Starting out - long distance investing

[Nick Bandiera]

Hi all,

I currently live in an apartment in downtown San Diego but looking to start my journey.

I recently was laid off and have had it with working a 9-5. Luckily I have 4 months pay and a large lump sum of money to invest. I told myself I would go 2 months studying long distance investing before I take a new job. I have about $40,000 realistically that I can invest. What is the best strategy? I was thinking about finding a cheap house in the Toledo area as I have family there but would be open to any/all ideas, partnerships, market recommendations. I’m looking for something that can cash flow a few hundred per month just so I can rip the bandaid off and look towards property #2. 

please reach out to me directly or to this post if interested in helping me out. 

Nick 

[Dave Poeppelmeier]

Quote from @Nick Bandiera:

Hi all,

I currently live in an apartment in downtown San Diego but looking to start my journey.

I recently was laid off and have had it with working a 9-5. Luckily I have 4 months pay and a large lump sum of money to invest. I told myself I would go 2 months studying long distance investing before I take a new job. I have about $40,000 realistically that I can invest. What is the best strategy? I was thinking about finding a cheap house in the Toledo area as I have family there but would be open to any/all ideas, partnerships, market recommendations. I’m looking for something that can cash flow a few hundred per month just so I can rip the bandaid off and look towards property #2. 

please reach out to me directly or to this post if interested in helping me out. 

Nick 

 Hey Nick, Toledo is a good market to get started out in since our purchase prices in general are a lot lower than most areas of the US. $40k can get you started with conventional financing on a $80-100k SF house in a C class neighborhood and give you money for any rehab that needs done as well. One of the biggest things new investors don't account for is having reserves after you purchase and renovate (if you have to) a property. I may or may not have found this out the hard way. Just know that until you get up to 6-7 properties, the house will not likely "stand on their own". You'll likely be writing a personal check here and there to replace a roof, a furnace that suddenly dies, a tenant does something really stupid, etc. 

With that being said, as Snoop Dogg's dad sagely advised, "Snoop Doggy Dog, you need a jobby job!" You're not going to get approved for any kind of loan without employment, and they typically want 2 months of pay stubs. I also know what it's like to work a job you hate and just want to get into Real Estate, but Real Estate is a Marathon, not a sprint. It's great that you want to learn about investing and you're willing to take the time to do that, but banks don't care. So, I would suggest get another job and just keep listening to books, podcasts, etc. Let me know if you have any other questions.