Best advice for someone who wants to invest in RE and needs to build retirement and get cash flow

[Juliette V.]

I'm starting my RE portfolio, and I'm very excited but I'm also overwhelmed. 

I currently have a 250,000 loan which I am going to invest in Nashville-this summer.  Very soon.  I'm moving to Nashville this fall, and I'm so torn on how to work this magic and try to think as a investor. 

I will need to live in one of the of the places I buy, maybe rent a room for extra income.  

So, this is why I'm torn---emotional versus investment, old vs more expensive and new etc.

$250,000 - I have options there.  In SoCal, I don't. 

You can buy homes and decent condos for $125,000.  You can even buy older homes that may need some work for $60,000 in areas that demand about $750-$850 in rent--and they are located near downtown which is going through major transition from low income -- up.  Or you can buy a brand new home 2 minutes from downtown in a transitional neighborhood (but that uses my whole lump sum) or buy a beautiful home in the country 15 minutes from the city with $250,000.. 

Right outside of downtown Nashville--in an area of transition--there's a new baseball stadium going in.  That seems to me that it will attract great crowds, music, concerts...and I feel like the growth will continue to grow and get nice in that area with that kind of numbers flowing through there.  It just makes sense to me, but I could be wrong...

Here's the info...

https://www.youtube.com/watch?v=Ln4xitRfzKA

I'm overwhelmed by "options"  and I also feel like maybe I should just buy one property--because it seems crazy but also smart to buy more if I can=now.  But, considering I only own 1 condo---I feel I shouldn't get too ahead of myself. 

Can someone help after sorting through my rambling and if you had the same scenario - what would you do?  Also, near downtown or suburbia?

Thank you for listening and reading!

[Jared DeValk]

@Suwratul Abdullah you're right, but I would rather belittle someone for giving useless, cookie cutter advice when real estate is a hyper-local industry. She asked for Nashville advice not some strategy that you can hear on CNBC or read in the WSJ. I apologize for the  harsh words, but we are talking about this woman's life here. I want to make sure that she does take action, but she can still take the loan for $250,000 and keep it in a higher interest bearing account until she is ready to pull the trigger, but telling someone to just buy a house is not a good idea.

[Charles Morgan]

I did not see anywhere that the OP stated she would be losing money renting out her Condo in CA.  I did see that she stated she had been looking at the Memphis area for 5 years? Hopefully that included looking at prices and rental rates.  

I can for sure say that purchasing my first two rental homes was the best move I ever made. I now live nearly bill free in one of my homes (thank you renters) and 3 other rentals bringing in party money monthly. In addition I have given one home to my son, paid off with just taxes to worry about.

Owning rentals has given me options I never had as a renter or primary home owner!

[Shane Wilson]

I suggest that you are too new and ill equipped to leverage that much money in a market you know nothing about where you have no clear income. 

At best maybe find an experienced investor in the area that you can be a money partner with but vet them carefully and make sure they are the real deal. You could also consider purchasing a multi-unit property to live in but make a careful decision with a lot of thought and research. 

But the idea of buying multiple houses with no experience in that market, no contacts in that market, no team in that market, finding tenants for these houses, repairing any said houses, closing multiple deals, plus moving your stuff, looking for a job, a place for you to live, etc is not realistic in my opinion. Leverage is a double edge sword. Improperly used it will slice you apart.

[Mitch Dowler]

Sounds like a time to step back and take a deep breath.  Do not feel rushed or pressured to jump into something.  Find a mentor to network with and spend some time and possibly a little money on education first.

[Charles Morgan]

Another option (too many options, lol), buy a couple of places cash. As @Shane Wilson said, starting out with too many places is daunting. If the loan is unsecured then a possible default in the future may hurt credit but if the homes are protected properly (LLC, land trust, !consult a lawyer!) then she may not lose them. !Repeat, consult a lawyer!

This is not to be considered legal advice or advice to commit fraud.  I'm sure the OP has every intention of paying off the loan.

[Arlan Potter]

Jared DeValk

Me thinks you may think too highly of yourself. I was just trying to make a joke. No big deal. Don't take it personal. I don't take it personally.

 I may not know Nashville, but the cheap house rental market is not that different there than most cities in America. If is very different then I stand corrected.

My credentials - I have done 20+ flips. Built close to 30 new homes, both spec and customs. I own 55 rentals. Both SFR's and small multis. I have a college degree, am a Certified Public Accountant. I am 55 yrs old, 3 kids, 4 grand kids. Living Large in Oklahoma.

I just think that if a person wants to get into the RE investing we should encourage them to get after it. It is not rocket science. Study, learn, then do it.

The majority of people will never take the first step.

Rocky Top, you’ll always be
home sweet home to me;
Good ol’ Rocky Top;
Rocky Top, Tennessee;
Rocky Top, Tennessee.

[Bill Coleman]

I'm not so sure you are going to be able to buy move-in ready houses for $50k. That means you have rehab and that eats up cash fast. That's what I am experiencing right now.

[Jared DeValk]

@Bill Coleman, there are properties under $50K available in Nashville with great potential for appreciation. I am in negotiations with a seller to buy 12 properties, some currently rented for $650-$750, and they are wanting $35K-$45K per property. You have to be careful with those because some of those are in "warzones", yet some of those are surrounded by new builds selling for $150K-$200K.

@Arlan Potter, your advice was to buy property, not learn the market, not learn from a local investor/realtor, not rent first, you said buy a house. You are older, more fiscally experienced, have more investment knowledge/experience, have a stable job and you are in a totally different area. Idiot was the wrong word and I apologize for that, but your advice was very broad and did not take into account her lack of knowledge and experience or her situation in life.

[Arlan Potter]

that's probably fair. We are all still learning. 

Thanks.