Rookie Investor - Where To Start?

Question

Greetings Fellow REIs,I took the plunge into REI approximately three months ago and have been immersing myself in learning ever since. While I have some liquid cash on hand to kickstart my journey, I'm keen on optimizing my resources.

Atlas Blake · Answer

I am genuinely amazed by the overwhelming support and advice received. Thank you all tremendously for your valuable time, expertise, and, above all, the positive energy evident in your responses.

I'm leaning towards initiating my real estate journey with the "owner occupy" approach, focusing on multifamily properties with value-add potential. The plan is to gradually expand my portfolio, incorporating mid-term rentals and beyond.

I'm thrilled about connecting with all of you, and if there's ever an opportunity for me to assist you on your journey, please don't hesitate to reach out.

Cheers to a promising journey ahead!

Simon Ashbaugh · Answer

Hi Atlas, welcome to BiggerPockets! It's exciting to hear about your plans to utilize fix-and-flip projects to build capital for mid-term rentals in Southern California and the mid-east!While house hacking can be a valuable tool, another option to consider for your specific goals is BRRRR (Buy, Rehab, Rent, Refinance, Repeat). This strategy aligns well with your desire to build equity quickly and transition to rentals. You could buy a multifamily, fix it up, rent out units while living in one, then refinance to pull out your initial investment and repeat the process.Additionally, deep-diving into specific areas within your target markets will help you identify properties with higher rental potential for your mid-term strategy.And regarding owner-occupying your first multifamily, this could be an interesting option depending on your financial goals and risk tolerance. Consider factors like potential tax implications and long-term financial benefits before making a decision. Hope this helps!

Erin Spradlin · Answer

@James Carlson @Atlas Blake - Agree with James Carlson on this one. Keep it simple and keep it small for the first investment. Get your feet wet and then decide if you want to move into other projects or if you want to stick with the easier properties.

Twana Rasoul · Answer

@Atlas Blake House Hack a multifamily that has value add potential whether cosmetic fixer and or adding units to it.   Especially going the low down option you will get the best bang for your buck.  Live in a multifamily and fix it up while living there then just hold on to it and not sell...move on and rinse/repeat.

James Carlson · Answer

@Atlas Blake

To me, if you have capital for fix-and-flips, you have capital to buy a house-hack property.

I think there's too much glorification of the "creative" investment -- flipping, wholesaling, note-buying, etc. etc. -- when the simplest option is probably the best.

I tell my first-time homebuyers in Colorado to keep it simple. Buy a home with as many bedrooms as your budget will allow in a nice enough location and rent all the rooms. In a high-priced market like Denver and Colorado Springs here (or San Diego where you're at), there are plenty of people who find a whole apartment rent unattainable and will rent a room.

Live in it for a year or two, move out, rent the remaining room you lived in, and buy a new place to repeat the process. (A multi-family, if you can afford it, achieves the same goal.)

My two cents at least. Good luck!

Nadeem Alamgir · Answer

Welcome @Atlas Blake! Cleveland has a ton of fix-and-flip opportunities. I would check out zip codes such as 44102, 44111, 44109, and 44125.

https://www.news5cleveland.com/rebound/cleveland-is-hot-spot...

Zeke Liston · Answer

Hey Atlas, house hacking is a great way to get started. If that's not an option, Ohio has a lot of great options for BRRRRs and flips.

Jeremy Melloul · Answer

Welcome to the world of REI, Atlas. I wasn’t where you were too long ago. I was 2 hours north of you in LA for a decade and now I’m in Columbus, OH.  Curious, you said you were interested in investing in the mid-east markets. Can you be more specific as to where and why you like that location?  First step for me was to pick a market and focus on that market and not get distracted by the pretty shiny thing always vying for my attention.

I’m available to chat anytime you like. Best of luck man.

Wale Lawal · Answer

@Atlas Blake

Congratulations on taking the plunge into real estate investing! Your strategy of starting with fix-and-flip projects to generate capital and then transitioning into mid-term rentals is a common and viable approach. Here are some insights and advice to help you navigate your real estate journey.Fix-and-flip Points to Remember:Make sure you comprehend every aspect of the renovation process, including precisely predicting expenditures and adhering to deadlines.For the refurbishment process to go more smoothly, establish connections with reputable suppliers and contractors.Always keep an emergency money on hand in case something unforeseen comes up when renovating.Financing: Look into financing choices for prospective rental properties as well as fix-and-flip projects. Having a positive rapport with a lender can help you achieve your long-term real estate objectives.To optimize your assets, think about using partnerships or personal funds.Owner Occupying a Multifamily Home:Owner-occupying a multifamily property in San Diego can be a strategic move, especially with the goal of expanding your portfolio.Understand the regulations and requirements for owner-occupancy in your target area. Some areas may have specific rules regarding the percentage of time you need to reside in the property.Remember that real estate investing is both an art and a science. Each project and market may present unique challenges and opportunities. By staying informed, building a strong network, and adapting your strategy based on experience, you'll be better positioned for success in the dynamic world of real estate.

Best of luck with your endeavors!

Jimmy Lieu · Answer

Hi Atlas, I'd recommend that you also look into Columbus Ohio because I see it being one of the biggest metropolitan cities in the next 10-20 years, all signs are pointing here! Population is growing aggressively and jobs are moving here especially with major employers like Intel, Google, Amazon, Nationwide, etc. On top of that, you have one of the biggest and best universities in the world here with Ohio State University. The cost of living is extremely low compared to other cities and you can still many many positive cash flowing and 1% deals here. On top of that, you get great appreciation and very landlord friendly laws. Tons of investors are buying Columbus up! As an investor and agent here, let me know if you have any questions or want to connect

Rookie Investor - Where To Start?

Most Popular Reply