New SFR investor looking for cash flow in Texas

[Robert Friedl]

Hello! I recently started listening to the podcast and I wanted some pragmatic advice from you guys and gals about my situation. So I currently do not own any real-estate and a vast majority of my net worth is tied up in Bitcoin. The reason I mention that is I can get a 5 year loan through Celsius for 2.95% interest that could pay for a 20% or 25% down-payment.

 I live in California but I want to invest in property in Central Texas, not necessarily in Austin but close enough to grow in the coming years from proximity. (Im from Texas, does that help me in some way?) Since this will be my first house I want to focus on Cash Flow more so than appreciation but not entirely. 

I'm still very new to Real Estate investing and obviously still learning but if there are things you would do in my shoes I would love to hear any advice. 

-Such as which neighborhoods look promising, what size should I look for? ( I was thinking 3 bedroom, 2 bath)

Thank You!

[Jim Parker]

Hello Robert and best of luck with your future adventures.  Cash always flows in all Real Estate investments, the variable is which direction that cash flows.  :)

I must say that I can't recommend an out-of-state purchase and lease from halfway across the country.  Unless you pay local professionals to manage and maintain the property this will quite likely become a house of pain for you.  Located down the street and managed by yourself is a better formula for maximizing positive cash flow as opposed to maximizing negative cash flow.

Most mortgages will not write a loan with the down payment borrowed, which is effectively what a Celsius loan would be here.  Someone in the private/hard money channels might do it but I'd hate to see the interest rate and terms associated with that note.  Another factor that drives cash flow in the wrong direction.

My advice for your first is to either live in it or live close to is and bring the cash to the financing party.  Get fancy with future deals.