New comer on the blog and at real estate investing! I am listening to podcasts one by one and reading blogs, so many great minds and experience here in one place! Real pleasure to listen/read.
NJ/NY areas, being notoriously pricey, I am trying to see if anyone has any advice for a first investment for about 30K in down payment available.
I have been reading about HUD homes as an option, and foreclosures as well, however I'm not sure about foreclosures as a first home investment..
Also, due to better pricing in other areas, turn key in another part of the country is intriguing. I was looking at REI nation and other companies like Memphis Invest and similar and reading blogs about them.
Although I am leaning towards purchasing locally to gain some hands on experience, I am deterred from the high prices in my area. I would appreciate getting some thoughts and opinions from all you pros out there.
Rental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
6y
@Vee Turato First, welcome to BP. You are right that it is an amazing community with a ton of wisdom. I did what you did about 3 years ago and then went into action and now have 9 properties. I am a huge fan of turnkey companies if they are well vetted and have all my investments out of state because I live in California and couldn't afford a place for investments here. More importantly, I have become aware last year that many people are asking what you are asking in your post. That's why I created the "IDEAL Wealth GROWER" system or IWG for short. It is a mentoring program as well as a resource provider for people who like to join with me in investing in Turnkey properties away from home.
The IWG system is pretty narrow (some people call that a "niche" in marketing). I am only investing in residential real estate from single-family homes to four-plex. My current portfolio actually only has single-family homes.
The whole idea of this learning, resource sharing, and mentoring program is to save time and benefit from lessons learned. I am still listening to podcasts, participating in BP forums, read as much as I can and keep a close eye on the market. In addition, I am in touch with all the providers I have developed relationships with. See I use, for my own investments, a nationwide lender. My mentoring clients, when they join IWG, get introduced by me to the president of the lending company in a three-way call and then the client decides if you want to use my lender of rather find your own. Same for insurance. Same for turnkey providers. I introduce you to the ones I have and that manage my properties.
I very well recall how it felt for me when I wanted to start and I afraid to make mistakes with my hard-earned money. This is not a message trying to sell you on anything. I offer anybody interested in a complimentary phone conversation for 30-60 minutes to discuss your goals and if what I offer is suitable and you might like to join the IWG program, you are very welcome. If you like to take me up on that, just send me a PM and we find a time and day to speak.
2 quick things regarding your point about REI and trying to invest near home:
1. REI and Memphis Invest is the same company. Memphis Invest has been around for a very long time and has become the gold standard in turnkey providers. Over the years they have started offering properties for their investors in several locations, like Dallas, Houston, St. Louis, etc. The name probably got a little confusing when you decided to buy an investment property from them in Dallas but they were called Memphis Invest so they recently changed their name to be more including. it's the same team and the same company and you will find a lot of valuable content and responses from one of their founders, Chris Clothier on BP.
2. You were asking the question of what you could do with about $30K as a downpayment for investments. As you know from the podcasts and most other credible sources, there are a bunch of criteria that go into the selection of a property. Many are similar for a property you would aim to occupy yourself but there are a few that are different for investment purposes. One thing we really focus on in the IWG program is "performance". If you have a property in your area, let's say 3 bed/2bath and 1400 sqft that costs you $340K to buy, you would have to put about $68K down + closing costs. You can find that same property for $85K in another location away from your home area. A property with high performance, all other criteria being equal and meeting your standards, would pay you $850/month in rent. For the property in your area to "perform" at the same level, you would have to collect $3400/month in rent. Often times that's not possible. The balance between the purchase price and rent is not as good. Instead of asking what you can get for $30K, you want to figure out what performance you would be looking for. I can explain more when we talk (if you like), but that's a small example of how the IWG system educates you to look for the right things and apply the right criteria to make the best decisions for you and your money.
I hope this helps a little and if you like, I hope you reach out/PM me and we can talk.