Trying to start out in a competitive area

[Aya Inoue]

Hi everyone!

I am interested in getting started in investing in a pretty competitive real estate market area. I've been told that it's extremely difficult to buy a decent single family home right now, especially since I don't have a ton of cash. Does anyone have thoughts/advice on what to do? I was thinking it might not be a total waste to buy a house at close to list price and rent it and hang on to it for a while. Understanding that we may make very little in terms of profit from the rent. Maybe there is value in managing a rental for the first time? Maybe it will appreciate over time? Or maybe be more aggressive in looking for deals? 

Any thoughts would be appreciated, thank you in advance!

[Darius Ogloza]

Are you thinking of buying in Ann Arbor itself?  If so, given that this is an incredibly desirable place to live with continued growth/development prospects, I would not pay too much attention to day 1 "cash flow" (as would be an important factor in, say, Monroe MI or some dying industrial place like that).  I would look at my investment decision from the perspective of total return - cash, mortgage paydown + appreciation.  Mortgage rates for conventional financing have never been lower.