Where should a newbie start out?

Question

Hi all,

I want to buy my first triplex or duplex. My budget is $160,000 and I want to grab a pristine, move in ready rehab in a decent neighborhood. I don't mind renting to lower income people and I don't mind if the neighborhood is all one ethnicity. What cities and neighborhoods should I look in for a positive experience?

Samuel Diouf · Answer

You can get some great cash flowing duplexes for that price range in Dayton, Ohio.

Dean Harris · Answer

@Jennifer Lexon I own over 100 single family properties in Memphis and I would say the cash flow opportunites in Memphis and the lower entry point would attract me to Memphis! Happy to answer any questions based on my personal expierences.

Good Luck!

Verna Littleton · Answer

I'm a broker in Memphis so of course I'm going to say Memphis! :)  If you find a tri-plex for $160k, it will not be in the best area, but your concern will be the  condition of the property and is it rented or rentable? Multi-Family properties are highly sought after in Memphis so they go fast.  You may have better luck getting a duplex which is also a great investment!

Mark Cruse · Answer

This is the second time Ive heard consideration to renting to one ethnicity on BP which alludes me to believe it may be a common mindset. Not sure what is fully behind that ideology. Personally, I feel a newbie getting into a triplex in an area they dont know, which could have low income characteristics is a mix for disaster. I would advise narrowing down and identify a specific area you want to be in. This is a great start because there´s someone here who knows it. Once you do that, extensively study and visit the area. Try to identify a meetup there and network with people who can provide sound advice and recommend resources. Assemble your team there (i.e lenders, PMs, wholesalers). Then, the best move in my book is acquire a property where the numbers work for you to either house hack or have  a very viable and competent property manger. In light of the one ethnicity element, i sincerely advise that wherever and whoever it is, without question, know the community you are serving and understand how to establish and maintain a level of mutual respect. I usually dont respond to post that appear to be newbie one and done questions because many lack seriousness. However, I was drawn to this. You are doing all the right things right now in terms of gathering great information. We are here for you. I wish you the best. I wish I had a venue like this when I was a young newbie. I want to see you win.

Joseph Beatty · Answer

Jennifer, Pittsburgh could be a perfect destination for your buy box. I work for an investment brokerage here in the city, and we sell houses within that budget all the time. A lot of the investors that I work with will get all of their properties Section 8 approved, which guarantees the rent at a higher rate than you could normally get for it.

If you are out of state, I would definitely recommend establishing relationships with contractors, property managers, agents, etc. before you start to make sure you are set up for success.

Neighborhoods I would recommend looking in would be Carnegie, Plum, and Bellevue (huge rental area), to name a few. Happy to connect!

Lindsey Mannix · Answer

Personally, I would look to buy that kind of property and house hack it - meaning you live in one unit and rent the other 3-4 units out. By doing this, you put the least amount of money down to buy it (can be as low as 3.5%). For a budget in the mid 100s, I'd look in the mid-west.

Jason Walsh · Answer

I’d like to see an example of you have one.

Andreas W. · Answer

@Jennifer Lexon

Educate yourself while your money makes 5% with Treasuries. BP is a great place as long as you understand that most posts containing preferred locations have a strong marketing bias. Successful out of state investing for a beginner is a difficult task.

Alex Olson · Answer

Where have you lived, where do you want to live, where do you have close friends that live, and where have you heard of good things about investing? Finally, who do you have helping you? Brokers are not commodities. Some are terrible and some are great. Of course I am partial to helping out in KC but there are other markets. I would refer you to the questions I listed above as what to ask yourself before making any decisions.

Where should a newbie start out?

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