Newbie from Northern VA (NOVA) / DC Metro

14 Replies

Hello, I'm a new investor from the NoVA area. I just closed on my first investment property in Tampa, FL (20k Down, 5k closing, 80k price). I am saving up cash as I work a full time job to build my portfolio. I was thinking of investing in the Dallas, TX area (turn-key or rehabs) but would prefer to invest in a county that I can drive to near NOVA (anywhere within 3 hours drive). My strategy is to invest in SFH or multi-units valued between 40-100k hoping to follow the BRRRR strategy.

My biggest issue is finding a market that fits that price range and contains good rentals. I was thinking Philadelphia / Baltimore / Richmond? Let me know if anyone has any suggestions!

Welcome to BP @Joseph Bisaillon . Cheaper isnt always better.  I invest primarily in the DC metro area, and I do pretty well right here.  There are plenty of people who do invest in areas like Baltimore that are cheaper.....but I think that is just a mirage that people are drawn to.  These ultra cheap markets carry quite a bit of risk. I am very risk averse, so I prefer to invest in the safer DC market and it's suburbs.

Originally posted by @Russell Brazil :

Welcome to BP @Joseph Bisaillon. Cheaper isnt always better.  I invest primarily in the DC metro area, and I do pretty well right here.  There are plenty of people who do invest in areas like Baltimore that are cheaper.....but I think that is just a mirage that people are drawn to.  These ultra cheap markets carry quite a bit of risk. I am very risk averse, so I prefer to invest in the safer DC market and it's suburbs.

Thanks @Russel Brazil ! I would strongly consider investing in the DC area. But, the cost to entry right now is way past my starting capitol. I think after I gather a few "cheaper" properties I may one day trade those out for less risky property in the DC metro area. I can do a FHA loan in the DC area for my personal property. I would love for my primary to be a multi-unit but the inventory is just so unbelievably low.

I've got to disagree that price point is an entry barrier in the DC market. Is $20,000 too expensive of an entry point? There are properties priced like that in the DC area. I'm not advocating buying them, but they are there.....and many investors are buying them. There are properties a fraction of even that price point within a short drive of DC. The difference is you are close to those properties and can see the risk involved in investing in them. The risk is still there at that price point in cheaper parts of the country, but those being hundreds of miles away prevents you from seeing that risk with your own eyes.

Now I don't buy ultra cheap properties like that, my cheapest is $103,000. I hardly think even investing in that price point is a hard barrier to entey.

Welcome to BP Joseph! I currently invest in Baltimore and there are many different areas within Baltimore that would meet your price range. I currently have three buy and holds in three different areas of Baltimore. The first property I purchased for $100,00 ($10K in repairs) that rents for $1550. The second I purchased for $103,000 (Turnkey) rents for $1475. The third I purchased for $35,000($2k in repairs) rents for a $1000. The first two properties are in working class neighborhoods. The third is in a section eight neighborhood within 2 miles of a hospital and the tenants both work at that hospital. I have three more properties that are currently under contract. Two of them are both around $75,000 that I am using the BRRR method that will probably rent for around $1400. The third is a flip that is being purchased for $50,000 with estimated $40,000 rehab and a estimated ARV of $145,000.

Most of these properties are foreclosures.

Joe

Welcome Joseph! There are some great neighborhoods in Baltimore for buy-and-hold investors following the BRRRR strategy, but there are also some neighborhoods where the cash flow numbers look great, but you'll have trouble on the refinance "R" because of the quality of the homes and low comparable sales. Where ever you decide to invest I suggest you get a strong local advocate to work with you. Good luck!

Welcome to BP @Joseph Bisaillon

There are certainly places within driving distance of NOVA that meet your criteria. Baltimore is one.

I would not be buying in TX if you live here and have a unit in Tampa. Stick to a market that you can learn inside and out. The more you spread yourself out the less you will know about each market. The best deals and the lowest risk comes to those that know the market best.

Hey Joseph,

   I agree with @Russell Brazil , I think that investing in your backyard is the one of the best strategies to mitigate risk.  I also agree that buying the cheapest property isn't always the best.  I have bought both cheap and expensive property, and most of the time there is a sweet spot.  Find the Frickin Sweet spot and you can make some money.  Not too cheap and too fancy.

@Joseph Bisaillon

Welcome aboard the vibrant BP community. You already have some experience and with additional effort, will quickly climb the REI ladder to its pinnacle.

To be more successful, you simply have to work on the other elements to progress your REI pursuit. Below are some quick links to get engaged on this site.

REI books suggested by BPers

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Simply, bone up on the areas that you need to expand knowledge in such as, Forums, Marketplace, Learn, Network, Analyze and Resources.

Feast on the Podcasts, #askbp Podcasts, blogs and webinars

Lastly, this site thrives on interactions and as such we encourage two way exchanges and look forward to educational and thought provoking ideas relevant to REI.

I agree @Ned Carey , I think my best option is to stick to market close to me. Baltimore right now is on the top of my list. Hopefully in the coming months I will have a better handle on the area and it's opportunities, thanks for the insight!

Agree to stay close to home. I liquidated when I moved across state lines. By the time I was selling off, the buyer was calling me, before the sale, complaining of squatters and all sorts of shenanigans I couldn't (cheaply) mitigate from afar. Thankfully he still purchased the entire group and set me free. Now I'm starting over older and wiser.

@Joseph Bisaillon it looks like you're off to a great start!  I'm with others that say stay close to home.  I Live in Plant City so my perfect world is having my rentals from Brandon to Lakeland.  Right now the Brandon area has become pretty competitive so I've moved my focus to Lakeland.  For the brrrr method connecting with a wholesaler will be your best bet.  

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