All Forum Posts by: Melissa Justice

@Jaida Jackson,

Welcome to the BiggerPockets community! It's exciting to see someone so young diving into real estate. For beginners, I'd recommend focusing on understanding the fundamentals first: cash flow, ROI, and the market dynamics. Since you're interested in short-term rentals, learning about local regulations and the competition in your area will be key.

If you're just starting out, a great way to get your feet wet is by networking with experienced investors, learning from their stories, and finding mentorship. There are also plenty of resources here, including blogs, podcasts, and books, to help you develop a solid foundation.

Looking into turnkey rental properties can be a smart way to get started — it allows you to learn the ins and outs of investing without taking on major renovation projects right away. Feel free to reach out if you have any questions!

Best of luck,

Melissa Justice

Investment Strategist at Rent to Retirement

@Andy Sabisch,

Great scenario — thanks for laying it out clearly! Here's a breakdown of how to think through each point, especially with an eye on scaling and simplifying as you relocate:

1) Keep vs. Sell the Cash-Flowing Duplex?
$725/month is excellent cash flow, especially in a strong rental area with good tenants. If the management is solid and the property is relatively hassle-free, it might make sense to hold for now, especially if:
- It’s appreciating.
- You can refi later and pull equity.
- You're not maxing out on mortgage limits or time for management.

However, selling could be strategic if your goal is local scale, simpler oversight, and stronger long-term ROI. Using that $100K to buy 4 rentals in a concentrated market (near you) could mean:
- Greater economies of scale.
- Local PM oversight.
- Easier renovations/maintenance.
- Faster snowball effect.

If your long-term vision is lifestyle + scale, then converting one duplex into four rentals might be a smart tradeoff, especially since you're not exiting real estate, just reallocating more intentionally.

2) Lenders + Sub-$100K Properties

You're right — many conventional lenders avoid properties under $100K. Here are a few alternatives:
- Local/regional banks in the area you’re moving to — they often do portfolio loans and are comfortable with these price points.
- DSCR lenders (Debt Service Coverage Ratio) — many will finance these properties if the rent-to-price ratio is strong enough (and it sounds like it is).

Yes, going with 25% down is more lender-friendly and may get you better terms, but it’s not your only route.

3) Other Ideas:
- Consider a 1031 exchange if you want to defer capital gains and roll your duplex sale into 3–4 new builds or fully rehabbed properties — again, turnkey can be helpful here.
- If you're unsure about selling just yet, explore a cash-out refinance on the duplex to fund a couple local deals and hold the asset longer term.

Selling the duplex could unlock significant momentum, especially if you’re relocating and want your portfolio to align with your new life. If you’re planning to be more hands-on or want tighter control, reallocating that equity into 3–4 cash-flowing SFRs in your new market might be the move.

Best of luck,

Melissa Justice

Investment Strategist at Rent to Retirement

@Jacob Yang,

Welcome to the forum and props for taking action — analysis paralysis is super common in the beginning, but it’s a good sign you’re being thoughtful before jumping in.

Sacramento is still an active market with strong fundamentals, especially for flips and long-term appreciation plays, though margins can be tight if you're not disciplined on your buy box and rehab budget.

Here’s what I’d recommend:
1. Narrow Your Criteria
Define what a "good deal" looks like to you — price range, neighborhood class (A/B/C), exit strategy (flip or BRRRR), and target ROI. This will help your agent and lenders filter quickly for you.

2. Investor-Friendly Agent
Look for agents who specialize in working with investors — not just regular homebuyers. You’ll want someone who:
- Knows ARV calculations
- Can identify off-market or distressed leads
- Has flipper/rehabber clients
Check BiggerPockets' agent finder or Facebook groups like *California Real Estate Investors Network*.

3. Hard Money Lenders
Some solid national and CA-based options include:
- Kiavi
- Lima One
- Civic Financial
- Longhorn Investments
- Ask your agent or other investors in forums for referrals too — local lenders often move faster.

4. Start Small & Get in the Game
Paralysis often goes away after that first deal. Even if you just wholesale or partner on one to get experience, that momentum will be huge.

