How do you decide where to invest

Question

I am a totally newcomer investor to this field. I have been going through bigger pockets for almost 5 days.

i definitely want to invest, but sometimes have second thoughts as to where and how much to invest. There are properties that are so cheap and need little work but rent good. so these can be cash flow properties.

But what if i need to sell these properties? would they attract buyers if they are less than market price.  There is a reason i am asking this.... Its because i have seen a couple of desperate sellers on this forum, and i dont want to end like them.

So is it better to invest in upscale neighbourhoods where you are definitely going to find a buyer provided your prices are attractive.  Or should you gamble with cheap properties in the low 20k - 30k and risk not finding buyers.

Would appreciate all inputs before taking the so called leap

Rich Weese · Answer

Welcome aboard! I personally, don't deal in EITHER price range you mentioned.

I don't like the low range because no loans are available for potential buyers and I don't buy crap.

I don't like the high range "upper scale neighborhoods" either. There are fewer buyers and the rents you'll receive are not commensurate with the price of the home, imo.

What does that leave? The middle price range. I LOVE buying in the median price range. These are also considered "bread and butter" type homes. Here are some reasons why I like these.
1. Most buyers are in this area
2. Lenders like loaning on these.
3. Renting gives you a 2nd strategy.
4. Rents will give a decent return.

Again, I like median price homes, but they can't be median price homes in OVER-INFLATED areas, or you still lose, imo. Good luck. Rich

Jay Norlund · Answer

Don't for get the age old adage that buying the worst house in the best neighborhood is better than buying the best house in the worst neighborhood. I would stay in the middle ground mostly, but don't pass up a good deal in the better neighborhoods as well. If nothing else that is a buy and holder.

Jon Holdman · Answer

If you're serious about investing in the US, you're going to have to visit your chosen location, get to know the area, and meet some people.  There are possibilities in most places, so if you have friends or relatives here and they're willing to help, you might consider their locations.

Personally, I invest in the Denver area simply because I can deal with my properties directly.  I've considered other areas, but, at least for now, I'm not even willing to go to Kansas City.  Frankly, I can't imagine trying to deal with a rental property from the other side of the planet.

Mubarak Thakur · Answer

@Rich Weese
thank you for your advice i will try to stick to it. hope you will help me as we go forward

@Terri Pour-Rastegar
yes from mumbai, and my name yes, it does mean congratulations. also definitely thanks for the advice

Terri Pour-Rastegar · Answer

Rich hit the nail on the head with this one.  Although investors do buy-sell-rent properties across all price points and in all kinds of neighborhoods, especially as a newbie, you should stay away from either market extreme--stick with the houses that attract first- or second-home buyers.  These homes will also give you multiple exit strategies, if you buy them right; the two easiest being:  either sell it or rent it out.  No matter what you buy, always have at least 2 exit plans to save your butt.

I will add this:  drive through the neighborhoods you're considering investing in.  Would you live there?  Well, maybe not, but only because you could afford a nicer home, maybe.  But think:  would you let your single-mother girlfriend or your sister live there?  If your answer is no, I generally say keep looking.  The exception to this is if this is an up-and-coming neighborhood.  An experienced realtor who knows this neighborhood well will be able to help you in that (but do your own homework too--never rely solely on what a realtor or seller tells you).  You can also look up this information on your county's website (generally)--call your local clerk of records to find out where this information is.  This is how it works in the US anyway--I am not sure about Mumbai.

Those were my 2 cents.  Hope it helps.  Let us know how it goes!!!

BTW, when I first saw your name, I thought maybe you were Persian (until I saw you're from Mumbai).  My in-laws are Persian, and "Mubarak" means "congratulations" or "it's time to celebrate."  So you have a very celebratory name!  Is it the same meaning in your heritage?

How do you decide where to invest

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