New real estate investor

Denver, Colorado
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New real estate investor

Lydia Tilahun
New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes

Hi everyone, I’m a beginner investor based in Colorado. I’ve saved $60K and I’m looking to invest in a rental property — possibly out of state. I’m still learning and would love to connect with others who’ve started with similar budgets. Open to advice, tips, or just hearing what’s worked for you! Thanks in advance.

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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
1y
Quote from @Lydia Tilahun:

Hi everyone, I’m a beginner investor based in Colorado. I’ve saved $60K and I’m looking to invest in a rental property — possibly out of state. I’m still learning and would love to connect with others who’ve started with similar budgets. Open to advice, tips, or just hearing what’s worked for you! Thanks in advance.

I wouldn’t make it TOO complicated - while learning as much as you can is always good, trying to organize all this random information into an investment strategy at the early stage of investing is impossible.  Here’s what I would do based on my 45+ years of real estate investing experience

Purchase a small but well located and good condition SFR or duplex in an area within a 2 hour drive (preferably 1 hour) of your main residence. Collect rent, pay bills, keep a reserve for repairs and capital items.  You’ll learn more in a year then all the theories, strategies, and tactic study will teach. 
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  • Christine Mulkins
    Rental Property Investor · Medford, OR · Member since 2017 · 94 posts · 115 votes
    1y

    Hi and welcome!  What kind of property are you wanting to buy - single or multi-family residential?  I'm assuming long-term rental?  There are lots of things to discuss.  Let me know if you have specific questions and want to connect and I'm happy to help :)

    1Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    1y

    @Lydia Tilahun

    You're in a great position with $60K saved up—enough to make a 20–25% down payment on a solid rental in many Texas markets like San Antonio, parts of DFW, or even outskirts of Houston. These areas offer strong rental demand, relatively affordable prices, and landlord-friendly laws—perfect for out-of-state investors starting out. If you’d like help analyzing deals or connecting with trusted local pros, feel free to DM me and I’ll point you in the right direction!

    Good luck!

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  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    Welcome to the community Lydia! My advice would be to start small and really dig into your research. Get to know the local market, connect with other investors and agents, and always have a clear plan in place before jumping into any investments. I wish you the best of luck on your journey, and happy to connect if you have any questions!

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  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    Welcome to Bigger Pockets Lydia!

    Bigger Pockets is a great place to learn and connect with fellow investors.

    If you’re looking to invest long distance, I definitely recommend 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

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  • Drago Stanimirovic
    New to Real Estate · Miami, FL · Member since 2024 · 1k+ posts · 469 votes
    1y

    Hi Lydia,

    With $60K, you're in a great spot to either buy in a cash-flow market or use it as a down payment on a rental with financing. Out-of-state can work well , just focus on landlord-friendly areas with solid rent demand. DSCR loans are a great option for new investors too.

    Let me know if you want help with financing or finding the right market!

    2Reply
  • Lydia Tilahun
    OP
    New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
    1y

    @Tom Woodhouse Thank You!

    0Reply
  • Kate Sanchez
    Member since 2025 · 248 posts · 101 votes
    1y

    @Lydia Tilahun  Great start! $60K gives you solid options. Have you looked into house hacking or turnkey rentals in Midwest markets with low entry costs?

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1y

    @Lydia Tilahun

    Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

    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 affect what type of contractors, handymen and property management companies will work on a property.

    If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will 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%

    Source: Fair Isaac Company

    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. Check out the map on our website where we’ve made this all easy to follow.

    We can also share numerous examples of properties & portfolios we’ve assisted investors with!

    DM us if you’d like to discuss this logical approach in greater detail!

    [email protected]248-209-6824
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  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    1y
    Quote from @Lydia Tilahun:

    Hi everyone, I’m a beginner investor based in Colorado. I’ve saved $60K and I’m looking to invest in a rental property — possibly out of state. I’m still learning and would love to connect with others who’ve started with similar budgets. Open to advice, tips, or just hearing what’s worked for you! Thanks in advance.

    I wouldn’t make it TOO complicated - while learning as much as you can is always good, trying to organize all this random information into an investment strategy at the early stage of investing is impossible.  Here’s what I would do based on my 45+ years of real estate investing experience

    Purchase a small but well located and good condition SFR or duplex in an area within a 2 hour drive (preferably 1 hour) of your main residence. Collect rent, pay bills, keep a reserve for repairs and capital items.  You’ll learn more in a year then all the theories, strategies, and tactic study will teach. 
    Private Mortgage Financing Partners, LLC
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    8Reply
    • Christine Mulkins
      Rental Property Investor · Medford, OR · Member since 2017 · 94 posts · 115 votes
      1y

      @Don Konipol  100% true! Best way to start out is to do it yourself. I am a huge proponent for self-managing your rentals. My husband and I manage our 48 units. It's much less work than you would think and SO worth the lessons learned and extra money you get to keep rather than having to pay a property management company. 

