Where should I start investment?

Question

Hi everyone,

I just joined BP and this is my first post. I am in my early 40s (I know it is a bit late) and having a 9-5 job (sometimes 7-6). My wife and I have bought/sold our primary residency a few times, but still own only one property. We did realize how profitable the real estate can be along the way. However, as living in Bay Area, CA now, I don't think we can afford to buy another property nearby. Some friends suggested Reno, NV and Seattle, WA, but we are not sure how to start.

Can anyone suggest or guide us where/how we can start our investment?

Thanks a lot!

Will Fraser · Answer

Hi @Samuel Tzeng!  Welcome to the BP community!

You're going to hear a lot of people tell you about markets like Oklahoma City, Tulsa, Wichita, and Little Rock, AR as a result of this question I would think.  You've already had people recommend Reno and Seattle.  Here's where I am beginning to see the wisdom in recommending:  pick a person to invest with before a market to invest in.

For instance: you aren't the only one in the Bay Area that is investing outside of the Bay Area, so perhaps you'll look around and find a trustworthy person who is already operating successfully out of state and see if you can partner with them on a deal to learn how it works.  Then you can scale that partnership, or take what you've learned and go out on your own.

The trouble with starting with the location first is that there are SOOOO many sharks in the water in every market.  In fact, with regards to real estate agents, insurance brokers, contractors, and lenders I would venture to guess that 1/2 of all people in these trades are sharks.  Your odds, as a local OR a nonlocal in most markets, is that you will end up using a scrub or a shark -- someone who is incompetent (at best) or malicious (at worst).

By starting with "who", you can "borrow" the trust circles that they have fought hard to win, and then grow from there.

Good luck in the journey!

Charles Carillo · Answer

@Samuel Tzeng

It is not too late! If you are already planning on going out of state, why not focus on very landlord friendly states? I know NV is more friendly than CA but this would be a big factor for me. Second thing to look for is a diverse, growing job market. This will help to ensure that you are able to rent your apartments in every phase of the market cycle.

John Morgan · Answer

@Samuel Tzeng

Welcome to the real estate investing community. I started 5 years ago at the age of 43. I’m in the DFW area in Texas and have picked up 7 SFRs since I started. I’m more of a buy and hold kind of investor looking for base hits. If you’re patient and ok with only make $200/month property you’ll be fine. I’m only cash flowing 3k/month now, but it’s better than nothing when I started 5 years ago. Many on here are looking for home runs with flips. If you’re needing some info or advice on the DFW area, I would be happy to help you. It’s competitive out here due to great appreciation. The rental demand is insane and Texas is a business friendly state so many companies big and small are relocating from over taxed and regulated states..like California. I’m actually from the Bay Area too. I would either buy a turn key property to get your feet wet or buy a super cheap beat up property and hire a contractor to remodel it for you. Then manage it from CA. It’s not that hard to do.

Jason Boritz · Answer

@Samuel Tzeng

The more you plan and are clear on your goals, your numbers, what you want and what you are looking for and study data and Economics, the more successful you will be.

Lena M. · Answer

Hi @Samuel Tzeng  It's never too late!  With age comes wisdom.  Read this article and it will give you a different perspective. https://www.biggerpockets.com/blog/real-estate-investing-too-late-age

Alexander Yates · Answer

@Samuel Tzeng you’ve already gotten some good responses so far. I won’t mimic what’s been said but will add that you should think about what level of involvement you’d like to have. Can be anything from buy and hold to hard money lending to ...whatever you decide you’d like to pursue.

I’m currently in Reno and have been investing locally here. A lot of investors from the Bay Area have been looking here as well. Feel free to connect and message me to discuss this market further.

Austin Largusa · Answer

Hey @Samuel Tzeng I'm also newer and from the Bay. You'll find a great wealth of knowledge and support here. I've done tons of research and finally found a house that we feel good about putting an offer in on. And yes, it's out of state.

Brent Paul · Answer

You are never too old to get started.  Investors start for the first time at all ages.  One thing you might want to sit down and think about is where you want to be and what kind of cash flow or money you are hoping to make.  Will you be flipping houses, Long term rentals, Short term, etc.  Many many choices.  Make yourself some goals and you would be surprised how far that can really push you to meet those goals.  I sat down and made myself a simple spreadsheet in excel.  Then I made 3 different columns with equations on cash flow from 250, 300, and 400.  From there I went from 1 house to 15.  Through that process I found I need 10 houses cash flowing 400 per month for me to replace the income from my full time job.    Then I started playing around with the numbers and I figured out 4 SFH properties paid off would be more than sufficient to reach my goals.  So there are different ways you can do things.

Junior Soares · Answer

@Samuel Tzeng

Hi Samuel,

I was  born and raised here in the Bay Area and am an active out of state investor in a few markets with great success Thusfar. Will be in the Bay until end of 2020. PM me if you'd be interested in a conversation about it over coffee sometime

Best,

Junior

Michael Slockers · Answer

@Samuel Tzeng welcome!

My suggestion would be to state your goals. What are you after? Where would you like to be in ten years?

Where should I start investment?

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