Where to start buying

[Drew Darlington]

Hey everyone!! I have been flipping houses for almost 4 years now and it has been super successful. I am really ready to start building my rental home portfolio though. I just don't know where to start. I have about $25k I'm ready to put down for an investment or maybe for a cash deal. Where should I go to start? What kind of houses should I be looking at? Any ideas or advice would help thanks!!

[Ed Emmons]

Depends on your goals but always start local. I would suggest looking at price per unit cost. I would much rather have a 10 unit than a combination of houses that add up to 10. If you are going to manage yourself there will be more choices. If you start out managing, you will learn a lot for when it comes time to hire someone else. Low income areas can create better cash flow but are more management intensive and you have to allow for more uncollected rent in your figures. Look for properties that have potential to increase cash flow within a couple months. As an example, ones where rents are well below FMV. Or where there is a disproportionate high amount of vacancy for area. These both show lack of owner interest. You buy on current actual numbers and then fix the problem and you should do fine. Code enforcement people can be good sources of properties where owners don't care. These may not be on market and can often be great opportunities.