      1Reply
    • Peter W.
      Member since 2020 · 351 posts · 329 votes
      1y
      Quote from @Don Konipol:
      Quote from @Lydia Tilahun:

      Hi everyone, I’m a beginner investor based in Colorado. I’ve saved $60K and I’m looking to invest in a rental property — possibly out of state. I’m still learning and would love to connect with others who’ve started with similar budgets. Open to advice, tips, or just hearing what’s worked for you! Thanks in advance.

      I wouldn’t make it TOO complicated - while learning as much as you can is always good, trying to organize all this random information into an investment strategy at the early stage of investing is impossible.  Here’s what I would do based on my 45+ years of real estate investing experience

      Purchase a small but well located and good condition SFR or duplex in an area within a 2 hour drive (preferably 1 hour) of your main residence. Collect rent, pay bills, keep a reserve for repairs and capital items.  You’ll learn more in a year then all the theories, strategies, and tactic study will teach. 

       Don said exactly what I would.  Buy a property in a neighborhood you would be willing to live in where rent is $400-500 more than your mortgage (including escrow for taxes and insurance), learn the laws, set up your bookkeeping strategy, collect rent, build up your reserves, learn the basics of taxes, make repairs.  Preferably something which is turnkey or close to it (no major renovations required).

      Good luck and best wishes

      1Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Christine Mulkins thank you!

      0Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Don Konipol 

      Hi Don, thank you so much for sharing your insight—your 45+ years of experience really hit home for me. I’ve been soaking up so much information lately that I started feeling a little overwhelmed. Your advice reminded me that sometimes the best way to learn is just to start.

      I’m currently exploring small SFRs or possibly duplexes within 1–2 hours of where I live (Aurora, CO), and your message gave me the clarity I needed to take that next step. I’ll keep it simple, stay local, and start learning by doing. Thanks again—I really appreciate your perspective.

      1Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Peter W. Thank you so much!

      0Reply
  • Dylan Brown
    MN · Member since 2025 · 107 posts · 97 votes
    1y

    It's hard for me to add to all these splendid posts!  I just can't help myself from recommending you find a solid tax advisor because you'll find on this journey that one of the coolest parts of real estate investing is seeing how it can impact your tax bill (in a good way).

    I highly recommend you search for terms like "depreciation" and "cost segregation study" in these forums and on YouTube. You should try to educate yourself as much as you can before seeking third-party assistance. With that said, I highly recommend you at least make sure you have a solid CPA in your corner prior to closing on your first property. They can always answer your questions about basic structuring and what to avoid. 

    my other piece of advice would be to take what some attorneys have to say about your structure with the grain of salt. Attorneys are fantastic at mitigating liability, but I have seen many new investors fall for the overly complex structures that attorneys make tons of fees setting up, even though their situation likely doesn't warrant something that robust.

    it is still important to consult an attorney as you scale, but you should always do so with the help of another trusted advisor just to make sure that attorney isn't setting you up with more than you need to start.

    0Reply
  • Sean GrahamBusiness Member
    Investor , CPA · Detroit, MI · Member since 2016 · 586 posts · 249 votes
    1y
    Quote from @Lydia Tilahun:

    Hi everyone, I’m a beginner investor based in Colorado. I’ve saved $60K and I’m looking to invest in a rental property — possibly out of state. I’m still learning and would love to connect with others who’ve started with similar budgets. Open to advice, tips, or just hearing what’s worked for you! Thanks in advance.


     Welcome! I like the mindset already! Don't forget your tax strategy. 

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    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Sean Graham 

      Thank you! I really appreciate that—and yes, tax strategy is definitely something I want to get right from the beginning. If you have any tips or resources you recommend for building a smart tax plan around rental income, I’d love to hear them!

      0Reply
  • Andrew Werner
    Member since 2022 · 14 posts · 11 votes
    1y

    Awesome Lydia and congrats on getting making the jump to REI. It is one that I do not think that you will regret. As for the capital that you have saved this is even better. Way to go! Seriously most people, including myself, got started with way less or no actual capital of their own at all. That said you need to answer a couple questions for yourself: What are you looking for in a rental property? Do you want appreciation or cash flow? Are you interested in tax benefits or amortization (pay down of the loan). Do you want to use leverage or free and clear? Answers to these questions will help drive you to the best direction for you and your capital.

