rent your existing house out? That would be the way to minimize the amount you need to put down since you are ideally lowering housing expenses. Otherwise, you'll be needing to do a 25% down investor loan which means you can purchase about a $350-400k property which is fine but it will Use your entire investing funds.
Brick House CPAs53 Reviews - 11moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Yogendra Joshi:
Hello All - I and my wife own a house in Cumming, GA and currently we have 6 months emergency (66k) and currently also sitting on another 85-90k ready to be invested in Real Estate. We always wanted to invest in properties and I have been reading BP forums and some are truthfully awesome stories while some are horrible experiences from first timers.. I would like to understand how can I begin our investment journey- Is it looking for a smaller condo? Smaller house with No HoA? Good schools? Nearby Colleges? How do your decide as an investor if a certain deal is good to go or not.. I know BP has Investor Friendly agents - is that a paid service or just like any other Buyers Agent they assist in finding great investment property deals and due on their commission?
I would really appreciate some guidance here!
Hey Yogendra, sounds like you and your wife are in a great position to start—having solid reserves and dedicated investment capital already puts you ahead of most beginners. The first step is really getting clear on your goal: are you chasing cash flow, appreciation, or a mix of both? That helps guide whether you're looking at condos, SFHs, or small multis and what types of areas to focus on. A lot of investors avoid condos because of HOA fees eating into cash flow, but there are good ones if the numbers work. Personally, I like sticking to affordable single family homes in strong rental markets, and one market I always recommend looking at is Columbus, Ohio. I moved here from Portland in 2020 and now own 10+ rentals because the fundamentals are so strong—population growth, job growth, and huge companies like Intel, Amazon, Google, Facebook, Honda, Microsoft, LG and others investing heavily here. It's still affordable with properties in the $120–180k range that hit the 1% rule and cash flow from day one, and the appreciation potential is strong because of all the development happening. As far as BP's investor-friendly agents, it's not a paid service—you work with them like any normal buyer's agent and they just get paid through commission. The big thing is running your numbers clearly and sticking to your criteria so you know when a deal is worth moving on. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9124 Reviews- Member since 2022 · 7 posts · 17 votes10mo
@Jimmy Lieu Thanks Jimmy! How does one invest in an out of state property? Do you work with a local realtor who is expert in that area? How does showing work in that context - I assume its all Facetime or Live video calls to see the property? 120-180k seems pretty good but I have a fear of buying something until I have physically walked the place... Also, I see multiple markets in BP which are top 5 for Cash on Cash and they're all mostly in Cold places - what kind of maintenance costs does a landlord needs to factor in for cold places? Thanks a lot!
- Real Estate Agent · Columbus | Toledo · Member since 2019 · 608 posts · 768 votes11mo
Quote from @Yogendra Joshi:
Hello All - I and my wife own a house in Cumming, GA and currently we have 6 months emergency (66k) and currently also sitting on another 85-90k ready to be invested in Real Estate. We always wanted to invest in properties and I have been reading BP forums and some are truthfully awesome stories while some are horrible experiences from first timers.. I would like to understand how can I begin our investment journey- Is it looking for a smaller condo? Smaller house with No HoA? Good schools? Nearby Colleges? How do your decide as an investor if a certain deal is good to go or not.. I know BP has Investor Friendly agents - is that a paid service or just like any other Buyers Agent they assist in finding great investment property deals and due on their commission?
I would really appreciate some guidance here!
To begin, start broad, then zoom in: check for job growth and population trends at the city level, then drill down into crime maps, rents/sale prices, and new construction in specific neighborhoods. A "good deal" is subjective, so work backward from your desired monthly cash flow to set your purchase criteria.
Investor-Friendly Agents typically get paid via the seller's commission, but they can also be paid by the buyer, and their specific fee structures can vary. - Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes11mo
@Yogendra Joshi, The longer I’ve been in real estate and the investment space, the more I’ve realized how much this industry can become an absolute rabbit hole, filled with endless “what ifs” and “this or that” debates. It happens year after year, and if you’re not careful, it can quickly lead to analysis paralysis and inaction.
"Should I invest in-state or out-of-state? What's more important, cash flow or appreciation? Should I go turnkey or BRRRR? Should I implement a more creative strategy like STR, MTR, or Rent-By-The-Room, or just stick to long-term rentals? Should I play it safe in A-class markets or take a chance on a C+ market with promising growth indicators?"
As many experienced investors here on BiggerPockets have said time and again, these questions all boil down to your long-term goals. What exactly are you trying to achieve? Is it building passive income to leave your W-2 job eventually? Is it reducing your taxable income? Is it simply building wealth as a hedge against inflation? You mentioned, “We always wanted to invest in properties,” which is great, but I’d flip that into a question: WHY? Why do you want to invest in real estate? Once you get clear on that, the strategy and market decisions become much easier to figure out.
