Newbie Investor looking for Guidance

[Alden Fernandes]

Hi Guys,

New Investor here looking for some guidance. My family and I recently moved to Southern California from New Jersey. We sold our home in NJ, and decided to rent here in SoCal. We have a good amount of liquadable assets that we would like to start investing into RE with, as we don't plan on buying our primary home in the near future. We also both work full time jobs, with zero debt.

Because property prices are so high here in California, I am leaning towards investing in out of state rentals. 

I am a total newbie, so I am looking for some advice and direction. Please let me know if I am going on the right path.

I have read a few posts on this forum, and have place holds on the following books at my library to get started:

Short Term Rental - Avery Carl

Long Distance Real estate investing - David Greene

I also found a meetup close by, that I will start attending with my wife.

Please let me know if there are any other books or resources that I should be checking out as we start our Journey.

Thank you in advance, and appreciate this community.

[Austen Mueller]

I would say your going down the right path for sure. SoCal is a pricey market. Sounds like next steps for you are choosing a market to invest in and finding a property mangmemt in that state to mange your assets for you. I'm an agent out here in Pennsylvania. Always happy to chat about the markets here and real esate in general. 

Good luck! 

[Najma Osman]

Hey @Alden Fernandes, 

The easiest way to get into RE investing is to house hack, however, I understand that is not an option for everyone's situation. I would recommend deciding what you want to invest in first.
Are you looking into single family or multi-family. Do you plan to rent it out as a STR/MTR or LTR?

Once you know what your plan is, figure out where you're investing. If the numbers do not work where you live, look at investing in other markets. A good place to start would be markets in the Midwest with lots of population growth and job opportunities. Either way when considering OOS investing, look for markets with strong economic fundamentals, such as job growth, population growth, and low unemployment rates. This can help ensure that there is a demand for rental properties in the area. I personally invest in Columbus, Ohio.

When you have your market, connect with a local investor-friendly real estate agent. It's important to work with a trusted agent who has experience in the local market. They can provide valuable insights about the property, its condition, and the local rental market. From there you find a good investment and go for it! 

[Joseph Guzzardi Jr]

@Alden Fernandes  Hey Alden, If I was in your position I would begin attending meetups in your local areas. Attend many and various kinds of these events and do so frequently. You will eventually build rapport with people who are experienced, and actively investing in the type of asset and location you are looking for. Your best bet would be to partner with these folks, learn the ropes, accelerate your learning curve and then over time do this on your own. 

[Jared Hottle]

Alden, hope all is well! Would love to connect. I have seen this alot being an agent in the Midwest helping people invest in the Midwest from the coasts. I think it can be great just requires more detailed work to find boots on the ground you can trust. Would love to connect and discuss more!

[Hamp Lee III]

Welcome to BiggerPockets!

Check out these books and resources:

1️⃣ Download this ultimate beginner’s guide: https://assets2.biggerpockets.com/uploads/user_file/file_object/1694/UBG_2018.pdf

2️⃣ Read BP beginner books on investing: https://store.biggerpockets.co...

Also, read Think and Grow Rich by Napoleon Hill

3️⃣ Consider joining a BP bootcamp: https://www.biggerpockets.com/blog/real-estate-investing-bootcamps

I wish you all the best.

[Dave Skow]

@Alden Fernandes- thanks ...I  receommend  starting  with  getting a  loan pre approval  in place  for  whatever  scenario you want to use as a starting point  ...this will help get you  prepared /  organized and  educated  about the  financing  step and   also so you can  learn where the  numbers   are  (  cash needed/ payment / rate / fees /  down payment etc ....)   good luck

[Melissa Nash]

Hello from SoCal! I am here locally too! I do invest in STR's in SoCal- bc the cashflow makes sense, but I don't do LTR in CA for many reasons, I buy exclusively out of state for those. Happy to connect with you!

[Sherri Perry]

thank you for all these references! I'm a newbie too! 

