How far away should I look?

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How far away should I look?

Chris Duzan
Columbia, SC · Member since 2013 · 79 posts · 4 votes

I am currently living and going to school in Columbia, SC. I am looking for a single-family home or a duplex with positive cashflow for my first property. Something I can buy and hold. Once I get the hang of it I will start looking for larger deals, but I thought this would be a good place to start and not as punishing when learning from my mistakes. However, Columbia is not exactly an Atlanta, GA or Charlotte, NC and I was wondering if I should focus really hard on looking for a good property in my area or would it be worth going farther away, to say Charlotte(about 1.5 hours away), with a higher work force and most likely a higher demand for housing. I just wanted to get an idea of what everybody thought. Thanks ahead of time for all your answers.

Chris

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  • John Rubino
    Lender · Burke, VA · Member since 2013 · 178 posts · 28 votes
    13y

    Chris,

    I'd go where the demand is. I live in Virginia and I am in the Maryland, Virginia, DC, Atlanta, and Carolina markets. Don't be scared to venture out. If the market is right and you know what to focus on (i.e. schools, entertainment, jobs, low crime, up and coming area) go for it. Do your homework but don't let distance scare you off.

    Good luck,
    John Rubino

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  • Aaron Mazzrillo
    Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    13y

    A seasoned investor once told me (actually he used to say it all the time) why look across town when you haven't looked across the street! I am sure there are deals in Columbia. Maybe it will take you a little longer to find what you are looking for, but I'd rather have an investment locally than in another state. I am currently in 5 states and relish the day I can get rid of 4 of those.

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  • Richard W.Pro Member
    Lender · Los Angeles · Member since 2013 · 63 posts · 33 votes
    13y

    John Rubino what kind of property management fees do you deem reasonable for the charlotte area?

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  • James Vermillion
    Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
    13y

    Have you considered purchasing a duplex to occupy one side and rent the other as an initial investment? That can be a great way to get into real estate investing and you would likely be able to get some good loan terms as an owner occupant.

    In general though I agree with Aaron, as I think the first couple investments are much easier to manage (and you will learn more) if you are close to the properties.

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  • Chris Duzan
    OP
    Columbia, SC · Member since 2013 · 79 posts · 4 votes
    13y

    Thanks for all your replies,

    John Rubino: Considering this is my first property, do you think it would be more beneficial for me right now if I managed it myself? I thought this might help me understand what to look for in a good property manager when I do begin to expand.

    Aaron Mazzrillo: Thanks, I'm planning on looking in the Columbia area, at least for my first property. Do you not like using property managers at your other properties or what do you not like about being so spread out?

    James Vermillion: This sounds like a good idea considering the fact I'm going to be needing a place to live after graduating next year. Are their benefits or disadvantages to doing this?

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  • John Rubino
    Lender · Burke, VA · Member since 2013 · 178 posts · 28 votes
    13y

    @Richard White: I'm not a SME in the Charlotte market, but I'd think$100-$200 a month is a reasonable PM fee.

    @Chris Duzan: If you are within a reasonable distance of the property I'd recommend managing it yourself.

    I had a new construction investment house within 10 minutes from my primary residence a few years back and I was over there every day. Not only to see how things were going and to talk with the builder....but because it was also a lot of fun seeing the house progress towards its finish.

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  • Aaron Mazzrillo
    Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    13y
    Originally posted by Chris Duzan:

    Aaron Mazzrillo: Thanks, I'm planning on looking in the Columbia area, at least for my first property. Do you not like using property managers at your other properties or what do you not like about being so spread out?

    Even the best property managers have issues. I'm on my 4th at one property and lately he's been heading down hill. He used to be my #1 guy.

    I'm still using the same company out in Austin. I think they do a top notch job, but every once in a while I get a bill for repairs that makes me fire off an email.

    I don't mind being in 5 states. I would just prefer to keep my cards closer to home. I have different asset classes in different states so there is a reason I am so spread out. As I get a little bit older, I day dream about a simpler life, that's all.

    I like James Vermillion's idea of buying a duplex and living in one side. When I first started out, I was looking at 4 unit apartment bldgs in Huntington Beach. I could have picked one up in the mid $500Ks, but at the time I was a little gun shy about taking on that much debt for my first property. A few years later the boom hit and there wasn't a 4 unit in that city selling for under $1M. Live and learn.

