California or Louisiana? property management franchise?
Hello all,
Firstly, I am a pure newbie when it comes to investing. My wife and I have about $300k to put down on a multi-family complex. This will probably afford us a $1 - $1.2 million deal according to a banker friend I've talked to. I live in Southern California, but grew up in Louisiana. I'm thinking about pursuing something in Baton Rouge, since I've lived there for 13 years of my life and have a few real estate connections. Plus, I could easily get a decent 20-32 unit complex for that price in Baton Rouge or New Orleans but in Los Angeles that would barely afford me a decent 12 unit from what I've been seeing (I could be wrong :)). We do not plan on buying anything under 16 units at this time since we are "cash flow" focused.
I am also very familiar with the geography and demographics of both Los Angeles County and Southern Louisiana. Both Baton Rouge and New Orleans are growing in population because of process plant and refinery expansions. Plus, New Orleans tourism is at an all-time high. However, I live in Los Angeles so I would be giving up the chance to manage the property locally vs. having a property out of state that would surely need outside management, which brings me to my next question.
This idea of investing in a property management franchise has crossed my mind.
My wife and I would hire a manager for the company and I would shadow them to learn the industry. Would this be a good long term investment? I'm thinking this investment could bring us leads on new investment opportunities, create networking connections and also show us the business so we could eventually do it ourselves.
Also, the statistics show that the majority of these companies usually at least break even after the first year. Are those stats reliable? Would this be a good investment considering we do have the available capital and as long as we broke even it would not hurt us financially?
Thanks,
DJ