Advice on how to identify good areas for real estate cashflow?

Question

Hello. My name is Stephen and I am looking into cashflow real estate, potentially single family vs condo homes in the Portland, ME area. My current strategy at the moment is to look for investment opportunities surrounding medical centers and universities in my local area. I would not limit myself to only those areas, but it seems to me that there will always be demand for housing there? I am excited to begin this new chapter in my investing career. I want to start with smaller homes. I am continuing to educate myself in real estate investing and found bigger pockets which has been a great tool. Any advice on the areas listed above or in general to a beginning investor would be greatly appreciated.

Paul Timmins · Answer

@Stephen Marcil

Welcome. Your professional will be a great source of private money.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having 40 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info.

Consider checking out HUD homes for small multi's owner occupied gets first crack.

Niche or Specialized Housing like student housing and medical are great. Rents can be 2-4 times more. One call to the off campus housing office at the college will give you all the info you need. A call to the HR office at the medical facility will give you the housing needs of the co-wworkers they might have a nursing school at the facility. Its all about your branding, exceed their expectations profit greatly. Remember you don't have to own a property to control it.

Good Luck

Paul

Ted Chan · Answer

Hi Stephen,

Welcome to BP. In my area, most of the properties that I've been looking at don't work out with the numbers for cash flow unless I can get it significantly under market price.

I'd encourage you to read the Ultimate Beginner's Guide that Paul pointed out.

Also, you can enable alerts and add keywords that you're interested in by going to

http://www.biggerpockets.com/alerts

And there's always some great articles at:

http://www.biggerpockets.com/renewsblog/

Raymond B. · Answer

@Stephen Marcil,

Click on the "learn tab" at the top of this page and you could be spending many hours on the Information that is available

Raymond

Stephen Marcil · Answer

Thank you for all of your responses I found them very helpful. Does anyone know of any books/educational tools that they would recommend for a beginning RE investor? Also, I have done some research regarding the demographics in southern Maine vs New Hampshire (Portsmouth area). According to the 2010 census, the largest areas in Maine grew ~ 3% regarding population, over the past decade compared to New Hampshire with 10-12%.  I would think that either area could produce good RE deals, but the larger growth rate in New Hampshire makes me think it may be a better area for RE appreciation. Any thoughts would be appreciated. Thank you for your time.

Ali Boone · Answer

For a newbie, my biggest advice is to just make sure the numbers work! If you expenses are close to or more than the rents you can bring in, you will lose money. Not all areas are options for positive cash flow properties, so just make sure yours is.

Good luck!

Joe Fairless · Answer

@Stephen Marcil - the #1 thing to look for when qualifying a market is jobs. Then population then making sure it's landlord friendly (i.e. you can kick someone out in 45 days or less if they aren't paying rent). I like your logic of buying near office/medical but I wouldn't make that my primary focus. Instead, I'd speak to a property mgmt company and ask them about the areas that they recommend based on their experience.

Lastly, after all that is taken into account, it simply boils down to #s. How much do you put in and how much do you get it. All my homes get at least 1.4% rent of the purchase price.

Liam Goble · Answer

@Stephen_Marcil, I live in State College PA, home of PSU.  For me, the properties have been too expensive because the student population drives rent rates through the roof.  The 1% rule doesn't hold here in State College.  A lot of properties sell at the 0.5% rule!  PSU is the economic engine for the area and so the immediate areas surrounding the university are usually well-rented.  
	
	My wife and I have been interested in the Portland, ME area for a while.  We were actually up in October looking at a few neighborhoods for potential rentals at some point in the future.  Would this be your first rental property?

Patrick Snyder · Answer

for me, the downtown area, and neighborhoods close to higher education are easy to rent.  You could always check with a local property manager, too.  He or she should be able to give you great ideas, and may has w some leads on good properties.

Good luck!

Advice on how to identify good areas for real estate cashflow?

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