Posting for beginner investor investing@@@
Member since 2025 · 4 posts · 10 votes
Posting for beginner investor investing@@@
Most Popular Reply
G. Brian DavisPro Member
Investor · Hatboro, PA · Member since 2016 · 2k+ posts · 844 votesWelcome @Alberto Gutierrez! You're in the right place.
In my 20s, I invested every dollar I had in rental properties, but I didn't get a mentor or coach and made a bunch of expensive mistakes. On top of all that, I realized I hated being a landlord.
I unloaded all of my rentals in 2018 and today I invest passively as part of a co-investing club. We meet every month, vet a new investment together, and any members who like it can invest with $5K.
Having 50 sets of eyeballs on an investment really helps with analyzing risk. It also helps to spread smaller amounts across more investments.
Just some food for thought, stuff I wish I knew when I was younger. Keep us posted!
18 Replies
- 11moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 906 votes
Welcome Alberto, great to see your excitement and drive to build something long term. Many investors from California are starting to look out of state for the same reason, affordability and stronger cash flow. The Midwest has been performing really well for rental growth and steady returns, with lower entry costs compared to coastal markets. Feeling nervous at first is completely normal, but you’re already ahead by learning and connecting here. Are you leaning toward starting with single family homes or small multifamily properties?
- 11moJoey BanasihanPro MemberInvestor · Boise, ID · Member since 2019 · 233 posts · 188 votes
Greate work making this post @Alberto Gutierrez, its small actions like this that have the potential to create massive change in your life - so kudos. If you ever want to talk about Boise and investing in this area, I've been doing so for several years and helping new investors do that same. Regardless, keep taking small actions, have conversations, meet agents/lenders, ask questions - but always be willing to take reasonable action and reasonable risk - do this over and over again and it can truly change your life, it has for me!
- 11moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
Quote from @Alberto Gutierrez:
Hello everyone I’m a new member, just wanted to come on here and post. I am a beginner investor I guess you can say. I got into this since I’ve been small I always wanted something better for myself and I know real estate is the way. I got involved with BiggerPockets watching videos since I was in highschool but got onto here, because one of the lenders I use showed me this format. I am looking at investing out of state I currently live in California at the moment with one rental here but want to build a rental business out of state like in Texas since here in California has gotten to expensive for me. I am excited for this new adventure and to be honest scared, but I can’t let that be a distraction.
thank you again for reading my post.Hey Alberto, welcome to BP! Congrats on wanting to get started in real estate investing, and looking out of state. I would highly recommend looking into the Midwest market, as there is some great opportunities for cash-flow and appreciation-making it an easier market to enter. After doing some research on which place you might want to invest in, I would figure out where and build a CORE 4 with a great realtor, contractor, property manager, and attorney.
Kerlous Tadres | Reafco Real Estate539 Reviews - Memphis, TN · Member since 2024 · 180 posts · 223 votes11mo
Hey Alberto,
Welcome to BiggerPockets! Glad you’re here - I totally get what you mean about California getting expensive. A lot of investors I talk to are in the same boat and end up building their portfolios out of state.
If you haven’t looked into it yet, check out Memphis. It’s been a great market for out-of-state investors - low entry points, strong rental demand, and solid property management options. It’s honestly one of those markets where you can still find real cash flow.
Excited for you to get started - you’re in the right place!
Best of luck!
- 11moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
How much do you know about Property Classes?
Recommend you spend some time learning about them, so you don’t mistakenly buy a property that will NEVER meet your expectations!
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.
Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying.
Horror Stories:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
Logical Property Management4.9451 Reviews - 11moG. Brian DavisPro MemberInvestor · Hatboro, PA · Member since 2016 · 2k+ posts · 844 votes
Welcome @Alberto Gutierrez! You're in the right place.
In my 20s, I invested every dollar I had in rental properties, but I didn't get a mentor or coach and made a bunch of expensive mistakes. On top of all that, I realized I hated being a landlord.
I unloaded all of my rentals in 2018 and today I invest passively as part of a co-investing club. We meet every month, vet a new investment together, and any members who like it can invest with $5K.
Having 50 sets of eyeballs on an investment really helps with analyzing risk. It also helps to spread smaller amounts across more investments.
Just some food for thought, stuff I wish I knew when I was younger. Keep us posted!
- Member since 2025 · 2 posts · 1 vote11moHi Brian, I am also super new and looking for guidance/mentorship on real estate investing. What are your thoughts on property management companies? Have you had good experiences and whats the average percentage of the monthly renter payments do they take?
Quote from @G. Brian Davis:
Welcome @Alberto Gutierrez! You're in the right place.
In my 20s, I invested every dollar I had in rental properties, but I didn't get a mentor or coach and made a bunch of expensive mistakes. On top of all that, I realized I hated being a landlord.
I unloaded all of my rentals in 2018 and today I invest passively as part of a co-investing club. We meet every month, vet a new investment together, and any members who like it can invest with $5K.
Having 50 sets of eyeballs on an investment really helps with analyzing risk. It also helps to spread smaller amounts across more investments.