With that said, your long-term goals should therefore inform the returns you're targeting. What Cash-on-Cash Return are you trying to achieve? What ROI or equity multiple makes sense for your timeline and financial plan? Once those metrics are clear, you can start asking whether real estate is even the right asset class to meet your goals, or if other vehicles like notes, syndications, REITs, index funds, or bonds might offer a better fit, often with less hassle.
That brings me to your current liquidity. Of the $66K in emergency reserves and $85K–$90K you mentioned is ready to be invested — where is that capital currently being held, and what kind of return is it earning? If you don’t have an answer off the top of your head, that’s not necessarily a problem — but it might be a sign you need more clarity on your investment framework before diving in.
One final note — before you make any big moves, I highly recommend reading Real Estate by the Numbers by J Scott and Dave Meyer. It’ll walk through how to align your financial goals with the right metrics and investment decisions. Once those foundational pieces are in place, then members here on BiggerPockets will be able to provide more targeted and helpful advice.- Member since 2022 · 7 posts · 17 votes10mo
@Michael Dumler hi Michael - Thank you so much for spending so much time in writing detailed questionnaire for me :) Would it be okay if I DM you separately?
- Lender · Houston, TX · Member since 2025 · 35 posts · 24 votes11mo
Congrats Joshi! Make sure to analyze deals honestly without hope or any bias. Find a trusted lender who will be objective about your deal if you need a second opinion. Don't trust wholesaler numbers ever. Always run your numbers, and get a second or third opinion if necessary. There are plenty of youtube videos on how to analyze real estate deals. Closer to 70% LTV will always be best, but may not be easy to find in certain markets. Always happy to help. Good luck have fun!
- 11moMarc RiceBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @Yogendra Joshi:
Hello All - I and my wife own a house in Cumming, GA and currently we have 6 months emergency (66k) and currently also sitting on another 85-90k ready to be invested in Real Estate. We always wanted to invest in properties and I have been reading BP forums and some are truthfully awesome stories while some are horrible experiences from first timers.. I would like to understand how can I begin our investment journey- Is it looking for a smaller condo? Smaller house with No HoA? Good schools? Nearby Colleges? How do your decide as an investor if a certain deal is good to go or not.. I know BP has Investor Friendly agents - is that a paid service or just like any other Buyers Agent they assist in finding great investment property deals and due on their commission?
I would really appreciate some guidance here!
Hi Yogendra, as your first investment, I would advise doing some research on different markets and then choose what fits you the best. Speak with the local agents to get a better idea of the market
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews - New to Real Estate · Memphis, TN · Member since 2022 · 95 posts · 71 votes10mo
Yogendra what a great position to be starting from! Absolutely continue to scavenge the forums and ask as many questions as possible. What are you looking to accomplish by investing in real estate? Because this will dictate what a "good deal" is to you.
- 10moBill HamptonBusiness MemberAccredited Investment Fiduciary, AIF®, Financial Planner, Tax Strategist, Real Estate Investor · Atlanta, GA · Member since 2012 · 2k+ posts · 979 votes
Check out the Georgia Real Estate Investors association, gareia dot com, for local education and networking.
I am in the Atlanta area. Happy to answer any questions. Good luck.
Hampton Tax and Financial Services LLC4.7106 Reviews- Member since 2022 · 7 posts · 17 votes10mo
@Bill Hampton Hello Bill - My question to you would be what are your picks for SFH in North Atlanta? I live in Cumming/Alpharetta area and prices here have shot up crazily over the past few years... I was wondering if Kennesaw/Athens/Acworth areas would be good bet? I am keen for these areas considering strong student enrollment in KSU and UGA but I dont know if renting to students as my first rental would be safer option as they may not yet have any good credit and criminal history and stuff? What is your guidance here? Also what areas shall I focus for renting to families? I have a budget around 350-400k and can go upto 450k max.. Also, have you had any experience doing out of state rentals specifically in areas like Ohio? How do you manage those while living in ATL?
- 10moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Yogendra Joshi:
Hello All - I and my wife own a house in Cumming, GA and currently we have 6 months emergency (66k) and currently also sitting on another 85-90k ready to be invested in Real Estate. We always wanted to invest in properties and I have been reading BP forums and some are truthfully awesome stories while some are horrible experiences from first timers.. I would like to understand how can I begin our investment journey- Is it looking for a smaller condo? Smaller house with No HoA? Good schools? Nearby Colleges? How do your decide as an investor if a certain deal is good to go or not.. I know BP has Investor Friendly agents - is that a paid service or just like any other Buyers Agent they assist in finding great investment property deals and due on their commission?
