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Posted about 5 years ago

How We Purchased Our First 3 Rental Properties Out of State in 1 Year

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For those of you who haven’t had a chance to read my first blog post, How Our First Property Turned Into an Eviction and Rehab 5 Months In, I’ll give you a little background. My husband and I are from South Florida and currently live in Brooklyn, NY. We started educating ourselves about real estate in late 2016 when we decided we wanted to build a rental portfolio after realizing how truly expensive it was to purchase an apartment for ourselves in New York City. So we began reading forums and several BiggerPockets books, and listening to podcasts. When it came to deciding where we should invest, we felt most comfortable in the state we grew up in: Florida.

Step 1: Saving Money

My husband and I both have well-paying jobs in NYC, but more importantly we live below our means. This is one of the main aspects that has allowed us to save money and has enabled us to invest in real estate. We understand that NYC, and most other big cities across America, has high rents and food cost forcing many people to live paycheck to paycheck. Many of our coworkers buy breakfast and lunch everyday, while we eat breakfast at home and bring our lunch to work. While a lot of New Yorkers go out for dinner, we cook at home. Don’t get me wrong, we definitely do get to enjoy evenings out with our friends and take trips, but we do it conservatively. We don’t want to spend our entire paychecks and have nothing to show for it, so we came up with a plan that would allow us to save a good amount each month. Our savings strategy is simple: we make sure that all of our expenses can be covered by one of our salaries while the other person saves their entire salary or pays down our debt or a combination of both. We feel this is the most efficient way to save. We have always been big savers. We saved to pay our wedding in full, to move to different cities, for vacations throughout the past twelve years and most importantly we max out our personal ROTH IRA accounts each year. Anyone can do this no matter the size of your paycheck. We did not make much while saving for our wedding or any of those other times. At least one of us was always in school. It wasn’t until two years ago that we both had good paying jobs at the same time. So the lesson here is, no matter how much money you make, you can always find a way to put a good amount of it into your savings if you live conservatively.

Step 2: Preparation

Besides saving money and learning about rental property investing for two years we also had to decide which city in Florida to invest in. We went back and forth for a while and ultimately decided on Jacksonville. At first we felt like narrowing down a city was all we needed to start investing, but we quickly realized that we needed to learn more about each neighborhood since each neighborhood has unique demographics. This was not so easy as Jacksonville is the largest city in the continental United States by land area. It took us another year to really learn which areas had high crime rate, which areas were good for rentals, which areas had potential for appreciation, etc. Of course we did not want to wait an entire year to learn this, we had already waited long enough! We spoke with our realtor, which is a trusted long time friend, and stayed in the lower crime areas for our first deal.

Step 3: Dive In

Many newbie investors get stuck at this stage. They have the money, they have the knowledge, but they can’t find a property. We could have been analyzing deals for the next year, but we knew we just needed to go for it. We found one property we really liked but hesitated thinking we would need to update several costly items to make it perfect. The house was in good condition, but had ugly paint color and old tile flooring which looked dated. Ultimately, we didn’t make an offer on it because we figured we would have to invest too much into the renovation of the property so that it can be rented out. Shortly after we saw that the house was purchased and rented out immediately without a single thing done to it. Lesson learned. The second property we liked was a bank owned property and we did make an offer on it. The bank had sealed off the attic and would not open it for inspection. That was suspicious to us and we didn’t want our first purchase to potentially be a money-pit, so we backed out during the inspection period. Third time’s the charm! We found a 3/2 with a tenant and closed a month later.

Property #1:

You’ll see a pattern here with each one of our properties. We inherited tenants with all of them which was pure coincidence. The first property we purchased in February 2018 is a 3/2 near Jacksonville University. We had saved approximately $28,000 for a real estate investment so we wanted to find something under a $100,000 purchase price. Here are the details of the deal:

  • Listing Price: $100,000
  • Appraised Value: $106,000
  • Purchase Price: $90,500
  • Down Payment: 20% ($18,100 plus $5,200 for closing costs)
  • Monthly Mortgage (Including Taxes & Insurance) and Operating Expenses: $723
  • 30 yr fixed rate of 4.875%
  • Monthly Rent: $1,075
  • Vacancy Loss: 8% annually
  • Monthly Cash Flow: $266

