Getting Started and a Few Scenarios

[Tim H.]

This is my very first post here on BiggerPockets and I look forward to interacting with everyone here so thank you in advance for your time and input on my questions. Sorry if my initial post is long winded.

I currently have investments in the stock market but I'm getting killed on taxes due to income level. In addition, I have been stockpiling my cash in the bank to save for a future dream home and the kids college, etc. but I think it's time to put this money to work for me instead of just sitting there.

There seems to be a lot of experienced users here that have had success investing in real estate and flipping so hopefully you can shed some light on best possible scenarios.

Here are my initial quick and dirty thoughts. Maybe some of you can tell me which ideas would “potentially" work best.

Assuming 100K of Cash at Hand.

1. Find Something for 100K, pay cash and just rent it out. After typical landlord expenses, pocket the rest and re-invest at some point.

2. Find 2 Homes for 50K each, pay cash and rent it out.

3. Find 2 or 4 Homes, put 20 - 50 % down, finance the rest, rent it out, but deal with additional expense of the mortgage payments.

I live in Southern California which means everything here is more expensive. While I would love to find something local as I have connections with a handy man and it makes it easier to manage things, the prices of property here would require a much larger mortgage and having to carry the property without a renter would be much harder than looking out of state and getting more affordable real estate. Should I just assume out of state is where to go?

Now for one Scenario, just to see if I am even thinking on the right level.

Here is a home for 87K: http://www.zillow.com/homedetails/14211-Sylvia-Dr-Cypress-TX-77429/28302805_zpid/

It seems to be selling below the comps appears to be in decent shape. Here is a quick idea of rental prices for this neighborhood and area: http://hotpads.com/rentals/10810-White-Oak-Falls-Court-Cypress-TX-77429--22aw8mukyjpqf#limit=5&lat=29.941249847412102&lon=-95.63529968261723&zoom=23&previewId=22aw8mukyjpqf&previewType=listing&detailsOpen=true&minLat=29.930353236695446&maxLat=29.952145264627163&minLon=-95.6455564498902&maxLon=-95.6250429153443&includeVaguePricing=false&listingTypes=rental,sublet,room,corporate&propertyTypes=house,divided,condo,townhouse,medium,large,garden,&dupeGrouping=building

This area also has decent schools and is surrounded by more expensive areas.

Anyway, thanks for getting this far in my long post but I thought these scenarios might be helpful for others in a similar scenario and this home in Houston Tx would be a good role play for everyone to evaluate together.