Menlo Park, CA · Member since 2017 · 5 posts · 3 votes
Hello everyone!
I'm new here in the BP community and I already love it! I moved from Italy (where I already invested in real estate) a couple of years ago and I'd love to start investing here in the USA.
The area where I moved (SF Bay Area) is not what I'm looking for to invest (and not what I can afford for sure), so I'm trying to understand how to invest out of State ( I've already read "Long Distance Real Estate investing").
I have a $50,000 budget, I plan to finance, and I would love to start with a rental property (3+2 SFH, nothing more than cosmetic rehab, good tenants neighborhoods with good schools, in cities with +100,000 population; Kansas City, Indianapolis, Detroit). Any suggestion on other possibilities? Would you look at duplex/triplex?
What would you suggest for my low level of expertise and my initial budget?
Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes
8y
@Marco Paglialunga I have several investors who have purchased 10 year old vinyl villages in the outskirts of Indianapolis for less than $20k out of pocket ($85k-95k purchase price) and rent them for $1,100-$1,200/mo. They generally turn 10-15% annually after financing costs. With your $50k, you could likely purchase 2 homes immediately and build up your reserves to purchase another in a few years. There are not a ton of these deals, but I see at least 3 or 4 each month throughout the year.
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
8y
@Marco Paglialunga I like the Indianapolis and Kansas City markets a lot. I've been active in both for several years and know them well. Both have strong economic and demographic fundamentals (i.e. diverse economies, growing jobs and populations) and for that reason, would put Detroit in the same category. I'd be happy to share my insight and experience in Indy and KC if you'd like.
Rental Property Investor · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
8y
@Marco Paglialunga I second @Judah Hoover comment and would suggest you to start attending your local REIA and other real estate meetups. You will network with local investors, understand what people in your area/tax bracket are investing and start educating yourself in a better way than buying random properties that make sense on paper.
It would also work better if you stated what your investment goals, objectives and constraints are. For instance, everyone says they want cash flow but how much cash flow? By trying to maximize your cash flow you might be taking on risks you might not prefer taking.
Alternatively, you might invest for capital appreciation because you might be in the top most tax bracket. Hence, you will be looking at a diff. set of markets than just cash flowing markets.
All in all, it's not an easy decision to buy the most "attractive at the moment" houses. You will especially be eager because you live in California and see cheaper houses in the other states as super attractive. Be warned! There's a reason why assets in certain markets are priced in a particular way. Doesn't mean the asset/market is bad, it just means you have to analyze what's a good fit for your portfolio and goals.
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
8y
Marco Paglialunga I would not suggest you visit your local Reia. Most likely the group think is to invest locally. I lived in seattle and everyone had it in their head to flip houses. If you are a well paid professional with cash you should be buying cashflowing properties. CA WA areas just don’t have those that the new guy can find.
Menlo Park, CA · Member since 2017 · 5 posts · 3 votes
8y
@Omar Khan and @Judah Hoover, thanks so much for your suggestion! I'll definitely participate to some REIA of the area, just to see if there's anyone who's investing out of State.
Yes, my main goal is cash flow (the highest I can, but considering that I would love to invest in a A-, B neighborhood, low crime areas, good schools). What would you do in my shoes?
Rental Property Investor · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
8y
@Marco Paglialunga I would attend REIAs and other RE meetups, but I would first try to understand my goals, objectives and constraints. For instance, if you wanted to do buy and holds, but your REIA only had fix n flippers, then you would tend to ignore that advice and try to find the buy and hold type crowd.
When you're starting out, it is better to understand your personality and investing style to filter the opportunities that you want to avail. It is tempting to learn about everything but you will waste valuable time and energy (without making discernible economic progress) and might get frustrated.
Summary: understand your goals, objectives and constraints. Network with folks who are doing what you want to do. Ignore the rest.
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
8y
@Marco Paglialunga How active or passive are you planning to be in your OOS investing? Are you looking for something turnkey or building a team aka Long Distance Investing author? If you are financing a deal upfront you are going to have to plan on something with a pretty light repair in order to obtain bank financing.
Agreeded when I started working at my job I found that I was surrounded by 50-60 year old who had a view of the world after they had been passed over for job after job. They had a altered view of the world. Just arm yourself with a high level before hearing N=1 stories.
Menlo Park, CA · Member since 2017 · 5 posts · 3 votes
8y
Larry Fried , thanks again for your response.
I would love to start from a cosmetic rehab, as first step, and see how it goes.
What would you suggest as first steps to find the right deal?
Would you searchsomething form a wholesaler?off market?
Auctions?