New to real estate investing, looking to learn

[Jon D.]

Hello BP forums!

First post here and I am completely new to real estate investing.

I live in Connecticut and I have settled on wanting my first investment to be in Connecticut. This is currently the only thing I am actually decisive about.

I think I'm struggling with analysis paralysis combined with generally being overwhelmed by all of the different metrics and data to look at.

Specifically, I'm currently trying to narrow my market within Connecticut, but I am getting stuck on how to determine a "good" market. My goals are cash flow primarily. I keep hearing that it makes sense to focus on markets that have strong economic and population growth, but there's really no overlap between population growth, economic growth, low prices, and low taxes.

So my question really is, what's the best way to get out of this? Is Connecticut just a bad market? Am I being too much of a perfectionist? How does one go about determining what a "good" market is to start out?

Thanks for any help on this.

[Nicholas L.]

@Jon D.

can you start with a house hack?  that is the best way to start.  not everyone's family situation or lifestyle permits, but if you can, you should.

now - on to cash flow.  to summarize: there is no cash flow anywhere right now on a vanilla long term rental.  Not in Connecticut, not in Cleveland, not in California.  true cash flow is only going to come either (1) after many years of ownership, when the property is stable and rents have gone up; or (2) with a completely different, probably tougher strategy or niche.

think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes. then when it's finally rented, in that first month your rent is $14 more than your expenses.  is that cash flow?  what about all the costs it took to buy and put into service?

i say this not to discourage you from investing, but to help set your expectations properly.  the benefits of long term rentals are... all of them together.  the leverage of buying with debt, the mortgage paydown, the potential for appreciation, the potential tax benefits.

a good market is one you can be successful in.  so if you're in Connecticut, invest in Connecticut.  i own a property in Stamford, and I hope to start investing there more in 2025 or 2026.  i like northern fairfield county.