I would really appreciate some guidance here!
Most people say read a lot of books, but the best way is to be pro-active. Choose a solid market in the midwest with tech growth and people re-locating. Find good value-add / brrrr deals. You can learn mostly through an investor agent (agent tool) and get resources and deal flow from them. Connect with good hard money folks/dscr lenders, contractors, and property managers. THEN you are set!
ReafCo | Ahmed Group 534 Reviews - 10moSam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
Quote from @Yogendra Joshi:
Hello All - I and my wife own a house in Cumming, GA and currently we have 6 months emergency (66k) and currently also sitting on another 85-90k ready to be invested in Real Estate. We always wanted to invest in properties and I have been reading BP forums and some are truthfully awesome stories while some are horrible experiences from first timers.. I would like to understand how can I begin our investment journey- Is it looking for a smaller condo? Smaller house with No HoA? Good schools? Nearby Colleges? How do your decide as an investor if a certain deal is good to go or not.. I know BP has Investor Friendly agents - is that a paid service or just like any other Buyers Agent they assist in finding great investment property deals and due on their commission?
I would really appreciate some guidance here!
Lots of ways you can do about it, but with 90k for investing I would stick with around 300k Purchase Price. You could go higher with 20% down, but most of the time you'll see 25% down options are better. The remaining 15k will be for closing costs and emergency funds for your property in case the roof needs replaced, furnace/AC go out, etc. Or in case of extended vacancy
My first piece of advice is to invest close to home. This will build confidence, get you familiar with investing, property management (and saving on that cost), etc.. I would 100% recommend SMF opposed to anything else, especially large multifamily. But SMF over SFH 7 out of 7 days of the week. IMO. Let me know if you have questions!
Sam McCormack Realtor - 10moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
@Yogendra Joshi some random info to think about:
1) Most agents are actually commission-friendly, with less than 5% actually being investor-friendly.
- An investor-friendly agent should own rentals and fully understand our investor lingo!2) Try to invest locally. Investing out of state is risky and you should learn more locally before trying OOS.
3) Condos can be risky. HOA fees & special assesstments can kill cashflow. Many have investor limits and specific rental requirements. Also, one HOA Board meeting vote can change everything for rentals:(
4) Recommend focusing on Class B properties for you first purchase. Class A won't cashflow for 3-5 years. Class C is too risky for newbies. Class B may take 1-3 years to cashflow, but will be a good learning experience and you won't be in over your head.
You should be running numbers on properties to familiarize yourself with the process and what works.
Pick out 2-3 (no more!) Class B Neighborhoods to focus on and learn them well. This will allow you to act fast if you find a deal.
Even if you plan to pay cash, get preapproved by a lender familiar with rentals. You never know...
Find local and online RE investor groups where you can network and accelerate your learning.
Good luck in the New Year!
Logical Property Management4.9462 Reviews- Member since 2022 · 7 posts · 17 votes9mo
@Drew Sygit Thanks Drew - How do you know if a property is Class A, B or C?
- 9moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Yogendra Joshi:
@Drew Sygit Thanks Drew - How do you know if a property is Class A, B or C?
Here's some copy & paste advice you might find useful:
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
FICO Score
Pct of Population
Default Probability
800 or more
13.00%
1.00%
750-799
27.00%
1.00%
700-749
18.00%
4.40%
650-699
15.00%
8.90%
600-649
12.00%
15.80%
550-599
8.00%
22.50%
500-549
5.00%
28.40%
Less than 499
2.00%
41.00%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
Logical Property Management4.9462 Reviews
- 10moPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Yogendra Joshi
Reading through the forums is good because you can learn from others' mistakes or more than likely, you can find an answer to a question you have. I would recommend avoiding condos if possible because you have no control over the variable condo fees, which could double or at least significantly increase, and that could evaporate cash flow as well as condo associations making rentals no longer allowed. It's pretty hard to own a rental that you can't rent out - Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes9mo
@Yogendra Joshi, just seeing this now — absolutely, feel free to send me a message. Looking forward to connecting!
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes9mo
Hi Yogendra,
I'd start by getting really clear on your goals, cash flow, long-term appreciation, house hacking, BRRRR, etc. Then spend some time researching markets and learning how to analyze deals so you can identify properties that make sense. If you want extra guidance, working with an investor-friendly agent can be very valuable, especially one who understands first-time investors and can help you spot opportunities while avoiding common mistakes.
Best of luck!
- 9moTre DeBragaPro MemberReal Estate Agent · Worcester, MA · Member since 2022 · 112 posts · 49 votes
welcome to BP!
