Looking for the Max Bang for My Buck with my Inheritance

[Heather Lawler]

I was a real estate agent for about 3 years until I was offered a job that I couldn't resist working from 8:30-2pm everyday with two little boys at home and very well paid so I let my REL expire.  I am now about to inebriate some money (low six figures) and want to invest in real estate.  I live in central Iowa by my parents live outside of Bastrop Texas and have started investing in rental properties around them. 

Long story short I am trying to decide if I want to invest in Iowa or Texas.  The rental property and even the fix and flip market seems a lot better in Texas.  I am only 32 yrs old and want to keep growing and building my portfolio.  I love the idea of rental properties but I also am excited about the idea of Fix and Flip. 

Do you start out buying rental properties or Fix and Flip properties? I want to keep my ROI between 20 & 25% and get the max bang for my buck starting out so I can grow.

 Any suggestion or help would be greatly appreciated.  I know LOCATION LOCATION LOCATION but everything else involved and me being 1000 miles away would it work?

[Jay Hinrichs]

Originally posted by @Ryan Blake:

@Heather Lawler I agree with @Cody L.. I would check your local rental market. When investing remotely you are taking on a little extra risk but you are also paying extra in fees for someone to do the extra small things that you would be able to do if you were local, i.e. walk through a property and analyze the area, review construction to make sure it is being done and to your standards. Specifically in Texas, you will also be paying more in taxes. In Texas we have no state income tax. Our state makes up for that deficit by charging the 4th highest property tax on average in the US. This isn't a big deal if you also live in a state without income tax but I don't think that is true of Iowa. So you will also be paying your state income tax after you have paid the high property tax. I would look at the rental properties around you first and then if you find it is not a good market, consider out of state (OOS) investing.

YUP  unless your doing big TEXAS MF type deals... of a commercial nature like Cody above.. I cant see being from a state you have to pay income tax in.. ( especially Californians ) then buying onezee twozee rentals in TExas and be subject to the uber high property tax and CA income tax which is also one of the highest in the country.. so you take on max tax's at both ends of the investment spectrum..  I have talked to many a CA who figures this out when they get their new and improved tax assessment and just figured out they have no real cash flow or very little.  BUT if you can get value add or area you think is going to appreciate well and there is a real chance of retail exit that could mitigate it some..  But if your in flat to semi flat appreciation markets which could describe most of the US as the prices seemed to have topped in most areas.. then you really need to look at your fixed expenses and see where it all falls out.