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  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    13y

    I think it depends on what your goals are. If you want to learn landlording, buy near by and manage it yourself. If you just want the cash flow, use a manager and buy in the best market. I could care less about knowing how to landlord, so I always use property managers and never buy locally (CA returns are horrible).

    I recommend turnkeys if you buy outside your area, and especially as a beginner investor! Tons available in Charlotte and Atlanta.

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  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    13y

    Chris

    Stay where you are going to school.

    One call to the college off-campus housing office will tell you where students like to live whats included and what they pay.

    Line up a property in the area with as many bedrooms as possible, rent to fellow students per bed instead of per unit. You provide cable internet and utilities they pay one check for living you collect 2-4 times the rental income. You live for free and make some cash.

    BTW you don't have to own it to control it.

    Paul

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  • Mike H.
    Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
    13y

    It also depends on where you see yourself living long term.
    If you're going to school in columbia now but plan on moving to atlanta or charlotte after you finish, then I'd say go ahead and buy there now.

    You're a college kid. You can handle the drive. And you can probably still manage it yourself if you can find a decent handyman there.

    But its so much easier to buy near where you live. You can always sell it later on after you move and use the equity to buy in the area you move to.

    However, if you're saying you can't find much there and you can find deals in charlotte or atlanta, then I'd recommend buying there. The reverse is always true. You can buy in atlanta and then sell those later on and use the equity capture towards houses where you end up at.

    The key is getting in now while the prices are still somewhat reasonable and starting to build your experience.

    But an hour and a half for showings is going to hurt. But keep in mind, once its rented, you shouldn't have to go back there any time again for at least a year......

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  • Marco Santarelli
    Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
    13y

    Hi Chris Duzan,

    Welcome to BiggerPockets!

    Congratulations on starting at such a young age. I bought my first property when I was 18 and did very well. The only regret I have today is selling my first property.

    If you're a buy-and-hold investor, I suggest you "Live where you want. Invest where it makes sense." I also don't recommend managing your own properties regardless of where it's located. A good management company will do a better job than you will and over the long term will be very valuable to you.

    There are many good markets around the U.S. today, so don't limit yourself. You may want to download my '2013 Housing Market Forecast' to give you a good overview.

    Feel free to post any questions you have.

    Continued success!

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  • Chris Duzan
    OP
    Columbia, SC · Member since 2013 · 79 posts · 4 votes
    13y

    Thanks again for everyone's answers, they have been really helpful and I've been really thinking this through. I just have one more question.

    If I will be living in the same building I'm renting out, say a duplex or 4-plex, would it make since to still use a property manager or would I manage it myself?

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  • Jeremy Vogan
    Investor · Staunton, VA · Member since 2014 · 42 posts · 1 vote
    12y

    Many builders these days are offering new construction rentals with attractive guarantees that make it possible for investors to move into whatever markets they choose with confidence. Marco is right, it's a very plausible strategy and now is a good time to invest. Also contact local brokers for off market deals.

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  • Roger Blankenship
    Investor · Mcdonough, GA · Member since 2014 · 7 posts · 3 votes
    12y

    Buy something near the USC campus and rent to college students! 

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  • Chris Duzan
    OP
    Columbia, SC · Member since 2013 · 79 posts · 4 votes
    12y

    @Roger Blankenship 

    Have you ever rented to any college students? The thought of it sounds enticing but I feel like I'm always hearing horror stories about it too. Just wondering your thoughts on it. Seems like you would have a lot of problems with it.

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  • Roger Blankenship
    Investor · Mcdonough, GA · Member since 2014 · 7 posts · 3 votes
    12y

    No I haven't but that's because I'm more of a bottom feeder when I purchase. I buy distressed or foreclosures and there usually aren't many of those around college campuses, especially big schools. However, my daughter rented a house while she was at GA Tech and I analyzed her landlords numbers and it looked like a good thing. I also have a friend who does this exclusively - he just buys whatever he can find near an SEC campus and rents to college kids. He almost doesn't care what he pays - he says he is doing very well. 

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  • Chris Duzan
    OP
    Columbia, SC · Member since 2013 · 79 posts · 4 votes
    12y

    Maybe I should give it a chance and look some more into it. I live right off of campus and after being here for 4 years I kind of know what a lot of kids are looking for. Thanks!

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