All Forum Posts by: Todd Anderson

@Dennis Silver, Congrats on the thought of creating Wealth through REI

I have worked with a number of investors in your situation.  For these investors the strategy of long term hold in a good growth market is the type of investment they are looking for.  This brings in a number of income streams.  Not only the cash flow, which you probably don't need right now, but is an important part of the investment.  You don't want to have to continually feed your investment. 

In the right market you can get in the way of appreciation.  Wen investing in a growing market you will not only have a long term tenant paying down your mortgage, but the new people moving in, With the right property,  will increase your value.  

There are also ways to get an income from depreciation of the property.  If done right the depreciation of the property could offset some of your W2 income.  

I would suggest that you stay away from STR/BNB and look more at the long term buy and hold investment. This can be done relatively passive if done with the right turnkey provider.

Best of luck.

@Benjamin Ying,

First off Congrats at making the decision to get started into REI and getting involved with BP. this is a great way to start.

As for your questions.  For OOS investing, one of the most important things to worry about is market.  With the investors I work with, finding a good growth markets in a state that is landlord friendly is the first step.  It is very important to find a market that has good population and job growth.  This will allow you to get in the way of obvious appreciation.  

The next most important thing to find is a good team.  You can do this by finding your own people to fill the positions or use a turnkey option.  I would say that it is very important to have a Property Manager for an OOS investment.  They are the ones protection your investment.  The other important thing that the investors I work with find is that having Boots On The Ground is very important.  This can help with pictures, video, or visits to the property. It will also insure that you are able to find the right submarkets in thew area that you are looking.  Being on the right street is important.   

Lastly, I would never recommend getting into an investment that does not cashflow.  This is the reason for the investment.  Appreciation is a good bonus for long term but the deal is not a good deal if the Cash on Cash return is not there. You will burn yourself out feeding the beast each month.  

I have found in the world that we live in today many of the problems of OOS investing are lessening.  Our world is getting smaller. 

Best of luck, and feel free to connect if you have more questions.

@Kaleb Johnson, Welcome to BP and REI.

 When I started out, I believe that investing locally was the only option. It was a lot harder to invest out of state 30 years ago. In today's world, with the tools we now have, I tell the investors that I work with to invest in the best market and best deal you can.

Do your research on markets and find one that is growing. This means growing in population, jobs, and real estate market. When you find a good growing market you will be able to get in the way of appreciation. This will be obvious appreciation in value and rental income. There are still some great markets for this type of growth.

After you find your target market then you can start looking for deals. For a the new investors I work with, I recommend to look for a turn key deal. Find something with someone who is boots on the ground, that you have talked to and built trust. This person can then get you set up with a builder, if necessary, lending, Insurance, and property management.

There are deals out there that cashflow.  You may need to look around but if you are looking in a good market, that is growing, you can find cashflow.  I do not recommend a deal to the  investors i work with that do not cashflow.  Unless you are planning on doing all the work for the property yourself, I see no reason to invest in your backyard.

Welcome and best of luck, let me know if I can help more.

@David Young, Welcome to the BP community and to REI.

I have worked with a number of first time investors that use a HELOC to start their investing. This can be a very good move if you have plenty of equity tied up in your house. Get that money working for you.

As for where to invest.  When I started out, I believe that investing locally was the only option.  It was a lot harder to invest out of state 30 years ago. In today's world, with the tools we now have, I tell the investors that I work with to invest in the best market and best deal you can.  

Do your research on markets and find one that is growing.  This means growing in population, jobs, and real estate market.  When you find a good growing market you will be able to get in the way of appreciation.  This will be obvious appreciation in value and rental income.   There are still some great markets for this type of growth. 

After you find your target market then you can start looking for deals.  For a the new investors I work with, I recommend to look for a turn key deal.  Find something with someone who is boots on the ground, that you have talked to and built trust.  This person can then get you set up with a builder, if necessary, lending, Insurance, and property management.  

Unless you are planning on doing all the work for the property yourself, I see no reason to invest in your backyard.

Welcome and best of luck,  let me know if I can help more.

@Preet Oberoi,

I would strongly recommend that you look to partner with someone who has experience in this.  A development project can have a very nice upside if done right.  It also is heavily full of risk.  There are pot holes at every step form entitlement to permitting to the vertical and getting CO.  I have done this before and now find the risk just to high.  

If you find someone at a REA or other investor meetup group that is currently in this space it can make your first time go much smoother. Moving from SFR to MF has its own learning curve without the development part.

I wish you the best of luck.  There should be a good number of people out there who would be willing to mentor or partner with you.

@Chase Calhoun,

Congrats of a project well done.  This is a growing trend that many investors are finding works well.  Fro the biggest reason, as you said, you own the home for the Best, First years of its life.  A time when everything works well.  Well done for making the project work out for you.

I have been working with investors in this space for a while. We have found that a strategy that many thinks solves for some problems. If you let the builder carry the construction and holding costs, the GC can get the construction financing. The investor can come in at the CO with end financing. The investors that I work with find this much less risky and a much faster way to get to ROI. They are able to See a COC return within weeks of the down payment, when the unit rents. This lets both the investor and the builder do what they do best.

I think this will continue to be a growing part of the investing landscape.  With the need for more homes overall, and it also gives the renter the ability to have a new home.

Best of luck to you on the next deal.

@Trevor McCormick,

Is there a specific reason to only look at a single market.  Florida has a number of great markets that work well for investment properties, and a  number that no longer work.

There are a few Florida markets that are still in the top growing markets in the country.  The investors that i work with look to theses growing markets of population and jobs to make an investment that both cash flows and will find appreciation.  

One market, near where you are looking, that is still in this phase is the Ocala market. There they are seeing both a great job market, a number of large employers moving in, and are still in the top ten of population growth nationwide. I have worked with a number of investors who have found this to be a good market for REI

Connect if i can help more. Best of luck.

@Renato Fruggiero,

I totally understand your goal of investing in New construction investment property.  I have been working in this area for the past couple years and it is a good area and strategy. 

I would give you one not of cataution.  Because of all the new starts in this area in the past few years, I would not recommend land.  I believe there is a better way.  When you buy raw land or even a lot you will be waiting 1-a number of years, before you see a return on that investment.  It takes so long to get the contractor and permits set that it makes the investment this way risky.  There is also the question of construction financing.  unless you have done this a number of times before, this can be challenging as well.

What I have found works better is to find a builder that will take the property to CO before you need to make an investment.  In this strategy you will see a return as soon as it is rented.  I have found that the investors that I work with appreciate this type of investment.  They are able to find a turnkey investment that will cash flow inside the first month.  

In the area that you are looking there are many opportunities that pose les risk then buying raw land.

Connect with me know if I can get you any more information.  

@Alex Minter,  Congrats on starting your journey.  BP is the right place to start to get both information and connections.  Dou your work on the education so that you can have a firm strategy to get started.  

@Nathan Gesner has given you the best place to get started.

Best of luck.

@Ashish Gambhir, Congrats for getting onto the BP platform for information.  This is the right place to start.  

I have worked with a number of investors that have had good luck in NC.   There are a number of areas that have shown good growth over the years and have great job markets.  It is a good solid place to invest.

Best of Luck.