Hello from a newbie

[Keneale McKenzie]

Hi all,

I recently stumbled onto the world of real estate investing and Im interested in learning all I can. I currently live in NY and I am aware of the high prices for property here. As my goal is to have a means of earning passive income I would like to purchase and rent properties. I have been looking into the Detroit market and was astonished to see such big homes for such low prices. I almost though I was dreaming when I saw homes for 30k but realized that I wasn't dreaming after more research. Since I live so far away from Detroit I figured as a first time investor it may be beneficial to utilize a turnkey company to get started while I continue to learn the ropes, however a few of the turnkey companies I have found seem to have issues with communication and even with some of their affiliates such as property management. I really want to take the leap and so would appreciate any advice or referrals for turnkey companies working in the Detroit area.

Thanks a lot

K

[James Wise]

Originally posted by @Keneale McKenzie:

Hi all,

I recently stumbled onto the world of real estate investing and Im interested in learning all I can. I currently live in NY and I am aware of the high prices for property here. As my goal is to have a means of earning passive income I would like to purchase and rent properties. I have been looking into the Detroit market and was astonished to see such big homes for such low prices. I almost though I was dreaming when I saw homes for 30k but realized that I wasn't dreaming after more research. Since I live so far away from Detroit I figured as a first time investor it may be beneficial to utilize a turnkey company to get started while I continue to learn the ropes, however a few of the turnkey companies I have found seem to have issues with communication and even with some of their affiliates such as property management. I really want to take the leap and so would appreciate any advice or referrals for turnkey companies working in the Detroit area.

Thanks a lot

K

 Welcome to the site Keneale. There are more markets than Detroit. Many are well represented by companies here on Bigger Pockets. he most popular markets are

• Cleveland
• Toledo
• Memphis
• Birmingham
• KC
• Indy

I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly. Some firms have poor communication but more often than not what I see is a lot of new investors don't really understand the proper expectations when it comes to property management. A property management company isn't going to be calling you on a daily or weekly basis to chit chat about your portfolio. Some newbies believe that this will happen before getting into the game. Setting proper expectations as to how, when & why the property manager will contact you is key.

One thing to note when looking at the individual markets, 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.