If you read my first blog post you already know that this inherited tenant ended up abandoning the property a few months later, leaving a disaster behind. We had to undergo a rehab which gave us the opportunity to build a strong relationship with a contractor we met on BiggerPockets a few months before. Here are the new details of the property post-renovation:

  • Rehab cost: $8,000
  • New Appraised Value: $118,000
  • New Monthly Rent: $1,200
  • New Monthly Cash Flow: $381
  • Cash-on-cash return: 14.7%
  • Target 10 yr net IRR: 13%

Because of this renovation we ended up with a 43% increase in monthly cash flow. You can see the Zillow listing here and how nice it turned out. It took less than a month to get it rented out to high quality tenants.

Property #2:

Between February and October of 2018, we continued to save and around the beginning of October we designated $20,000 for a down payment and closing costs for our next deal. These funds came from us saving the way I spoke of earlier and also saving some of the cash flow we had from property #1, before the rehab took place. The second property we purchased is a 3/1 in a bit of a lower income neighborhood, but had long standing tenants and a very nice cash flow. We purchased it in October 2018. Here are the details of this deal:

  • Listing Price: $55,000
  • Appraised Value: $49,500
  • Purchase Price: $49,000
  • Down Payment: 20% ($9,800 plus $4,093 for closing costs)
  • Monthly Mortgage (Including Taxes & Insurance) and Operating Expenses: $389
  • 30 yr fixed rate of 6.0%
  • Monthly Rent: $815
  • Vacancy Loss: 8% annually
  • Monthly Cash Flow: $361
  • Cash-on-cash return: 32.9%
  • Target 10 yr net IRR: 32%

This property required us to fix an electric meter about a month after purchasing it which cost $900 and about $200 fixing a few minor items like a broken light and vanity in the bathroom. After this deal we had a little over $5,000 left in our real estate investment savings account.

Property #3:

One month after purchasing property #2 we wanted to either do a flip or BRRR. We already knew that our first property had a good amount of equity in it so we started researching how we could obtain a HELOC on an investment property. This idea came from Brandon Turner's "The Book on Investing in Real Estate with No (and Low) Money Down" that we read along the way. By the end of November our first house appraised for $118,000 and we were able to open a HELOC for $24,000. We also built a relationship with a hard money lender. All we needed now was to find a deal. After over two months of looking at hundreds of properties and then performing heavy analysis on about 60 properties, we could not find one that would meet our standards. It turns out that the Jacksonville market did not give us much of a margin to do a flip or a BRRR unless you do a lot of the rehab work yourself or have cash where you would avoid the hard money fees. We also didn’t want to take on more risk by buying a really old house that required more work than what we initially wanted to do our first time around. So we changed our strategy and decided to purchase a third rental property. We found a 4/2 in a very nice neighborhood. An all brick home and of course it already had tenants. The tenants have been in place for twelve years and they don’t plan on moving any time soon. Additionally, the tenants are currently paying below the fair market value for that specific neighborhood, so we do plan on increasing rent proportionally each year to bring their rent to fair market value. We purchased this property in February 2019. Here are the details of the deal:

  • Listing Price: $128,000
  • Appraised Value: $126,000
  • Purchase Price: $123,000
  • Down Payment: 15% ($18,450 plus $6,633 for closing costs)
  • Monthly Mortgage (Including Taxes, Insurance & PMI) and Operating Expenses: $890
  • 30 yr fixed rate of 5.25%
  • Monthly Rent: $1,100
  • Vacancy Loss: 8% annually
  • Monthly Cash Flow: $122
  • Cash-on-cash return: 5.8%
  • Target 10 yr net IRR: 15%
  • ARV: $185,000+ with about $25,000+/- of work needed

For this one we used $15,000 of our HELOC for the acquisition costs and the rest we paid with our savings. Luckily, we had the HELOC sitting and waiting for us to find a deal. Not only are we always looking for deals, but we have the money in place beforehand. The plan is to pay the HELOC in the next 12 months and fully rehab the property in the next two years using the same HELOC. With an ARV north of $185,000 we stand to make a good profit if we decide to sell it or do a cash-out refinance, which was why we accepted a lower cash flow from this property. With these three properties we now have an average positive cash flow of $249 per month.

