Thanks for not eating your young

[Crystal Hoover]

Hi Bigger Pockets community!

My name is Crystal and I am a mid 20’s traveling nurse currently living in Los Angeles. I love my job but I’m looking long term and wanting to get into investing in real estate. Long story short I’m a newb. I’ve been reading a bunch of discussions and learning what I can but there has also been a lot of different opinions on when in your life the right time is to actually pull the trigger. I’ve paid off my student loans, don’t have credit debt, and just recently paid off my car so I am debt free. Also have a high 700’s credit score.

I would ideally like to buy a multifamily property in Oklahoma where I am from and get some cash flow from it but would be open to other state’s as well. Long story short I won’t be living in the property that I buy but will still be renting wherever I am working in the country at that point. All in all I’m just kind of lost on where/when to start..

I guess my main questions would be:

Is starting with multifamily too bold?

Should I be afraid of houses that need a little bit of work?

How much money/percentage% should I have saved up before starting this journey?

Where do I even start? (Find a house, ask for financing, property managers, etc.?)

Thanks for your support in helping us newer people navigate all of these questions that we have!

Crystal

[Alyssa Dyer]

@Crystal Hoover Congrats on no debt! Winningggg. Where in OK are you from? Honestly, OKC is a great market for cash flow, approachable price points, and a stable market, so your comfort zone might be a great fit! 

Is starting with multifamily too bold? - No, it's just tougher to find in some markets. Of course, your purchase price will be higher than single-family and in Oklahoma, there is so much demand for multi you might also take a bit of hit to your returns. That said, two doors in one closing, as well as the security of two income streams, might be worth it to you! 

Should I be afraid of houses that need a little bit of work? That's fine! As a first step I would suggest buying something that's already performing, but that provides you an opportunity to increase returns. For instance, the tenant in place has rented at the same rate for 5 years. Likely when they move out you'll need to do some heavier clean-up and if you throw some upgrades on top of that, you may be able to substantially raise rent rates. Just make sure you talk to a PM about what you should do in order to best improve the chance of raising rents. 

How much money/percentage% should I have saved up before starting this journey? For OK I would do 25k minimum. That's a 60k property at 20% down plus around ~5k in closing. Then you have ~8k for upfront repairs and reserves in case any major mechanicals go out. 

Where do I even start? (Find a house, ask for financing, property managers, etc.?) I would get financing in line. Aaron Chapman is a great national lender that can help you regardless of the market you land in. He helps most of the investors I know. I'd then decide on a market. From there I'd start talking to providers and seeing what they've provided past investors with. I'd also read reviews. If past investors are happy and the inventory they provide makes sense.. they might be the people to work with!