Where to start

Question

Hey, I am brand new but excited. It seems like the general consensus for all the successful investors that come on Bigger Pockets Podcast is to "jump right in". Currently I am in a market that I know little about and trust even less.. St. Louis, MO. So naturally, it is difficult to be jumping into anything. What are some best practices to follow when looking to invest in an area you have little confidence in. What is a good price range to target for your first purchase? Ideally, I think I would want to buy and rent out for my first but that is not set in stone. Just want to get started but don't have a good plan to begin with. All advice is welcome.

Regards,

J

Regards,

J

Mackal Smith · Answer

@John L HerzigWelcome to BP John. I'm a big fan of South City also. I have a number of properties there and in fact have contracts on a couple more as I sit here and write this response. I would say however that probably the most important thing is to make sure you have some education about what makes a good deal. Spend enough time in the forums that you can make a good decision about what the real cap rate and the return you want on properties you are evaluating. Then find an investor friendly realtor that can show you some properties down there. Make sure it is someone that knows the area. There are a number of them right here on Bigger Pockets.

Jumping in doesn't necessarily mean buying something right off the bat. You can jump in by looking at numerous properties, evaluating them according to your criteria, and getting to know the area. No need to rush in. I'm happy to share with you the criteria I use to evaluate properties and if you find something you want to move on and are unsure, I would be happy to talk to you about it.

There are a lot of great people here on BP almost all of them willing to help. Good luck. Just remember jumping in can mean doing your homework. Don't commit money until you are ready and know the area...

my $.02

- mac

Peter MacKercher · Answer

@John L HerzigHey John, welcome to BP and to St. Louis. The best advice you can get about St. Louis is to take your time and learn the area. As everyone will tell you, it varies a great deal, often block to block. Investing here is hyper-localized so it can take time to pick an area and investment property that works for you.

Prices are, of course, based on the area you're targeting. I'd say something between $100-$150k is a reasonable range for South City. The ROI you'll see on those numbers will change based on a number of factors, like different tax rates for different zip codes which can affect the ROI from two properties a mile away from each other.

There's a decent amount to consider but I love investing in South City, which is why my investing focus has been in this area. If you'd like help or more advice don't hesitate to reach out.

Cheers!

Yolanda Smalls · Answer

Thank you very insightful lots of useful information. Thank you for giving me a place to start.

Paul Timmins · Answer

@John L Herzig

Welcome. Fill in the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses,  The Book on Estimating ReHab Costs  http://www.biggerpockets.com/flippingbook

Consider checking out HUD homes for small multi's owner occupied gets first crack.

Go to IREM.org search for ARM certified property managers. Call 5 ask them what they see expenses running per category per unit. What do they see them selling for per unit, what is the market occupancy rate. What are the market rents? Ask them if they know anything coming up for sale. Great way to pick up some good info and possibly a deal.

To find out about an area go to loopnet.com search St Louis for properties pull 5 property packages find the 5 pages in each that talk about it being the best market in the US copy and paste into a word doc these are your talking points.

You can also search NARPM.org for the RMP (Residential Management Professional) and MPM (Master Property Manager) certified.Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul

Jeff R. · Answer

the gentlemen above make great points....

John, do you know if you want to deal with multi-family or single-family homes?

Also, you mentioned what's a recommended range? That's kind of hard to say. Also, do you think you want a near turn key/turn key property or one you may have to do updates?Do you have an amount that you are comfortable with investing? I'm just throwing some questions out there to get you thinking:)

John L Herzig · Answer

All sound advice Peter and Mac. I appreciate the offers and I will likely take you up on the offers in the not so distant future.  I guess the take-away is St. Louis is extremely localized and not any one area is booming or busting.  Sounds like there is a lot of leg work of going and looking at houses with an agent I trust (being new that is a challenge).  But all good.

Best way to start is to keep learning right?  Any advice for a newbie on St. Louis laws for rental properties? Not sure what I am asking but if there is a good couple books, seminars, people to talk to I'd love a starting point.

Br,

-J

John L Herzig · Answer

Hi Jeff.  I Moved here in September so I'm not familiar with all the areas but a general area I'd say is south of town. Lafayette Square, benton park.. I hear Cherokee street is a rebounding area as well with some potential.

-J

Jeff R. · Answer

what parts of STL are you comfortable in investing?

Where to start

Most Popular Reply