All Forum Posts by: Juan Lizarazo

Hi @Jennifer Cramer, welcome to bigger pockets!

I am real state investor starting and building out (I have 3 properties now) and doing so from out-of-state. I've navigated the complexities of multiple markets and would be more than happy to share some insights. If it's easier, we can set up a Zoom or video chat to discuss further. I am happy to give advice if that helps you!

It sounds like you're feeling a tad overwhelmed by the vastness of options, given the entire U.S. market at your disposal. But here's the silver lining: you've already demonstrated a proactive mindset by taking the initial steps. Now, let's fine-tune that approach.

From your post, you mentioned: "Initial budget is small, up to 300K with 25% down for the first property. Looking for Class A/B areas. I don't really care about making a profit off the monthly rent."

A few thoughts on this:

1. Budget: First and foremost, $300k is a commendable starting point. It positions you well for many markets. I would use that target to get not one but two properties, with 20% down to keep most of your money whenever possible.
2. Class A/B areas: I'd advise some caution with Class A properties. They often don't yield immediate returns, with rents potentially falling short of covering mortgages.
3. Profit: Remember, as a real estate investor, your goal isn't just property acquisition; it's wealth generation. The profitability of monthly rents is important. There will be vacancy, maintenance, unexpected expenses, and this should not come from your w2 job, or from your pocket!

Diving deeper into property classifications:

• Class A properties are generally more suited for homeowners rather than investors. New constructions might be an exception, but even they can be a gamble. Plus, renting out a brand-new property to tenants? Not always the best strategy.
  
  
• As new investors, our sweet spot often lies in Class B and Class C properties. They offer a balance between quality and return potential. I'd suggest steering clear of Class D to F.
• Investing primarily in Class A properties can sometimes become a play on appreciation. While there's potential there, it's speculative. Market values are unpredictable. Sure, they can surge, resulting in gains. But they can also plummet, leading to losses. Always remember: as investors, our core philosophy should revolve around sound numbers and consistent returns. If an investment continually drains your wallet, it's time to reconsider.

In the world of real estate investing, target returns like Cash on Cash of 8% or higher should be your guiding star. After all, it's about maximizing value for every dollar invested. The returns can improve over time if you re-finance, etc, but don't bet on it. As an investor, you gotta know your numbers. Run them with current interest rates. Lenders might tell you it's ok if you loose $100 from your pocket, rates will go down next year. Pass! don't bet on it. If they do, sweet, you make more money. If they don't, sweet, you are still making money regardless.

This is my personal advice and what is working for me.

I'll DM you in case you want to chat more!

@Jason Allen, thank you! I started in Kentucky and it went pretty well. Which parts of Ohio would you recommend? I like Ohio. I haven't settled in a market yet. I tried one offer in Cleveland that didn't work out. Still looking to enter Ohio. 

Columbus is too high, hard to cash flow. 

I am looking to buy and hold. 

Thank you so much for your responses! This was fantastic info!

What are your thoughts on Shawnee and Park duvalle? I am looking into those areas. Houses have appreciated it a lot lately there but they still have a low entry barrier for new investors. I do see a high demand in rentals as well, checking zillow I see lots of applications for all the properties there. 30 applications - listed 40 days, etc. 

From your post, the locations I am looking at are barely 2 miles from the neighborhoods you mention. I am just looking for cashflow and buy and holds.

Would you invest or recommend those neighborhoods? I am looking at a few properties there? I would greatly appreciate your input as you are a local investor in the Area. 

Thanks!

Hey beautiful community! I'm just starting out and I'm looking at two markets for buying properties. I want to start by focusing on just one of these markets, both of which I really like and align well with my financial goals.

I'm more interested in cash flow rather than property appreciation, and I'll be investing from out-of-state.

Would love your recommendations on:

- Top neighborhoods or areas to consider for strong rental returns, and maybe areas to steer clear of

- Trusted property management companies or contacts in these markets

- Realtors specializing in these two areas

I'm open to all ideas and might end up choosing one market, the other, or even both. Looking forward to your insights!

I want to start networking and building out the team I will be working with.