Savings + Preparation + Diving In = Three Rental Properties

A ton of hard work went into getting three properties in a one year time span. It was not luck. We are not rich. We planned and saved and prepared to get here. Anyone else can do the same, but you have to be committed to achieving your goals. The work doesn’t stop at acquisition, it actually just begins! Our properties are giving us all new challenges to face: learning to deal with tenants, finding contractors and handymen to fix problems and keeping up with the housing markets. I have so many people asking, “How did we purchase three properties in such a little amount of time?” When I start explaining to them about all the work involved to acquire the properties and all the work that comes after, I can tell whether they really want to do this or not.

A lot of investors decide to hand over their properties to a Property Manager, but we self manage from out of state. I enjoy self managing, in fact I actually love it. It’s always rewarding when we handle issues immediately that our tenants have had from previous landlords and how grateful they are when we fix it quickly. As renters ourselves we expect our landlord to fix any issues as soon as possible. We try to treat our tenants as we would like to be treated ourselves.

What’s next?

Our next step is to begin looking for investors who want passive income in real estate. We plan on finding the deals and manage them long-term with our rolodex of contacts in Florida to handle any situation that may arise. Our positive cash flow strategy has proven successful thus far, so our only logical next step is to now scale our business model. Stay tuned for more updates and our next post on how we conduct our analysis!

Happy rental property hunting to all, and thanks for reading! Feel free to ask any questions you have about rental property investing or real estate, I’ll try to answer as best as I can.

Comments (76)

  1. im really impressed, how did u go about finding contractors to do repairs from out of state?

  2. Thank you so much! Best of luck!

  3. Thanks for the information. Learned a lot.  I’m looking at Tennessee but haven’t been able to jump in. Your article has been an inspiration.  Thanks 

    1. Thank you so much! Best of luck!

  4. Hello


    Congratulations my dear, excellent job for a first time out state investor. It’s currently 1:55 AM in Miami your story kept me up and I love it too because I learned a lot from your journey. I also like the way you are so transparent about your deal. I have read all of your post to understand it and to take it from the top. I am happy you found a great team contractor, eviction lawyer, and good property manager.

    You never know, maybe when I am ready to invest in Tallahassee I probably would ask for your contractor.! 

  5. I loved reading this! Thank you for being so transparent about the journey. Very helpful. 

  6. Hi Elenis, thank you for sharing! Amazing article! 

    Regarding Property #1, your rehab costs (of 8,000$) increasing the property cash flow 43%. What were some of the renovations made? Were they more on the cosmetic side or maybe towards the structural side? 

  7. Elenis,

    First i just want to let you know how much i appreciate your article. Thank you so much for sharing! A year ago my wife and i decided to go for real eatate investing after we purchased our primary residence. The funny thing is we talked about the same money saving strategy that you talked about, one spouse support the expenses so the other spouse's income can be saved as capital. I can relate to your article very well that it motivates me to focus on one variable in your equation that I've been slacking on, Diving In! Once again, thanks!

  8. Thank for the good read, and congrats on your 3 purchases! I find it absolutely crazy that you can find houses that don't need too much work for those prices lol. My market is way more expensive! I just completed my first BRRRR here in Alaska, and I bought the tiny house for $100,000, and it needed everything was a full gut. But all the numbers worked out in the end, and it is now cash-flowing. I would love to buy investment houses in other cities that are cheaper, but I just don't even know where to begin. I feel like I wouldn't be in control and I guess that scares me a little bit. Looks like I need to get over that fear lol. 

    1. @Cam Jimmy Thank you for reading and for the compliments! We are originally from Miami where housing prices are much higher than Jacksonville, so I completely understand what you mean. Congrats on your first BRRRR! That's a huge accomplishment. I'll send you a PM now with a great book I read that'll help you get over that fear of investing out of state  :)

  9. good job! what's the story with those crazy closing costs? i'd also consider building up a reserve account, just in case. looks like you were stretched pretty thin after #2.