If you're also open to turnkey investing in more cash-flowing, affordable markets (like the Midwest or Southeast), that's another solid entry point that doesn’t require managing construction or deep analysis paralysis — happy to share more if you're curious.

Wishing you much success!

Melissa Justice

Investment Strategist at Rent to Retirement

Quote from @Reed Lederman:

@Melissa Justice I have a call set up with your service in a coup weeks. Looking forward to what you guys have to offer. Curious if you also do property management for the properties you sell or if you just facilitate the deals and then are hands off from there. I was looking at some of your calculations and it wasn't super clear if property management wasn't included in calculations because of a "deal" you were offering for 1 year free PM or if it wasn't factored in because you're assuming the buyer will self manage. 

That’s a great question — and thanks for setting up a call, excited for you to learn more!

With Rent To Retirement, we do not self-manage the properties we offer, but we partner with vetted local property management companies in each market. Our role is to facilitate the deal and help you build your team — so once you close, you're connected with a PM that knows the property and area well.

Regarding the calculations: typically, property management fees are factored into the pro formas, usually around 8–10%. However, in some cases where we’re offering a promotion like the first year of free property management, the numbers may show a temporary boost in cash flow. That’s why you might not have seen a PM fee in those particular examples.

Your investment counselor, @Lars Kappler can walk you through the numbers line by line and clarify what’s included. Best of luck!

@Ven Perla,

Hey Ven – welcome to the BP community and congrats on diving in! You're doing exactly what so many successful investors do: educating yourself, getting clarity, and taking intentional steps.

You're looking in some really solid hybrid markets that balance cash flow with long-term growth — and you're right to consider turnkey rentals as part of your strategy, especially with reliable PM in place. Companies like ours at Rent To Retirement actually specialize in exactly the type of markets you’re targeting — Huntsville, Ocala, parts of Texas — with new builds and fully rehabbed properties ready to go with tenants and management in place. That can make your first out-of-state investment much smoother.

As for Indiana/Ohio — South Bend, IN and Akron, OH are both strong considerations. South Bend has Notre Dame, consistent rental demand, and investor-friendly zoning. Akron is stable with solid rent-to-price ratios, and both have turnkey options available.

Happy to connect more and walk through recent deal examples or help you narrow down the right market fit. You’re off to a strong start!

Wishing you much succcess!

Melissa Justice

Investment Strategist

@Mark Morosky,

Hey there — I’m in Michigan too! 👋

It’s not crazy at all to invest out of state for your first property — plenty of investors do it successfully, especially when they live in markets that don’t cash flow well or have high barriers to entry. The key is building a solid “Core 4” team: agent, lender, property manager, and contractor (if rehab is involved). That team is what turns an out-of-state property into a manageable investment.

Turnkey properties are a great way to ease in — especially if you're working full-time or want less hands-on involvement. Providers like ours at Rent To Retirement offer fully renovated or new construction rentals with tenants and property management already in place in strong cash-flow markets.

Happy to compare a few cities or help point you in the right direction!

Best of luck,

Melissa Justice

Investment Strategist

@Reed Lederman, First off, huge respect to you for balancing a dental practice, fatherhood, and now diving into real estate investing—your plate is definitely full, and it sounds like you’re approaching this with the right mindset. Given your limited time and desire for a more passive approach, you’re absolutely on the right track looking into out-of-state, property-managed rentals in Class B neighborhoods. They tend to offer a great balance of stability and cash flow. Since you already have some foundational experience through your parents, you’re ahead of many first-timers. If BRRRR interests you but you’re concerned about the time commitment (rightfully so), you might consider a more turnkey route for your first couple of deals—ideally in markets where the property manager, lender, and contractor are all aligned. That way, you can learn the systems and build confidence without spreading yourself too thin. I’d be happy to share what I’ve learned from my own investing journey and help you navigate your first deal. Wishing you the best on this next chapter! Melissa Justice Investment Strategist at Rent to Retirement

Hey @Benjamin Pena,

Welcome to the world of real estate investing and BP! 🎉

Some of my simple newbie tips:
Get clear on your goals — cash flow, appreciation, or long-term wealth?

