Seeking Input on My First Real Estate Investment Strategy for Passive Income

[Noah Fele]

Hello BiggerPockets community,

I'm thrilled to join this forum and seek advice from experienced real estate investors. Here's what I've considered so far:

1. Markets:

Local Market: I live in the DMV area (DC/MD/VA) which primarily experiences appreciation, making it challenging to find cash flow properties.

Out-of-State Priorities:

       - Price Below National Average: I'm prioritizing markets where property prices are below the national average.

       - Positive Population Growth: Markets with growing populations tend to have increased demand for housing.

       - Low Unemployment Rate: A stable job market is crucial for tenant stability.

       - Rent-to-Price Ratio: I'm looking for areas where rental income justifies the property price.

2. Potential Markets:

 I'm currently researching the following markets:

       - Huntsville, AL: Low unemployment rate and steady growth driven by large aerospace and defense industry.

       - Columbia/Greenwood, SC: Affordable properties and potential for cash flow.

       - Cheyenne, WY: Small market with stable economy.

       - Syracuse, NY: Decent A education and growing tech industry.

      - Open to other markets that I should be researching       

3. Property Types:

I'm considering mainly 3bd/2ba in the following property types:

       - Single-Family Homes

       - Townhouses

       - Small Multi-Family (1-4 Units)

4. Starting Small:

   - I've been interested in real estate for years but lacked the courage to take the plunge.

   - My strategy is to begin with an easy deal, even if the numbers aren't optimal.

   - Goal: Gain confidence, understand the process, and get my feet under me before scaling up.

5. Financing and Budget:

   - I’m thinking of starting with no more $50k out of pocket for all upfront costs including the down payment to keep with my “start small” strategy.

   - Considering a conventional loan with 20-25% down 

   - I'm open to exploring other investor-friendly financing options that allow for a lower out-of-pocket down payment but I’m not familiar with what’s available to me 

6. Property Management:

   - Given my W2 job and the out-of-state nature of the investment, I'll have to work with a property manager.

7. Networking and Education:

   - As a beginner, I started to reach out to real estate agents here hoping to find a good match and hoping to expand my network from there

   - Connecting with experienced investors will provide valuable insights.

8. Timeline:

   - I’m thinking 2-6 months will give me ample time for learning and evaluating deals but open to other suggestions 

I appreciate your warm welcome and look forward to learning from your insights. Thank you for being part of this supportive community!