Just some food for thought, stuff I wish I knew when I was younger. Keep us posted!
Thanks,
Tyler - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes11moNew and getting started - Decide if you want to use creative financing to buy property. You need half as much when you don't use banks.
Quote from @Tyler Freeman:
Hi Brian, I am also super new and looking for guidance/mentorship on real estate investing. What are your thoughts on property management companies? Have you had good experiences and whats the average percentage of the monthly renter payments do they take?Quote from @G. Brian Davis:
Welcome @Alberto Gutierrez! You're in the right place.
In my 20s, I invested every dollar I had in rental properties, but I didn't get a mentor or coach and made a bunch of expensive mistakes. On top of all that, I realized I hated being a landlord.
I unloaded all of my rentals in 2018 and today I invest passively as part of a co-investing club. We meet every month, vet a new investment together, and any members who like it can invest with $5K.
Having 50 sets of eyeballs on an investment really helps with analyzing risk. It also helps to spread smaller amounts across more investments.
Just some food for thought, stuff I wish I knew when I was younger. Keep us posted!
Thanks,
Tyler
New? Get a Spreadsheet On How To Buy "Off Market" and Sell Using Creative Financing https://www.biggerpockets.com/forums/517/topics/1265876-new-... - 11moG. Brian DavisPro MemberInvestor · Hatboro, PA · Member since 2016 · 2k+ posts · 844 votes
Quote from @Tyler Freeman:
Hi Brian, I am also super new and looking for guidance/mentorship on real estate investing. What are your thoughts on property management companies? Have you had good experiences and whats the average percentage of the monthly renter payments do they take?Quote from @G. Brian Davis:
Welcome @Alberto Gutierrez! You're in the right place.
In my 20s, I invested every dollar I had in rental properties, but I didn't get a mentor or coach and made a bunch of expensive mistakes. On top of all that, I realized I hated being a landlord.
I unloaded all of my rentals in 2018 and today I invest passively as part of a co-investing club. We meet every month, vet a new investment together, and any members who like it can invest with $5K.
Having 50 sets of eyeballs on an investment really helps with analyzing risk. It also helps to spread smaller amounts across more investments.
Just some food for thought, stuff I wish I knew when I was younger. Keep us posted!
Thanks,
TylerHey Tyler, I personally have not had good experiences with property management companies. It's worth adding a caveat there: I mostly owned lower-income properties.
The best PM companies don't work with lower-end properties, because they earn less money on them but have to put in more work to manage them.
Are there good PM companies out there? Of course. But they typically work with higher-end properties.
One more reason why I don't invest actively as a landlord anymore, and stick with passive investments. Often with those, the operator has enough scale that they hire their own employees to manage lower-income units.
- 10moElizabeth BowerPro MemberRental Property Investor · Summersville, WV · Member since 2018 · 22 posts · 7 votes
@G. Brian Davis are you investing through REIT? I've recently stumbled across it and have become interested in whether it's more lucrative than buying properties independently.
- 11moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Alberto Gutierrez:
Hello everyone I’m a new member, just wanted to come on here and post. I am a beginner investor I guess you can say. I got into this since I’ve been small I always wanted something better for myself and I know real estate is the way. I got involved with BiggerPockets watching videos since I was in highschool but got onto here, because one of the lenders I use showed me this format. I am looking at investing out of state I currently live in California at the moment with one rental here but want to build a rental business out of state like in Texas since here in California has gotten to expensive for me. I am excited for this new adventure and to be honest scared, but I can’t let that be a distraction.
thank you again for reading my post.Hey Alberto, welcome to BiggerPockets! Totally get where you’re coming from—California has gotten super tough for finding solid cash-flow deals, but it’s awesome that you’re already taking action and looking out of state. If you’re open to exploring beyond Texas, I’d definitely recommend checking out Columbus, Ohio. I actually moved here from Portland back in 2020 to start investing and now own 10+ rentals. The market here has been blowing up with strong population and job growth, and tons of big companies like Intel, Amazon, Google, Facebook, Microsoft, Honda, and LG investing heavily in the area. Even with all that growth, the price point is still really affordable, and you can still find properties in the $120K–180K range that hit the 1% rule and cash flow right away. It’s also super landlord-friendly and has great appreciation potential. Don’t let the fear stop you—you’re already ahead of most people by just taking that first step. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 10moBernice RetzloffPro MemberMemphis, TN · Member since 2024 · 234 posts · 100 votes
Hey @Alberto Gutierrez! welcome to the BiggerPockets community!
Really respect that mindset! Starting young, already owning a rental in California, and now thinking about scaling out of state is exactly how many investors build long-term wealth. That mix of excitement and fear is totally normal. It just means you’re pushing into something that’ll help you grow.
You mentioned looking at Texas, which is definitely a solid, landlord-friendly state. but if you’re open to other options, I’d also suggest looking into Memphis, Tennessee. It’s a strong cash-flow market with affordable entry points (you can still find solid homes in the $100K–$150K range), great rental demand, and very investor-friendly laws.