    1. @Victor S. Thanks! As for the closing costs, are you seeing better rates in Oklahoma? Those are pretty standard closing costs in Florida. I wish they were lower of course  :)  And yes, we do have a reserve. The amount we mentioned after each deal is only the real estate investment fund we have, we have other savings and money in other investments as well that can easily be taken out if we have an emergency. We also have a HELOC and credit cards that have 0% interest on them. We have options. We make sure not to jump into a deal that can destroy all the hard work we put in! Thanks for looking out.

      1. Good deal! Yeah, I'd say our fees here are about $2-3k (excluding prepaids). I hate my escrow account with a passion and currently trying to get out of one (it's tough) lol

  10. @Elenis Camargo Thank you for your time to write your adventure out. I am currently an out of state investor (more of out of country). I am always on the lookout for investors that want to partner up. However, I just bought my first property and I am currently in saving mode right now. I would like to connect to swap ideas, if interested.

    1. @Christian Wamsley Thanks so much! I'll PM you now  :)

  11. I apologize if I missed this question in another comment. I'd be interested in hearing how negotiations went with the sellers. The list prices were already below appraisal and all three accepted offers were substantially below asking price. Were there any extenuating circumstances that led to lower accepted offers?

    1. @John Prorok Sure. Our first property we originally came in at $90k and they did not accept. We went back and forth and settled at $95k (if I remember correctly). Once the inspection report came back, we saw the AC and roof needed replacing as they were at the end of their lives. We asked them to lower again to $90k and they accepted. So we ended up settling at our original offer price. For the second property we knew it would not appraise at $55k due to comps we did so we offered lower and they accepted. I think we only went through one round of counter offers there. For the last deal, that one was tougher to negotiate. The seller had purchased the property this past December for $100k and was looking to make a quick buck by asking $128k. This is where doing your research on the property really helps! We knew from the work involved that they were going to have a very hard time selling at asking price. We offered $118k and went back and forth several times. They kept coming back with horrible counters, for example the first time they only lowered $1k. We finally came back with a "best and final" of $123k and they countered again. We had our agent stay first and hold on the $123k. When you say "best and final" you have to be willing to walk away from the deal, and we were. They walked away saying they would have other offers. The next day they were asking again if we would budge. That's when we knew we had them. In the end they accepted the offer. Each deal is different so it really all depends on the seller's situation and on yours.

  12. Loved your post. My husband and I are trying to do something similar. We already own two rental properties. Just closed on the second this pass Monday, yay. Do you purchase the properties as an LLC and if so how, because I have not found a bank or hard money lender that will allow it? I’d like to discuss further with you offline but am not sure of what PM is?


    1. @Onika Washington I’ll send you a private message now :) 

  13. Great article, very inspiring.  As I was reading, I was very skeptical, because in my area 3/2 homes sell for $300+ & you were mentioning how you could save up a 25% downpayment in one year... (that's over $75,000).  I was initially thinking this is for people with massive disposable income that they can funnel into properties (not me).  However I kept reading & when you bought your first property at under $100k, I was shocked & instantly skeptical again. so I pulled up the listings in Florida on Zillow & was blown away that homes were available in that range, and rented for a profit.  You blew my mind & inspired me to start researching this.  

  14. Thank you so much for sharing your experience!!  It's inspiring to read how you persevered and found solutions.

    1. @Rodel Usam Thank you so much!! It truly means a lot. I hope that you can achieve your RE investing goals as well, if you aren’t already :) 

  15. Thanks for sharing your journey! We are looking to buy an investment property in a gated community near Disney World. We are currently checking out property managers thinking that was the only way to go. How do you handle the management yourselves? How did you find the right people?

  16. HI there

    I really enjoyed reading your blog.  It totally resonates with me.  So happy for you that you worked at acquiring these three properties so conservatively.

    I am overseas right now going back to start over in the USA as soon as I can..  I have started saving and living within my income so am doing well overseas.  But coming back to USA I will be selling real estate with the intention of generating a second income and  saving as much as I can.

    Maybe a few months before I can get my credit up and some cash stashed away.  Dont have a partner with second income!!