[Sheryl Sitman]

As you surely notice there are endless resources for learning and also endless ways to invest. I definitely encourage you to listen to a few podcasts each day and to participate in the forums here. But it will be overwhelming without taking some initial important steps. Whem my husband and I started investing 14 years ago, we didn't even live in the United States or have a strategy. Just knew we needed to get our money working in real estate. Back then by being cautious and a little bit lucky our first investments turned out very well. It took us years to learn how to create a strategy and a plan and to set our goals in a way that matched up with our risk tolerance and personal circumstances. Today we are full-time investors and have built something very nice to pass on to our kids. I see new investors blindly following the gurus and hype and it can go very wrong. But my suggestion is to curate the info out there to match your circumstances and dont take everything at face value. We are now offering down to earth guidance for jumping the learning curve and setting investors up with our established teams in multiple markets (we invest in several regions and are dynamic in our approach as markets change and we change) . Whatever approach you take, keep learning and know that the market is very dynamic so what was being hyped 2 years ago will be totally irrelevant today. STR is a good example of an approach that you really need to deeply understand and be ready to pivot at any moment... Good luck!! Feel free to reach out.

[Peter Mckernan]

Quote from @Alden Fernandes:

Hi Guys,

New Investor here looking for some guidance. My family and I recently moved to Southern California from New Jersey. We sold our home in NJ, and decided to rent here in SoCal. We have a good amount of liquadable assets that we would like to start investing into RE with, as we don't plan on buying our primary home in the near future. We also both work full time jobs, with zero debt.

Because property prices are so high here in California, I am leaning towards investing in out of state rentals. 

I am a total newbie, so I am looking for some advice and direction. Please let me know if I am going on the right path.

I have read a few posts on this forum, and have place holds on the following books at my library to get started:

Short Term Rental - Avery Carl

Long Distance Real estate investing - David Greene

I also found a meetup close by, that I will start attending with my wife.

Please let me know if there are any other books or resources that I should be checking out as we start our Journey.

Thank you in advance, and appreciate this community.

 Good to have you here Alden! 

This market is expensive, and with that money your family you are sitting on, I would suggest two things. One is yes look out of state to get your money working for you right now and the second suggestion is keep some on the side to buy your primary home FHA/Low down first time home buyer. This gives you two things, tax write offs and equity building opportunities for placing that money in another asset to buy more.

The best option would be house hack with a duplex or a triplex here is SoCal after you make a couple of investments out of state. This would be great to reduce that expense of living each month for having that property that you are renting out and living in one of the units. Some thoughts because you have the ability to make your financial situation that much better! 

[Harrison Chow]

Quote from @Alden Fernandes:

Hi Guys,

New Investor here looking for some guidance. My family and I recently moved to Southern California from New Jersey. We sold our home in NJ, and decided to rent here in SoCal. We have a good amount of liquadable assets that we would like to start investing into RE with, as we don't plan on buying our primary home in the near future. We also both work full time jobs, with zero debt.

Because property prices are so high here in California, I am leaning towards investing in out of state rentals. 

I am a total newbie, so I am looking for some advice and direction. Please let me know if I am going on the right path.

I have read a few posts on this forum, and have place holds on the following books at my library to get started:

Short Term Rental - Avery Carl

Long Distance Real estate investing - David Greene

I also found a meetup close by, that I will start attending with my wife.

Please let me know if there are any other books or resources that I should be checking out as we start our Journey.

Thank you in advance, and appreciate this community.

Hi Alden! Typically, I would suggest starting with a local investment strategy such as househacking to get your feet wet. But understandably for some, that may not be feasible for various reasons. 

When considering OOS investing, look for markets with strong economic growth, low vacancy rates, and a stable rental market. Analyze factors such as population growth, job opportunities, and unemployment rates. Ohio could be a promising choice, given its lively cities like Columbus, Cincinnati, and Cleveland. I personally focus my investments in Columbus. The city has recently experienced a significant surge in property values, which is expected to continue in the foreseeable future. This growth can be attributed to substantial investments from major corporations like Intel, Honda, Nationwide Children's Hospital, and Wexner Medical Center, creating numerous employment opportunities. Additionally, Ohio's laws concerning landlord-tenant relationships generally favor landlords.

