New to Real Estate Investing

6 Replies

@Emmanuel Cedeno the market is pretty high, and there's a lot of interest in wholesaling from new investors so there's more competition out there and it can take more time and effort to find a deal. However, if you do manage to get something under contract it should be fairly easy to find a buyer. Because the market is tight, buyers are willing to look at "ok" deals that they might have passed on 6 years ago. So I'd say, if you're going to go down the wholesale route, commit to at least several months of effort using multiple marketing methods.

For buy and hold rental properties, again the market is high so it can be challenging to find something where the #s work well and there's decent cash flow. But if you have no experience at all, then I'd recommend buying a 2, 3, or 4 family property, living in one of the units and renting the rest out. You have to live somewhere anyway, and this way you can start to learn the rental business and help offset some or (the holy grail) all of your personal living expenses with rental income.

But don't be romantic about it, owning rental property is work. It's definitely not sitting back and collecting checks. However if you're committed to learning the business (and that's what it is, a new kind of business for you to learn), then you can do well with it over time.

"Best" areas are very subjective, just like "worst" ones are. Common "great" areas include the East Side of Providence, Newport, Portsmouth and Jamestown, however you may struggle to find rental properties in those areas at all, and all properties in those areas are priced accordingly since their main buyers are owner occupants who know they are buying in great areas with great schools and are willing to pay for that.

There are good neighborhoods and bad neighborhoods in every city/town. I think you should narrow your focus due to more personal factors, for example I always recommend buying a property within 15-20 minutes of where you live, even if you have a property manager, simply because you'll be over there more than you expect and you'll want to easily check on it. (And if you're just starting out I think you'll learn a lot more if you manage it yourself, even if it's just for a year, since it will let you "manage the manager" much better if you ever decide to hire someone.)

Besides being close to where you personally live or spend most of your time, there are probably budgetary considerations so you should talk to a good mortgage person and/or real estate agent to see what you can realistically afford. You may be able to cross off some areas just from setting a price maximum based on your personal financial situation. You may also have other personal concerns such as wanting to stay close to family members, schools if you have children, accessibility if you have older relatives living with you or visiting often, etc.

There are a lot of factors that go into choosing a property, especially if you personally are going to live in one of the units, so I do recommend starting out with a good real estate agent to start to list out those factors. The "best" area for me might not be the best area for you or someone else.

Originally posted by @Anthony Thompson :

@Emmanuel Cedeno the market is pretty high, and there's a lot of interest in wholesaling from new investors so there's more competition out there and it can take more time and effort to find a deal. However, if you do manage to get something under contract it should be fairly easy to find a buyer. Because the market is tight, buyers are willing to look at "ok" deals that they might have passed on 6 years ago. So I'd say, if you're going to go down the wholesale route, commit to at least several months of effort using multiple marketing methods.

For buy and hold rental properties, again the market is high so it can be challenging to find something where the #s work well and there's decent cash flow. But if you have no experience at all, then I'd recommend buying a 2, 3, or 4 family property, living in one of the units and renting the rest out. You have to live somewhere anyway, and this way you can start to learn the rental business and help offset some or (the holy grail) all of your personal living expenses with rental income.

But don't be romantic about it, owning rental property is work. It's definitely not sitting back and collecting checks. However if you're committed to learning the business (and that's what it is, a new kind of business for you to learn), then you can do well with it over time.

"Best" areas are very subjective, just like "worst" ones are. Common "great" areas include the East Side of Providence, Newport, Portsmouth and Jamestown, however you may struggle to find rental properties in those areas at all, and all properties in those areas are priced accordingly since their main buyers are owner occupants who know they are buying in great areas with great schools and are willing to pay for that.

There are good neighborhoods and bad neighborhoods in every city/town. I think you should narrow your focus due to more personal factors, for example I always recommend buying a property within 15-20 minutes of where you live, even if you have a property manager, simply because you'll be over there more than you expect and you'll want to easily check on it. (And if you're just starting out I think you'll learn a lot more if you manage it yourself, even if it's just for a year, since it will let you "manage the manager" much better if you ever decide to hire someone.)

Besides being close to where you personally live or spend most of your time, there are probably budgetary considerations so you should talk to a good mortgage person and/or real estate agent to see what you can realistically afford. You may be able to cross off some areas just from setting a price maximum based on your personal financial situation. You may also have other personal concerns such as wanting to stay close to family members, schools if you have children, accessibility if you have older relatives living with you or visiting often, etc.

There are a lot of factors that go into choosing a property, especially if you personally are going to live in one of the units, so I do recommend starting out with a good real estate agent to start to list out those factors. The "best" area for me might not be the best area for you or someone else.

 ****. @Anthony Thompson with another super thorough answer. I can't add anything. 

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