    Will stay in touch.  Thank you for your blog  

    Magda Zakrzewski (still in South Africa)

  17. how did you find a heloc on an investment property?  I’ve called tons of banks and no one does it so far

    1. Try PenFed Credit Union, I believe they do HELOC’s on investment properties. 

    2. @Benjamin Voorhis As @Melady Tavira said, go with PenFed! I was told a HELOC on a rental was not possible in "today's market" but after posting on BP many people recommended PenFed. They offer 1% above the prime rate for investment properties. It only cost $73 for the title fees and I had to pay for the appraisal. Usually they don't need an appraisal but since the county records showed my property as a 2/1 instead of a 3/2, I had to do the appraisal to get the true value. Closed in about 1.5 months due to the holiday time. Feel free to reach out if you have any other questions. They'll for sure be able to help you with the HELOC. Here's the link to their site:

  18. This post is very inspiring as a soon to be investor. Your story shows the realm of possibilities if you have a solid plan and discipline with savings. I’m curious to know how did you oversee the rehab work if you didn’t have a PM to assist?

  19. Congratulations on talking action.  May I ask where are your capex and maintenance percentages.  Did you work that into your numbers also?  I don't see a lot of wiggle room for repairs but I may be missing something.

    1. @Francine Brown Those are very good questions. Regarding CapEx, we typically have our Contractor view the properties beforehand so that he can provide us with his opinion on items that would need to be fixed and the cost to fix them. Instead of basing our decision to purchase a property purely on monthly net cash flow or cash-on-cash return, we instead put a lot of more weight on what we estimate the 10 year net IRR will be. Since we do plan on holding these properties for at least 10 years we can then factor these CapEx items into our annual cash flows. These items includes such things as a new roof, replacing an old A/C, upgrading the flooring, etc. Since we know the condition of these items based on our Contractors opinion and inspection report we can better plan and forecast when we will upgrade them. Regarding maintenance, we designate 5% of monthly net cash flow to any unforeseen maintenance expenses. At the moment, this is an arbitrary number, but we are monitoring these expenses to better determine the percentage we should be saving for these maintenance expenses.

  20. I think the way you did, investing in an area you already know is the only safe way to buy out-of-state real estate. I hope you have as good luck managing at a distance. My rents slow down whenever I go out of state for extended periods. 

    1. @Susan Maneck Thanks! It’s been great so far. What do you mean when you say that your rents slow down when you go out of state for extended periods? 

  21. Thank you for sharing! newbie looking to start out but really scared on how to find the right properties. Also interested in working with you..

    1. @Gia Ganesh Thanks for reading! I’ll send you a PM now. 

  22. i’m sorry to say but according to your cash flow on your rental property you’re currently in the red there’s not enough cash flow there what you should’ve done was look for properties in your neighborhood to keep your costs down and I would’ve started off repositioning properties to raise capital first.  If no deals could have been found in your neighborhood I would’ve relocated to those areas,  to those who are starting off I would go with a multiunit and in my own backyard. 

  23. Awesome story. I am currently looking for another property but have not decided where. I am in Orlando and it has been difficult to find properties since it has been saturated by investors. I was thinking of heading up north to Jacksonville. I am interested in partnering up.

    1. @Yamil Tapia Thanks so much! I’ll send you a PM now. 

  24. Awesome success story about hard work and diligence to save paying off.

    What made Jacksonville stand out as an attractive market?

    What does 3/2, 3/1, and 4/2 mean? 

    Thank you! 

  25. Great post! I also bought my first two rentals in 2018. I am working on my third now. Both of my properties are out of state. How have you managed contractors long distance to ensure things are being completed properly?

  26. So many people don’t realize the hard work that goes into being a landlord.  My hat goes off to you for   managing your own properties, I manage one in my state and have property managers for the 2 out of state.  I prefer letting the property managers handle all the calls, repairs and leasing. Being a single woman It is very hard to find a dependable handyman. After all the property management fees, mortgages, taxes and insurances my cash on cash is $1020 monthly.  Thanks for sharing, now I know I am moving in the right direction. Thanks again 

    1. @Elizabeth Mckinnon Totally agreed! So many people ask how they can get into real estate and when I start telling them all the work involved, I can tell who’s serious or not. Thanks so much for reading. Best of luck on your properties!! 

  27. Great work. I love how committed you were to finding your properties. It has encouraged me to work on finding deals myself as a newby. I am trying to learn, yet I feel so intimidated. This encourages me to work diligently at learning. 

