Should I start looking at properties or wait?

Question

Hello BP community!

I am a newbie who is interested in starting my real estate investment portfolio. A little about myself, I am 22 years old, just moved to the Dallas Texas area and just started a new job. I currently live in an apartment but would like to get into a multi family property when my lease ends. It does not end until December, but my thought was to begin looking early that way I could get a property, fix it up, and move in a tenant before I move in. Should I consider waiting closer to the end of the year or start looking now? Also who would you recommend that I speak with first in regards to this whole process? I spoke with banker to see what I may get pre approved for, but at the moment I am waiting for a response.

Caleb Heimsoth · Answer

@Tyler Lay. I was living in Dallas when I started over 2 years ago.

Things to be aware of:  1.  Property taxes are very high.  2.  Insurance costs are high as well.  3.  Foundation issues happen a lot due to the soil in Texas

I personally chose too invest elsewhere when I was living there but it’s a great market economically

Joe Villeneuve · Answer

Do you know where you can invest?  Notice I didn't say want to invest...I said "CAN".

Do you know where the properties are that you can afford?

Do you know how to invest?

Do you know how to find the right Market to invest in?

Do you know how to analyze?

These are just some of the things you need to know before you start to invest.

Nick Flint · Answer

Welcome Tyler!

Looking never hurts, even 3 years ago when I was renting and still finishing school I would occasionally check out Zillow or Craigslist. Looking will give you a feel for the area. See what the pricing looks like, which areas see more action, what amenities seem to sell properties the quickest, and what the rents look like in the area you're looking at. First I'd see what kind of options there are for breaking your lease or subleasing your apartment. If you found a duplex or multi that is a good price you could move in, start fixing up one unit, when that one is done rent it out, move into the other and get to work fixing that one as well. I'd recommend talking with a realtor as well as a contractor, check out some articles on BP about the "core four" and that'll give you a good idea of the team you'll need.

Good luck!

Kevin Dean · Answer

Hey @Tyler Lay I would absolutely get started!

The opportunity cost of not looking, not investing and not learning far outweigh what it would cost you to either get out of your lease early, or acquire a cash flowing asset that may have to sit with a unit vacant until you get out of your lease.

Zach Midwood · Answer

@Tyler Lay

Don’t wait to invest in real estate; invest in real estate and wait.

Bart H. · Answer

I always recommend folks look at house hacking to start.

IMO the best way to start is to buy a duplex/tri/quad and live in one unit and rent out the other units/bedrooms, and live nearly free.

More broadly, I think its possible to find deals in every market.  Just determine your investing criteria, pick a neighborhood and get to know it.  drive it, walk it, look at every property that comes for sale.  Figure out if a property is under or over priced.  Then when a deal comes along, you know what it looks like and you buy.

In a market that has run up a bunch, your numbers might not make sense.  A few years ago, everything was a smoking deal.  But let the numbers tell you if its a good deal.

So in short, I believe you can find deals in every market, but I wouldn't sit it out because you think the market is overpriced.

Lucia Rushton · Answer

@Tyler Lay Boy I wish I could turn back the clock and start at 22 - well done you!! If you'd like some help with the research or doing some comps, just give me a shout.

Josue Vargas · Answer

I wouldn't wait a minute to start looking.  You don't need an agent to start becoming familiar with the market, but I would speak first with a Realtor agent familiar with REI.  Get your finances in order, and looks like you have a good start speaking with lenders.  Pre-approve means how much you can afford and that will give you an idea of the properties you can buy, but it has not gone throughout the process of an underwriter review (this is often done after you put offer and accepted, but it can be done before you find the ideal property - no address needed).

Keep in mind most multi-family with room for quick appreciation (flips) are often quickly gone from cash buyers and the good deals barely make the open market.

Austin Jay Toniolo · Answer

Tyler, I agree with Joe with asking yourself those power questions, as they will help you dial in your approach to accomplishing your goal. Nothing worse than hesitating and wasting time and energy because you didn't take the time to plan right from the start. I was one of those guys... Also, like @Dominic Flint was saying, looking for your target properties will get you into the analyzing deals habit.

Thanks for sharing and enjoy the journey!

Should I start looking at properties or wait?

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