Excited to Get Started, but How...

[Samantha Lochridge]

Hi! Long winded post... 

I've been listening to the Bigger Pockets podcast off and on for several years. My husband introduced me to the podcast  and I instantly loved it. I've wanted to buy real estate as an investment/retirement plan for years, but the time has never been right for us. We are now at a point financially that we can take a little bit of a risk. I know interest rates are high, but our local real estate market is not so outrageous that we would have to spend a large amount or take a huge risk to get started.  Our local real estate market is also a bit odd, in my opinion, which is making it hard to decide where/what to buy. 

We live in the biggest city between Nashville and Memphis. We also have one of largest hospital systems in the country in our city. We are surrounded by rural counties, but 75 miles one way you're in Memphis, 120 miles the other way you're in Nashville. Lots of booming factory business on the outskirts of the county bringing a lot of jobs this direction as well. Theoretically a great place to start in real estate. The city itself does not have a ton to offer. Public school system is terrible, several attempts to revitalize our downtown area without a ton of success, and West TN is not the most progressive, but recent change in public office members to a much younger group has been slowly helping with in the entertainment sector in the city. The "North" side of town has traditionally been "the better neighborhoods," or "more affluent" area, but as the revitalization of our downtown area has been in place, there are quite a few homes downtown selling for a range of prices between 120k-450k, depending on the condition/street of the home. 

I initially wanted to invest in property outside of our local market, but after consideration, am now thinking a home in the downtown area may be the way to go. With that said, I've been trying to keep in mind the "buy the ugliest house in the nicest area" to rehab and rent or sell, but there is such a wide range of home prices in the downtown area that it scares me a little. Also, there are still plenty of areas in the downtown from which you'd definitely want to stay away, but the revitalizing has made it to where half of the street is superb while the other half you wouldn't want to walk down alone, if that makes sense?  Buying the ugliest house in the nicest part of the city would mean we would have to commit to spending well over 300k to purchase, and with the housing market the way it is right now, I'm not sure it would give us the biggest return on investment. 

I'm trying to keep in mind how much equity we would build in both the theoretical homes as well as what could be charged in rent each month, but also what we are capable of handling if the house is vacant. 

For reference, I believe the median rent for houses downtown is around $1600/month and homes in the North side of town are about $2000/month with some being as high as $3000/month. Downtown area is more eclectic, has more local options, a brewery, two colleges, a very large hospital. North side of town has your typical nice neighborhoods, your "Targets," better parks, and private schools. 

My gut tells me to stick to downtown and with time, due to our proximity to such big cities, our housing market will take off and our downtown will continue to grow. Am I on the right path with my thought process? Any advice or insight is welcomed! Are there other questions I am not asking? 

[Samantha Lochridge]

Hi Preston! Thanks for your reply. House hacking isn't an option right now. We bought our house in 2018 for an excellent price, 299k and it recently appraised for almost 5k, so we aren't ready to let go of it in any form right now, but do plan on a HELOC to get going on real estate investing.

I’ll definitely look into the website you suggested for travel nurses! Our area does allow for air b&bs, but getting into more of a mid-term rental market like the travel nurses and locum docs is more appealing to me for this area. 

Thanks again for the input!