  28. Did you visit the properties before you purchased?  If not, how did you have them inspected and feel comfortable to make the offer?  Even investing in my local market, the neighborhoods change from street to street.  I just don't feel comfortable with comps unless I know what the street the comps in on looks like.

    1. @Bob Evans Great question. No, we purchased them all sight unseen. I have a trusted friend who's a realtor in Jacksonville. She is our eyes and ears there. We of course do all the research like comps, neighborhoods, Google street view, etc. beforehand but if she tells us a particular property won't be good as an investment because of the block it's on, then we pass on it. It has happened several times before. I highly recommend David Greene's book "Long Distance Real Estate Investing". I read it after purchasing our first property and realized other people do this too. He's purchased his massive portfolio all sight unseen and all over the US while working as a police officer in California. Happy to help with any other long distance investing questions you may have! Feel free to PM me any time. 

  29. Do you have a property manager and what is their fee?

  30. ok so I have to ask...I have several paid off rentals. How do you get a HELC on a rental & how do you find lenders willing to loan to you for a rental. I'm doing something wrong....but I feel I'm in the right place..

    1. Wells Fargo will given HELOCS to rental properties. I have three of them. 

    2. Security Bank in Winsted MN. Ask for Jeff-he is the president. Tell him Mark K sent you!

    3. @Tom Brickman If you have several paid off rentals then you must be doing something right! I was told a HELOC on a rental was not possible in "today's market" but after posting on BP many people recommended PenFed. They offer 1% above the prime rate for investment properties. It only cost $73 for the title fees and I had to pay for the appraisal. Usually they don't need an appraisal but since the county records showed my property as a 2/1 instead of a 3/2, I had to do the appraisal to get the true value. Closed in about 1.5 months due to the holiday time. Feel free to reach out if you have any other questions. They'll for sure be able to help you with the HELOC. Here's the link to their site:

  31. WoW that’s a great article, I’m just starting out and super inspired by your story. How did you find the properties through contacts on bigger pockets, a realtor or looking yourself through sites like Zillow and Just curious 

    1. @Steph Paul Thanks so much!! The first two we found through sites like Redfin/Zillow. For the third one, our relator had set up a daily email alert with our criteria and we found it that way. She is our eyes and ears in Jacksonville and goes to see all of our properties before we decide to purchase or not.

  32. Thank you for sharing your story! I can identify with it. We're also just "regular" people with normal jobs, who want to secure passive income. We, like you, did it the old fashioned way by starting out by saving our money, living super cheaply, and rolling our rental income earnings into more investments. Kudos to you! Happy renting! :)

    1. @Nicole Obregon Thank you very much for reading it! Great to hear other "regular" people that are doing the same. I truly feel that anyone can do anything that they set their mind to. But that doesn't mean it comes easy, and that's what most people don't understand. Best of luck with your investments! :)

  33. Can you expand some more on how you manage the properties while out of state? How do you collect rent? How did you find reliable handymen to handle tenant requests? How do you do maintenance? How do you plan to handle tenant occupancy turnover quickly and efficiently? I'm also in New York and plan to do something similar in the Tampa/Clearwater area so just looking for tips and practical advice from someone who's actually done it. Thanks in advance!  

  34. Great work! We are planning on the same thing. Thank you for the inspiration 😁

  35. Great article, inspired and gives me a little more faith to keep pushing and saving for my next purchase, in Florida hopefully. :-).


    1. @Kevin Darrell I'm so happy it inspired you! Never give up if this is something you really want to do. Please reach out if once you're ready to purchase in Florida. I'd love to help with any questions you have  :)

  36.  Great information and motivates me . Thank you 

    1. @Daniel Colon Thanks so much for the kind words. It truly means a lot!

    2. Inspiring post! Thanks for sharing

  37. nice post, thanks for sharing and kudos. I look forward to your updates, and if you need someone to partner with, let me know please.