    0Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Andrew Werner 

      Thank you so much for the warm welcome and insightful advice! I’m excited to embark on this real estate investing journey and truly appreciate your encouragement.

      Your questions have given me a lot to consider. I’m currently focusing on properties that offer strong cash flow, as building a steady income stream is a primary goal for me. That said, I also value the benefits of appreciation and tax advantages, so I’m open to opportunities that provide a balanced mix.

      Regarding financing, I’m exploring various options, including leveraging loans to maximize my investment potential. I’m also considering partnerships and creative financing strategies to make the most of my capital.

      0Reply
  • Dennis Fernandez
    Investor · Dallas, TX · Member since 2017 · 71 posts · 44 votes
    1y

    There is plenty of great advice here in BP so my only .02 cents would be about location. 
    We buy houses all over the southern US and yes you will find deals everywhere however it seems that your capital may go further in smaller markets in states such as AR or OK. 
    There are some good deals to be had in my home market of DFW, TX however they tend to be more expensive to get into than say the Little Rock or Tulsa markets for example.
    Hope this helps and good luck in your investing journey!

    0Reply
  • Ryan RomingerBusiness Member
    Real Estate Broker · Indianapolis, IN · Member since 2018 · 340 posts · 144 votes
    1y

    Hey! That’s a solid starting point—$60K gives you some good flexibility, especially if you’re open to out-of-state. A lot of folks with similar budgets look into the Midwest or Southeast for strong cash flow and lower price points. Biggest tip? Build a reliable local team wherever you buy—agent, PM, contractor—makes all the difference. And don’t be afraid to start simple, even a small single-family can be a great launchpad. Happy to chat more if you ever want to bounce ideas!

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    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Ryan Rominger 

      Thanks so much, Ryan! I’ve been hearing great things about the Midwest and Southeast, and I’m definitely leaning toward starting out-of-state for better cash flow. I totally agree that having a solid team on the ground is key. I might take you up on that offer to bounce some ideas—really appreciate the support!

      1Reply
  • Nick Perret Efferson
    Real Estate Agent · Greater Milwaukee Area · Member since 2025 · 54 posts · 27 votes
    1y

    Hi Lydia,

    Congrats on your investment journey! It sounds like you have laid the necessary foundation to begin wisely. For long-term buy and hold, the midwest is a great place to start. 

    Here in Milwaukee, you can find C class duplexes in 130k-170k range. With rents 1000-1200. There is a specific zip code in Milwaukee that is currently in a buyer's market for duplexes under 200k with 8 MOI and list/sold at 90%. 

    There are plenty of high appreciation pockets in Greater Milwaukee such as Bayview, West Allis, Wauwatosa, Riverwest.

    Up and coming investment areas such as Racine and Kenosha offer great long-term potential at more of a discount. 

    For less metro solid cashflow, Sheboygan.


    Good luck!

    0Reply
  • Nithin Thampi
    Member since 2023 · 6 posts · 4 votes
    1y

    I’m also in the same boat but haven’t made any moves. I’m in the DFW area and would love to invest in Texas somewhere I can get cashflow but ultimately appreciation. Can anyone help me find something in a budget of 50-60K down payment? Also would want a property management company to manage. 

    0Reply
  • Teresa BoykinPro Member
    Member since 2025 · 14 posts · 8 votes
    1y

    If you want or need to put more than $60K down, then you can look into partnering your personal and IRA funds together. You would need to have a funded, self-directed IRA for this to work, but it may be worth it if you find a great property that's slightly out of budget.

    That being said, the profit would be split between your personal and IRA account, so if you're looking to maximize cash flow on hand (rather than splitting cash flow between your personal account and your retirement account), this may not be the best option.

    0Reply
  • Robert Smith
    Rental Property Investor · Denver, CO · Member since 2024 · 13 posts · 8 votes
    1y

    Hey@Lydia Tilahun I'm just getting started on my journey as well and am also in the Denver area. 👋

    0Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Robert Smith 

      Hey Robert! That’s awesome—nice to meet another Denver local on this journey! I’m just getting started too and excited to learn and connect with others. Have you narrowed down any markets you’re looking into yet?

      0Reply
  • Matt Menard
    Member since 2025 · 8 posts · 2 votes
    1y

    .

    0Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    1y

    I personally would avoid out of state investing on your first deal (or even your 10th deal). Buy something local. This helps you understand the market and have more control over what is happening with your property. Financing will also be much easier. 