Connect with real estate agents, property managers, and other professionals in the areas you are interested in investing. They can provide valuable insights, market knowledge, and assist you in finding suitable properties. Consulting with an experienced real estate agent can help ensure you make informed decisions. Since you live in Southern California, it's essential to have a reliable property management team in place. They will handle day-to-day operations, tenant screening, rent collection, property maintenance, and other crucial aspects of property management. Research and choose a reputable property management company to help streamline your investment process.

Hope this helps and let me know if you'd want to discuss this further! Best of luck in your real estate journey!

[Anthony L Amos Jr]

Quote from @Alden Fernandes:

Hi Guys,

New Investor here looking for some guidance. My family and I recently moved to Southern California from New Jersey. We sold our home in NJ, and decided to rent here in SoCal. We have a good amount of liquadable assets that we would like to start investing into RE with, as we don't plan on buying our primary home in the near future. We also both work full time jobs, with zero debt.

Because property prices are so high here in California, I am leaning towards investing in out of state rentals. 

I am a total newbie, so I am looking for some advice and direction. Please let me know if I am going on the right path.

I have read a few posts on this forum, and have place holds on the following books at my library to get started:

Short Term Rental - Avery Carl

Long Distance Real estate investing - David Greene

I also found a meetup close by, that I will start attending with my wife.

Please let me know if there are any other books or resources that I should be checking out as we start our Journey.

Thank you in advance, and appreciate this community.

 Joining your local Real Estate Investor Association is a good start. Check out some local facebook groups, continue to be active on BP, and listen to podcasts. Books that I have enjoyed is Rich Dad/Poor Dad, Get Free Houses (Rutherford), and Millionaire Real Estate Investor (Keller)

[Account Closed]

Sounds like you are positioning yourself well, reading books and attending meetups. Keep chipping away at this, and then select a market if you're set on out of state. I would recommend giving Cleveland, Oh and Columbus, OH a look!

[Steven Foster Wilson]

Hey Alden, great position to be in. You should consider investing in OOS in Columbus. The price to rent ratio makes for great investments. Not to mention our appreciation has been 8% higher than the US national average, because of the high demand for affordable housing.

[Vicki X.]

@Alden Fernandes I think you are making the right choice and taking the right actions. There have been some really good answers above. Here's my thoughts on OOS: 

OOS investing has become quite common. Here are the major considerations in evaluating different markets:

• Your budget: are you looking to buy under $200K, $200-300K, $300-500K or higher? It can help you create a short list

• Population growth, employment growth, wage growth, composition of business types are the most important factors in the health of the market. There are many analysis, charts out there. Specifically. places where the millennials are attracted to are interesting as they are becoming the biggest renter and homebuyer group

  (Note: Be careful with 'historical' data. The top growing markets in the last 2 years are unlikely the most sound choices. Good examples are Austin and Phoenix. Try to add the futuristic lenses into your analysis whenever you can. In the ideal case, there be a "new California" emerging somewhere in the next 10 years. But to be frank, CA's trajectory is impossible to replicate as working remote has become more prevalent, companies more “decentralized”, and more people think about not just professions, but also lifestyles these days).

• Are you able to find trustworthy realtors/PMs or even service providers? Do not get into a market before you know whom to work with. Many investors interview many to find the best one. In my case, I started in the Houston area as my friend had very good recommendations for me. So use your network to get more ideas!

• Run the numbers to understand the cash flow, and pay attention to the major cost such as the effective property tax rates. It typically range from 0.5%-2%+

• Rental regulations as some States are more friendly to renters while some more friendly to investors

• Distance to you. If you find a good area 2-5 hours drive from you, it’ll be easier to meet your team and check out the properties in person

• Certain hazards or costs that you want to avoid. Drought, flooding, snowstorms, tornados, just to name a few

Some other considerations:

• Form an opinion about where you'd like to live in the future, and factor that in. Even if you work with PMs, being close to your properties will still be a plus.
• Also decide whether cash flow is most important for you, or good enough cash flow with less hassle, higher quality tenants, or even appreciation potential. That will determine the type of properties and the price range you want to focus on.