First of all what I would get down is your investment strategy, whether thats BRRR, value add multis, house hacking, regular SF rentals, Flips, etc.. Do your research on all these methods. choose one then start analyzing deals from there. You seem to be in a position that most methods can work. Bigger pockets has a deal analyzer calculator you can run numbers on.Deciding whether or not something is a good deal or not really depends on what your goal is.. Do you need cashflow? are you looking for long term appreciation? are you looking to scale fast?
This is why I would really narrow down what method you want to use and a gameplan for that and go from there.
I would get out to real estate meet ups in your area and talk to other investors and ask for advice on investing strategies they are using and agents they are using.
The Investor friendly agents through BP would work like any other Buyer agent.
hope that helps. - 9moMarc RiceBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @Yogendra Joshi:
Hello All - I and my wife own a house in Cumming, GA and currently we have 6 months emergency (66k) and currently also sitting on another 85-90k ready to be invested in Real Estate. We always wanted to invest in properties and I have been reading BP forums and some are truthfully awesome stories while some are horrible experiences from first timers.. I would like to understand how can I begin our investment journey- Is it looking for a smaller condo? Smaller house with No HoA? Good schools? Nearby Colleges? How do your decide as an investor if a certain deal is good to go or not.. I know BP has Investor Friendly agents - is that a paid service or just like any other Buyers Agent they assist in finding great investment property deals and due on their commission?
I would really appreciate some guidance here!
Are you interested in out of state investing as well? You should then start researching different markets before you plan what kind of property you should buy. For the first investment, it's always better to start with the market you're in.
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews- Member since 2022 · 7 posts · 17 votes9mo
@Marc Rice thanks Marc - Like you suggested, our primary goal is to get first property in our area so we understand the day to day operations of being a local landlord and then scale out of state.
- 9moEric FernwoodBusiness MemberRealtor · Las Vegas, NV · Member since 2014 · 1k+ posts · 1k+ votes
Hello @Yogendra Joshi,
Congratulations on having an emergency fund in addition to a real estate investment fund.
On Getting Started
I recommend starting with your end goal and working backward. In this post, I'll assume your goal is long-term financial independence.
Many people mistakenly ask, "How much do I need to retire?" But that's the wrong question. You don't spend a lump sum—you spend monthly cash flow. The right question is: "How much monthly cash flow will I need to maintain my current standard of living?"
Also, prices continuously rise due to inflation, so your rental income must grow faster than inflation to maintain purchasing power. For example, suppose you need $5,000 per month today to maintain your current lifestyle. If inflation averages 5% annually, how much will you need in 10, 20, or 30 years for the same lifestyle?
- 10 years: $5,000 x (1 + 5%)^10 ≈ $8,144/Mo
- 20 years: $13,266/Mo
- 30 years: $21,609/Mo
Even though the dollar amount increased, the purchasing power—the amount of goods and services those dollars can buy—remains the same.
Rent growth isn’t a property feature—it’s determined by the city where you invest. Think of the city as a harbor and rents as boats floating in the harbor. When the tide comes in (population and personal income increase), all boats rise (rents and prices increase). When the population growth is static or declining, rents (and prices) stagnate or fall.
So, my recommendation is to start with cities with metro populations over 1 million and consistent, significant population growth. Wikipedia. Larger cities with solid infrastructure and local workforces are more attractive to employers.
Next, eliminate any city that does not also meet the following.
- Low Operating Costs: High operating costs can turn a profitable property into a money pit. Consider property taxes and insurance. Insurance - ValuePenguin, Metro Property Taxes - LendingTree
- No Rent Control: Rent control may prevent you from increasing the rent fast enough to keep pace with inflation. It may limit your property manager's ability to select the best tenant. It may make evictions of non-performing tenants difficult or impossible. Never invest in any location with rent control.
- Rising personal income: you're making a 20 to 40-year investment. Rents cannot increase over the long term unless personal incomes in the city are rising. For example, here is a Federal Reserve chart showing personal income growth in Clark County, Nevada (Las Vegas).
- Local Investment Team: While general knowledge from seminars and books is helpful, local expertise is crucial for specific purchases. Only an experienced local investment team can provide the resources and knowledge you'll need.
Your Target Tenant Segment Defines the Property
While the city defines long-term financial performance, the tenant who occupies your property defines income reliability. Remember: properties don't pay rent—tenants do. You need your property to be continuously occupied by a tenant who stays for many years, pays rent on time, and takes care of the property. Interview property managers to find out which tenant segment is most likely to do this.
Once you identify this segment, determine what and where this segment currently rents. Then, buy similar properties. Don't let your feelings or other people's opinions guide what you buy. Your goal is long-term financial independence, so buy properties that attract tenants with the financial behaviors you need.
FERNWOOD Team, KW VIP Realty520 Reviews
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