    If you're set on going the OOS route, then invest passively in a syndication. 

    1Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Todd Dexheimer 

      Thanks for the insight, Todd—I really appreciate your perspective. I’ve been weighing the pros and cons of starting locally versus out of state. It’s definitely a lot to consider, especially as a first-time investor. I’m keeping an open mind and learning from every angle, so thank you for sharing your experience!

      0Reply
  • Joe HammelBusiness Member
    Real Estate Agent · Metro Detroit, MI · Member since 2018 · 614 posts · 666 votes
    1y

    If you're open to investing OOS, Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)

    I personally make well over $100k/yr cash flow from 21 properties here. All of which, I’ve purchased within the last 4 years.

    There are 2 types of people who dog on Detroit..

    1. People who don't actually own property in Detroit

    2. People who did it wrong and weren't able to execute.

    If you do it right, it’s arguably the best market to invest.

    Purchase: $80k-$130k

    Rent: $1100-$1500 (no rent control in MI)

    1% rule: .9%-1.4% rule deals

    Coc ROI: 4-12%

    Total ROI: 20-40%

    Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

    Appreciation: 3-10%+ (has been double digit for a decade)

    Location: C+, B-

    These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

    We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

    The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

    We have found what works and repeat it as much as funds allow.

    Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

    Here is a picture of my portfolio if you/anyone is curious.

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  • Bernice RetzloffPro Member
    Memphis, TN · Member since 2024 · 234 posts · 100 votes
    1y

    Hey @Lydia Tilahun!

    Welcome to the journey—and with $60K saved up, you’re in a great position to get started! If you're open to out-of-state investing, a market like Memphis could be a strong fit. You can still find fully renovated, tenant-ready single-family homes in the $100K–$150K range, which makes your budget perfect for a 20% down payment plus closing costs and reserves. Memphis is ideal for beginner investors because of its strong rental demand, stable job market (with major employers like FedEx and St. Jude), and landlord-friendly laws. Plus, working with a full-service turnkey team means you don’t have to worry about managing from a distance—we handle everything from renovations to property management. Happy to connect and show you how others with a similar budget are already building cash-flowing portfolios here!

    901-664-1949
    0Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Bernice Retzloff 

      Hi Bernice,

      Thank you for the warm welcome and the detailed info—this definitely caught my interest! I’ve been seriously thinking about out-of-state investing, and Memphis sounds like a promising market, especially since I’m aiming for cash flow and turnkey ease. I’d love to connect and learn more about the process and how others are making it work. Looking forward to hearing more!

      Best,

      Lydia

      0Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    1y

    @Lydia Tilahun welcome. It is not clear to me from what I read as to whether or not you currently own or rent where you are living. If you don't own then without a doubt, your first step is a local house hack. Right now the best option is a low down owner occupied loan on a large (many bedroom home) where your rent out the rooms. If you can't stomach that, then find a house you can give yourself you owns space and rent out the rest of the units by the room. If you already own your home then consider going the house hack route and renting out your current place with the highest income potential available. These are hands down the highest cashflow strategies in our or really any market. I would say that real cashflow in out of state investing is usually significantly lower than most folks anticipate going in. 

    0Reply
    • Lydia Tilahun
      OP
      New to Real Estate · CO · Member since 2025 · 18 posts · 15 votes
      1y

      @Bill S. 

      Hi Bill, thank you so much for the thoughtful reply!

      You’re absolutely right—I’m currently renting here in Colorado, but my long-term plan has always been to purchase a single-family or multi-family home, live in one unit or room, and rent out the others. That’s actually the reason I moved to Colorado in the first place—I’ve been working and saving up for that opportunity.

      I haven’t made the jump yet, mainly because the Denver/Aurora market has felt a bit out of reach at times, but I’m still 100% committed to house hacking as my first step into real estate investing. Out-of-state investing has crossed my mind, but I want to be hands-on and local for my first deal.

      Thanks again for your perspective—it really helps to hear that house hacking is still one of the strongest strategies in any market. It keeps me motivated to keep pushing forward.

      0Reply
  • John McDonald
    Member since 2023 · 158 posts · 96 votes
    1y

    Since you’re just getting started, I’d really consider looking local first if there are any workable options nearby. Being able to drive by the property, meet tenants, and handle issues yourself (at least early on) can give you a much better feel for what being a landlord is actually like. Out-of-state investing can work, but it adds a lot of complexity and relies heavily on having the right team in place. That’s not always easy to build from a distance.

    Even if your first deal isn’t a home run, the experience alone will help you make smarter moves later on whether you stay local or eventually expand into other markets.

    0Reply
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