States that are popular these days: FL, GA, NC, TN, OH, TX, IN, AL

[Jimmy Lieu]

Quote from @Alden Fernandes:

Hi Guys,

New Investor here looking for some guidance. My family and I recently moved to Southern California from New Jersey. We sold our home in NJ, and decided to rent here in SoCal. We have a good amount of liquadable assets that we would like to start investing into RE with, as we don't plan on buying our primary home in the near future. We also both work full time jobs, with zero debt.

Because property prices are so high here in California, I am leaning towards investing in out of state rentals. 

I am a total newbie, so I am looking for some advice and direction. Please let me know if I am going on the right path.

I have read a few posts on this forum, and have place holds on the following books at my library to get started:

Short Term Rental - Avery Carl

Long Distance Real estate investing - David Greene

I also found a meetup close by, that I will start attending with my wife.

Please let me know if there are any other books or resources that I should be checking out as we start our Journey.

Thank you in advance, and appreciate this community.

Hi Alden, I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. Just a few weeks ago, I helped a client close on a deal getting them 20% cash on cash return. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!

[Aj Parikh]

Hi Alden, I am a huge fan of out of state investing and Long Distance Real Estate Investing was one of the first books I read before I built my portfolio in Cleveland. One of the strategies I used was working with a couple of turnkey companies and getting started in a mid-west market. I would love to connect and help out so feel free to reach out. 

[Fe F.]

@Sheryl Sitman hey there! can you tell me a little bit more about what you meant by "We are now offering down to earth guidance for jumping the learning curve and setting investors up with our established teams in multiple markets (we invest in several regions and are dynamic in our approach as markets change and we change).".
Thanks!

[Sheryl Sitman]

Quote from @Fe F.:

@Sheryl Sitman hey there! can you tell me a little bit more about what you meant by "We are now offering down to earth guidance for jumping the learning curve and setting investors up with our established teams in multiple markets (we invest in several regions and are dynamic in our approach as markets change and we change).".
Thanks!

 Many newer investors either take an expensive course to get started or jump in without much understanding and make costly mistakes or bad decisions. The courses can be good but the info is general, takes time to learn and apply, may be one size fits all approach and can not adapt to the quick changes in the market. And jumping in blind or with little understanding can be disastrous of course. So we are filling that gap for people who want to get started now and develop a strategy and make decisions that align with their unique circumstances. My approach 14 years ago looks nothing like my current investments today - we evolved, life circumstances changed and market conditions and opportunities of today are totally different. Basically we help people avoid becoming overwhelmed or falling for the hype so they can make smart decisions. And we offer working with the vetted teams we created over the years as well.  Hope that helps! Feel free to reach out :-)

[Fe F.]

Quote from @Sheryl Sitman:

Quote from @Fe F.:

@Sheryl Sitman hey there! can you tell me a little bit more about what you meant by "We are now offering down to earth guidance for jumping the learning curve and setting investors up with our established teams in multiple markets (we invest in several regions and are dynamic in our approach as markets change and we change).".
Thanks!

 Many newer investors either take an expensive course to get started or jump in without much understanding and make costly mistakes or bad decisions. The courses can be good but the info is general, takes time to learn and apply, may be one size fits all approach and can not adapt to the quick changes in the market. And jumping in blind or with little understanding can be disastrous of course. So we are filling that gap for people who want to get started now and develop a strategy and make decisions that align with their unique circumstances. My approach 14 years ago looks nothing like my current investments today - we evolved, life circumstances changed and market conditions and opportunities of today are totally different. Basically we help people avoid becoming overwhelmed or falling for the hype so they can make smart decisions. And we offer working with the vetted teams we created over the years as well.  Hope that helps! Feel free to reach out :-)

 Thank you, very interesting! I might have found your website but doesn't list the markets you're in, is it only PA? Let me know! Thanks

[Sheryl Sitman]

Quote from @Fe F.:

We are in the Philly metro area, Lehigh Valley, SW Fl and SC as well and maintain a network of trusted partners in multiple markets. We can assist investors to figure out where they should invest based on their resources and goals and to make solid decisions about how to get invested. Website will be updated soon :-)