Finding my First Deal

[Eric Sender]

Hi Everyone,

I am a San Diego CA, white-collar worker (not in the real estate industry) and have not bought any property yet. The San Diego market is so expensive, I pretty much terrifies me. This could be due to me having no experience in real estate at all.

That said, I do have a bit of savings -- I have been working professionally for 8 years. A friend of mine has gotten into buying REI multi-family rentals in Kansas City and I like the idea of doing the same. I figure, the process of getting into REI's will have me learn the ropes in working with agents, brokers, lenders, etc.

That said, I am looking for advise on what markets to start in? I know there is a marketplace forum here on bigger pockets, but I there is also Zillow and RedFin, etc.

My goals are:

• Find properties that will cost me about $20-25k each in terms of down payment and any fees
  • No rehab properties and no expectation of appreciation, just something that can be rented out
• Creation a positive $200/mo cash-flow (more the better obviously)
• Most likely out of state from California
• Managed remotely (ideally, I never need to even visit the property)
• Develop a great relationship with a lender who will help in future deals as well as my eventual home for myself/family!
• Start the momentum to eventually buy more properties
  • Then eventually get into bigger and bigger deals
  • (I did read the 7 Years eBook - 7 years sounds good to me!)
• I believe REI Rentals are the easiest ways to start out, but also the slowest
  • I think I'd eventually like to find rehabs - however as my first REI, I think flipping a rehab may be too much coordination and too much of a time crunch
  • (Let me know if you disagree)

Anyway, obviously I am a newbie, so I could have misinterpreted things and be setting myself up for trouble. Any advice would be great! 

[Mike D'Arrigo]

@Eric Sender It all depends on your goals and objectives. If cash flow is your goal, then you'll have no choice but to go outside of your local area. San Diego won't cash flow unless you can put a huge amount down and then your COC return will be practically nothing. Out of state investing doesn't have to be any more risky than investing locally as long as you spend plenty of time upfront learning the neighborhoods and finding good property management. Any of the other risks will be the same regardless of where you invest. A big mistake I see first time out of state investors make is spending more time researching the market than researching the neighborhoods and then consequently buying in bad areas. You can find good and bad areas in almost any market so once you've selected a market drill down and get to know the market at a neighborhood and street level. You can recover from nearly any mistake in real estate. You can't recover from buying in a bad area however.