Beginner seeking advice

[Andrew Roberts]

Hi Everyone!

I'm keen on entering into real estate, with a goal of even getting my first rental property this summer, just to get my toes in the water and we'll see how it goes from there. My biggest concern is getting something here on the East Coast or even in my local area (NYC) due to many issues like the cost of high properties or dealing with co-ops. I'm a bit of an opportunist and I feel that investing into an emerging market makes the most sense on paper; I have my sights set on either Raleigh, NC or Austin, TX or Dallas, TX. 

I just wonder if it makes sense for my first property to be someplace away from home? I read that maintenance companies will take upward of 12% of rent to oversee everything but is it a road worth taking?

Right now I have a great job that pays very well, but my contract for my position ends in 3 years, so I'm trying to take all my savings and transfer it into rentals. With that said, I'm also wondering if it makes sense to pay with cash or leverage. Part of me thinks it's smarter to start with leverage on my first properties just so I can get the lay of the land and do the hustle of looking for those discount properties, but the other part of me knows that by paying cash I can probably create a discount by offering less $$ to the seller and then I don't even have to deal with the lender at all and can take all the money. 

Thanks in advance for any opinions

[Jody Schnurrenberger]

Welcome to BP!  Funny that you're considering Raleigh as an affordable market.  Here's another newbie talking about investing out-of-state because Raleigh is too expensive.  lol  But I guess it's all relative...  https://www.biggerpockets.com/forums/55/topics/520...

As for paying a property manager, for me, it's a non-issue.  If I want to have rentals, I WILL have a PM.  I'm a terrible PM, myself.  I've tried it and failed.  Not everyone is cut out for it and I'm definitely not, so even investing locally means I have to have a PM.  Don't let a PM stop you from investing.  Just consider that when you running your numbers so you don't short change yourself.  Also, I'd read the management contract of several companies before signing with one.  They can have pretty different contracts with some things in there that you might not like.  One contract I just read said they charge for advertising, but the lawyer representing them said they don't.  They just like to keep it open as an option.  Uh, so one day I might get an unexpected advertising bill?  It could be hundreds of dollars since it doesn't specify how much.  No thanks.  Another said I had to pay $300 to leave them, even if I gave the required 60 day notice and stopped working with them at the end of my contract.  That seems pretty rude to me.  Anyway, of course, talking to the PMs is important, but so is reading the contract!