Feel lost, how/where should I buy my First rental property?

[Samy I.]

I am a 25 year old Male from Silicon Valley, California and have saved up $80,000 in cash, over many years, and am ready to buy my first rental property. Ideally, I would like to buy a turnkey rental property within the next 1-2 months.

I have a religious prohibition against taking on any loans/interest/dealing with banks (I can't use leverage) etc. so I am limited to the 80k in cash that I have.

How and where, would the experts on here, recommend I invest my 80k?

Ideally, I was thinking to buy a Single-Family 3 Bedroom 1 Bath Home (Turnkey), in one of the following areas:

-Cleveland Ohio

-Memphis Tennessee

-Indianapolis Indiana

-Cincinnati Ohio

-Kansas City/St Louis

etc.

Would you guys recommend any USA market in particular, based on my $80,000 budget?

I am looking to buy and hold over many years, and am looking for cash-flow, and am not concerned about appreciation.

My ideal place would be an area that has low vacancy rates, good tenants, and with property management in place, to generate a passive-income without having to think about it.

My goal is to buy a cash flow rental property every 1-2 years, so this will be my plan moving forward. I am concerned only with stable low vacancy cash-flow, and don't mind having no appreciation.

However, since this is my first property, and I've worked so hard for this cash, I am naturally really afraid to move forward and pull the trigger, due to my lack of experience. (i.e. I don't know much about real estate other than hiring a property inspector to inspect the house, and then paying for it lol)

Should I split my 80k into (2) and buy a couple of 40k properties, and then rehab both when I get more money?

Or should I put my 80k into a turn key property that pays $800-$1,000 in rent from day 1? (<<This is what I'm leaning towards) but expert advice would be appreciated.

TLDR: 

-Which US markets should I invest in with 80k, as a cash only buyer, looking to buy turnkey? 

-Should I split my 80k into (2) 40k purchases, and just rehab the homes when I get more cash?

Thank you.

[James Wise]

Originally posted by @Samy I.:

I am a 25 year old Male from Silicon Valley, California and have saved up $80,000 in cash, over many years, and am ready to buy my first rental property. Ideally, I would like to buy a turnkey rental property within the next 1-2 months.

I have a religious prohibition against taking on any loans/interest/dealing with banks (I can't use leverage) etc. so I am limited to the 80k in cash that I have.

How and where, would the experts on here, recommend I invest my 80k?

Ideally, I was thinking to buy a Single-Family 3 Bedroom 1 Bath Home (Turnkey), in one of the following areas:

-Cleveland Ohio

-Memphis Tennessee

-Indianapolis Indiana

-Cincinnati Ohio

-Kansas City/St Louis

etc.

Would you guys recommend any USA market in particular, based on my $80,000 budget?

I am looking to buy and hold over many years, and am looking for cash-flow, and am not concerned about appreciation.

My ideal place would be an area that has low vacancy rates, good tenants, and with property management in place, to generate a passive-income without having to think about it.

My goal is to buy a cash flow rental property every 1-2 years, so this will be my plan moving forward. I am concerned only with stable low vacancy cash-flow, and don't mind having no appreciation.

However, since this is my first property, and I've worked so hard for this cash, I am naturally really afraid to move forward and pull the trigger, due to my lack of experience. (i.e. I don't know much about real estate other than hiring a property inspector to inspect the house, and then paying for it lol)

Should I split my 80k into (2) and buy a couple of 40k properties, and then rehab both when I get more money?

Or should I put my 80k into a turn key property that pays $800-$1,000 in rent from day 1? (<<This is what I'm leaning towards) but expert advice would be appreciated.

TLDR: 

-Which US markets should I invest in with 80k, as a cash only buyer, looking to buy turnkey? 

-Should I split my 80k into (2) 40k purchases, and just rehab the homes when I get more cash?

Thank you.

 Welcome to the site Samy. Your $80k should go very far in any of the MidWestern markets you mentioned. I operate about 1,000 or so rentals in Cleveland. For some more information on the Cleveland market give The Ultimate Guide to Grading Cleveland Neighborhoods a read. Cleveland, just like any of the other markets has a lot of cool neighborhoods along with extreme blight. Important for you to know what's what, as it's all going to look incredibly cheap compared to Silicon Valley. Don't get fooled by those "out of state eyes."

Another point i'd like to make is you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
• Make sure your property manager is a licensed real estate brokerage.
• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.