  38. How are you able to handle repairs when living out of state?

    1. @Anthony Fecarotta I believe it's the same as handling repairs when you're local. Unless you're super handy, most landlords would call someone to fix the majority of issues. For example, if the AC stops blowing cold air, you call your AC company. If the toilet breaks, you call your handyman or plumber. And so on. I have relationships with a contractor for larger jobs as well as a handyman and some other vendors (AC, electrician, plumber). These took time to build but now that I have them it's much easier handling problems. The more frustrating part I would say is coordinating with tenants. Sometimes they say they'll be home and then don't answer the phone or they report an issue and aren't home to let the repair person in. If I was local I could go myself. But still, most things are the same being out of state or local, in my opinion. 

  39. Thank you for sharing your story Elenis! We have a similar situation, we live in Southern California and thinking to start on our rental portfolio outside of California obviously but I only have one debate right now either we should buy our own home first, because the apartment we are renting now cost us $2600 monthly and then start investing in rental property or vise versa ? I would highly appreciate your answer regarding such situation! 

    1. @Tatiana Portnyagina My wife and I were in the same situation. We had our feelers our for good deals for both rentals and primary reside. We were tired of renting and wanted to start building equity so we bought a house and are in the process of building an ADU so we can house hack it which will give us a 18% cash on cash return. 

    2. @Tatiana Portnyagina Thank you for reading! I think it depends if you are staying in Southern California long term. For us, we were not going to stay in Brooklyn long term so investing in a property did not make sense, on top of it being so expensive. We pay $2250 in rent but most people pay closer to what you're paying in CA. Also, NYC has very tenant-oriented laws rather than a state like Florida that's more landlord friendly, so once we leave Brooklyn we would've had to deal with issues there. I like what @Jeff Langham did. If you're staying long term then maybe consider doing a house hack with a property that has an ADU. I know how much it sucks writing that super high rent check every month so I understand your wanting to get your own property there as well. I would also like to add to look at it as an investment if you do move forward. Most home buyers go and max out whatever the bank approves them for and end up house poor. Feel free to reach out via PM and I'll be happy to talk some more! 

    3. You need to look at the pros and cons of buying your own home. First of all you need to have a down payment, if you put down a down payment for your own home, will you still have enough to invest in real estate? 

      Have you thought about house hacking? You buy a multi family and rent out one side while you live in the other side. I think this would be a great fit for your situation. However check the numbers!

  40. Thanks for sharing. My wife and I just started that same journey. We already purchased our first property and now we are looking for our second. I noticed all three properties in your experience were single family, have you thought of going for multi-family? Also could you explain to me what a hard money lender is?

    1. @Daniel Bareno Congratulations on your first purchase!! I always feel like that's the hardest step to take. Yes, all three of our properties are single family homes and yes, we are looking to get into multi families next. We wanted to first get experience in acquiring properties and managing them before taking that step. We feel we are ready for that now. Sure, a hard money lender is either an individual or a company that lends usually the full purchase price plus rehab costs to real estate investors, but for a pretty high fee. For example, they usually charge 2-3% on the entire loan amount plus 12% interest per month. This depends on your experience so far as an investor. The more experience you have, the lower the fees. Usually investors use them for flips or BRRR, but there are also some lenders that offer loans on longer term rental deals. Those fees vary as well. If you ever want to get more information, I can share the few hard money lenders I've spoken to so far. Also feel free to ask any questions via PM regarding this or anything else! Happy hunting on your next deal!

  41. Good job and excellent post! Now I have to start blogging to keep up with you :)

    1. @Chris Higgins Thanks for reading!  :)

  42. I am am investor who was interested in passive income in real estate. I would be happy to work with you guys for acquiring properties that you guys manage. However please keep in mind that we have very conservative acquisition requirements more so than the ones you've identified in the Acquisitions you've captured above. Feel free to reach out to me to discuss further.

    1. @Marcus House Thank you very much for the message, Marcus. I will send you a PM today so that we can discuss.

  43. This is exactly what my husband and I are looking to do. We are planning on buying our first property within the year.  We have a savings goal we plan to hit by the end of this year and are now learning about the different markets.  Great read, thanks for sharing!

    1. @Irene Cofone That's great to hear! It all starts with a goal and taking steps toward that goal. We started the same exact way. Best of luck and feel free to reach out if you have any questions.

  44. Thanks for sharing, very inspiring!  One question, you said that you manage these properties yourself from out of state, am curious how you do that?  Do you have a contractor you use regularly?