All Forum Posts by: Kevin S.

Hi,

How to find online any railroad track or crossing gate near potential rental property to avoid noise and also traffic when the rail road gate closes. Please advise

Hello @Allen Zhu,

You asked excellent questions, and I agree with Kevin that they call for long answers. I will do my best to be helpful and keep my post reasonable in length.

Selecting a good investment city and property is straightforward. I will explain the process below. Reach out if you have questions.

Let me first share my key assumptions:

• Tenants, not properties, pay rent. A reliable tenant is invaluable—they stay many years, pay the rent on schedule, and care for the property.
• Renters are diverse. Each tenant segment has specific housing requirements and will not rent properties that don't meet those requirements.
• Real estate investing is about long-term financial freedom. Your rental income must outpace inflation, last your lifetime, replace your current income, and continue even when the economy dips.

If we agree on that, here’s how I approach location and property selection:

Location is King

Where you invest dictates your long-term income potential. Look for cities with:

• Strong, consistent population growth: More people needing housing drive up rental demand.
• Rapid property appreciation of existing properties: This lets you acquire more properties with less cash.
• Job growth: Your tenants need jobs to pay rent. Focus on cities that attract new companies. When companies choose a location, they consider:
  • Metro population over 1 million: A large, skilled workforce and robust infrastructure. Wikipedia's Metropolitan Statistical Area page
  • Low Crime Rates: High crime deters businesses and residents. Do not invest in any city on this list.
  • Low Operating Costs: Companies seek locations that allow them to remain competitive, avoiding areas with high taxes and regulations. Property taxes are a good indicator of overall operating costs. LendingTree
  • Low Risk of Natural Disasters: Companies are wary of areas prone to natural disasters. The best indicator of natural disaster risk is homeowners insurance costs. Do not invest in cities with high insurance rates.

Property Selection: Target Your Tenant

Instead of buying a property and hoping for reliable tenants, flip the script: identify a tenant segment with a high concentration of reliable people. Talk to local property managers to determine the right segment (reach out if you want specific questions to ask). Once you've identified your target segment, observe what and where they're renting. Then, buy similar properties. The key is meeting the housing requirements of the people you want as tenants, not guessing. Depending on the city and the tenant group, this approach is adaptable—it could be condos, single-family homes, or townhouses. And the principle applies universally to in-state or out-of-state investments.

I hope this helps.

Quote from @Kevin S.:

Doing business with friends and family is dangerous. If someone screws up, it destroys the investment and the relationship. Most business experts will tell you that it's very difficult to partner with family and be successful, because family is more likely to see it as a familial relationship and not a business relationship.

If you want to help him get started, maybe provide a small loan with a robust repayment plan, drawn up by an attorney, then provide education / mentorship for free.

I would be very careful about partnering this early in your career. Get some experience yourself before you bring someone else into the mix, especially a 50/50 partner. Really dig into partnerships and how to structure them, to include how to exit when things get rough or one of you wants to move on to something different.

As for starting, the market isn't ideal, but you can't continue sitting on the sidelines. You missed out in 2020. What's to say you won't have the same feeling in 2028? Buy one property with up to four units and start managing it. Figure out the next step after that.