I’m actually a real estate agent based here in Memphis, and I specialize in helping out-of-state investors grow their rental portfolios safely and efficiently. My team at FoundationPM.com handles everything from acquisitions to property management! So you can be completely hands-off while still getting strong returns.
If you ever decide to explore the Memphis market or just want to chat through numbers, risks, or strategy, I’d be happy to help however I can. You’re already way ahead of the game by taking action this earl! keep that momentum going! 💪
- 10moJordan RayBusiness MemberReal Estate Agent · Memphis, TN · Member since 2023 · 623 posts · 321 votes
Quote from @Alberto Gutierrez:
Hello everyone I’m a new member, just wanted to come on here and post. I am a beginner investor I guess you can say. I got into this since I’ve been small I always wanted something better for myself and I know real estate is the way. I got involved with BiggerPockets watching videos since I was in highschool but got onto here, because one of the lenders I use showed me this format. I am looking at investing out of state I currently live in California at the moment with one rental here but want to build a rental business out of state like in Texas since here in California has gotten to expensive for me. I am excited for this new adventure and to be honest scared, but I can’t let that be a distraction.
thank you again for reading my post.Welcome to BiggerPockets! Props to you for already owning a rental in California—that's a huge first step and puts you way ahead of the game. The fear you mentioned is completely normal, but it sounds like you've got the right mindset to keep pushing forward. A lot of California investors in your position end up looking out of state to places like Memphis, where the numbers actually make sense and you can still find properties that hit the 1% rule. Memphis is landlord-friendly, has strong rental demand, and it's one of the few markets where the BRRRR strategy still works perfectly. Hard money lenders here often fund 100% of the purchase and 100% of the rehab, which means most investors are only around $10K out of pocket per deal, making it much easier to scale without tying up all your capital in one property. The real key to doing it successfully from a distance is having local expertise—an investor-friendly agent who also owns rentals and works closely with property managers and contractors so you've got real eyes on the ground watching your investment. That's what keeps things running smoothly and protects your returns. If you'd like, I can share what this process looks like for other California investors who've made the move to Memphis and how they've structured their deals to build steady cash flow and confidence from day one.
Jordan Ray - eXp Realty5110 Reviews - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes10mo.
Quote from @Alberto Gutierrez:
Hello everyone I’m a new member, just wanted to come on here and post. I am a beginner investor I guess you can say. I got into this since I’ve been small I always wanted something better for myself and I know real estate is the way. I got involved with BiggerPockets watching videos since I was in highschool but got onto here, because one of the lenders I use showed me this format. I am looking at investing out of state I currently live in California at the moment with one rental here but want to build a rental business out of state like in Texas since here in California has gotten to expensive for me. I am excited for this new adventure and to be honest scared, but I can’t let that be a distraction.
thank you again for reading my post.
Well. "Will he (the OP) ever return, oh will he ever return, his fate is still unlearned"
Known informally as "Charlie on the MTA" 1959 by the KIngston Trio - 10moJoseph TadresPro MemberReal Estate Agent · Columbus, OH · Member since 2025 · 184 posts · 179 votes
Hey Alberto! Welcome to BP! It's super exciting that you are ready to start looking out of state for investing. I would recommend talking to local agents in different markets to get a feel for each market.
- 10moSamuel DioufBusiness MemberReal Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
Welcome to Bigger Pockets Alberto!
Bigger Pockets is a great place to learn and connect with fellow investors.
If you’re looking to invest long distance, I definitely recommend first identifying a single market you want to invest in, and then putting a heavy focus on building your core-4 team. This team consists of an Investor Focused Agent, Lender, Contractor, and PM.
Read this article on the "core 4". It explains the team that you should develop to have a strong foundation under you while investing remotely.
https://www.biggerpockets.com/blog/core-four-real-estate-team
Reafco - Samuel Diouf528 Reviews - Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes10moHmmm, 1 post 6 days ago, no responses, must be an AI post.
Quote from @Alberto Gutierrez:
Hello everyone I’m a new member, just wanted to come on here and post. I am a beginner investor I guess you can say. I got into this since I’ve been small I always wanted something better for myself and I know real estate is the way. I got involved with BiggerPockets watching videos since I was in highschool but got onto here, because one of the lenders I use showed me this format. I am looking at investing out of state I currently live in California at the moment with one rental here but want to build a rental business out of state like in Texas since here in California has gotten to expensive for me. I am excited for this new adventure and to be honest scared, but I can’t let that be a distraction.
thank you again for reading my post. - Specialist · Member since 2025 · 483 posts · 270 votes10mo
Welcome to the journey—fear's normal, action beats it. Since California's tight, pick one Texas metro and lock a simple buy box: property type, price range, target rent, year built, and return floor. Build your core four first (agent, lender, PM, contractor), then run my noise‑to‑numbers scan daily: pull five listings, estimate rent with PM comps, stress taxes/insurance/repairs, and make one offer a week. Start with a clean, rent‑ready SFH or small duplex in B/C areas to get a quick win; house hacking or turnkey can work if the PM is strong. Get preapproved now, verify landlord rules, and prioritize roofs, HVAC, plumbing, and foundation on inspections. Keep it boring, cash‑flowing, and repeatable.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.