Pick a strategy — turnkey rentals, house hacking, BRRRR, etc.

Choose a market — look for landlord-friendly states with strong rent-to-price ratios.

Build your team — agent, lender, property manager, and contractor (if needed).

Take action — analysis is important, but progress comes from doing!

You don’t need to know everything to get started — just enough to make your first smart move. You've got this! 💪

Wishing you much success,

Melissa Justice

Investment Strategist at Rent to Retirement

@Felix Sharpe hey!

Congrats on being so close to Door No. 2 — that’s a big step forward! Based on what you’ve shared, a few thoughts:

A 7%–9.5% cash-on-cash return on new construction is quite solid, especially in today’s interest rate environment. New builds generally mean:
Lower maintenance costs

Fewer surprises

Attracts quality tenants

Better depreciation/tax benefits (especially if cost segregation is done early)

So from a deal standpoint, it sounds like you’ve found something worth considering — particularly if it’s in a landlord-friendly, high-demand market.

On Borrowing from the 401(k)- This can be a smart short-term play if you’re disciplined. 
Pros:
You’re paying yourself back with interest.

You avoid taking on high-interest debt from banks.

You’re leveraging money that might otherwise be idle or underperforming.

If you repay within the timeline, there’s no tax hit or early withdrawal penalty.

Cons:
You’re taking that money out of the market temporarily (opportunity cost).

If you leave your W-2 job for any reason, that loan may become due faster.

It's important to factor in the repayment plan and ensure the rental cash flow doesn’t get too tight.

If this property is through a turnkey provider that includes property management, rehab, and tenant placement — like us at Rent To Retirement — you’re mitigating a lot of the risk of surprises. That adds a safety net when using funds like your 401(k).

Since you plan to repay the loan in a year, and the property cash flows with a strong return, I’d personally lean toward yes — as long as you're confident in the stability of your W-2 and the market fundamentals of where you're investing.

Wishing you much success!

Melissa Justice

Investment Strategist

Hey @Sarah Patel,

Welcome to the BP community!

First of all—kudos to you both for even thinking long-term and strategically while juggling family and demanding W2 jobs. That mindset puts you ahead of the game. Now, to your question: Is it worth investing out of state if you’re new and busy with life? The short answer is: Yes — if you go turnkey.

Given your situation — full-time work, toddler, another baby on the way — trying to self-manage a short-term rental, especially in a heavily regulated area like Chicagoland, can quickly become overwhelming. That’s where turnkey properties come in. These are fully renovated, professionally managed rentals that are ready to go from day one. You buy it, and the cash flow starts while your life goes on.

How Turnkey Investing Solves Your Concerns -
Hands-off management: You get property management built in — no coordinating repairs or finding tenants.

Remote-friendly: You don’t have to visit the property to manage it. Everything can be handled digitally with regular updates from your team.

Done-for-you team: The “core four” (realtor, contractor, PM, lender) is already in place.

Cash flow from day one: Many turnkey providers focus on cash-flowing markets where returns are stronger than high-cost areas like Chicago.

More scalable: Once you own your first turnkey rental and see it working, you can repeat the process with confidence — even while raising a family.

If you’re thinking of investing out of state, markets like:

South Bend, IN (just a short drive from you)

Memphis, TN

Akron, OH

Locust Grove, GA

These areas are popular among investors for their affordability, stable rental demand, and landlord-friendly laws — and turnkey providers are already active there.

Short-term rentals (STRs) sound exciting, but they require constant attention, reviews, guest communication, pricing adjustments, etc. That’s a part-time job on its own. With turnkeys, you start with long-term tenants, professional management, and passive income — which seems like a better fit for your stage of life.

You're absolutely right to be thinking about tax strategy. If the bonus depreciation changes return under the current administration, it could enhance the upfront tax benefits on new acquisitions — especially on turnkey new construction or rehabbed properties where cost segregation can apply. Let me know if you want to discuss more in depth!

Wishing you much success!

Melissa Justice

Investment Strategist at Rent to Retirement