Rookie Investor: Syndicate, House Hack, and Long-Distance Rental in one year?

Question

I've been learning a lot about real estate investing and am eager to take the plunge. I currently rent, do not own primary residence. I want to learn as much as I can in my first year of investing so I am thinking to try a few different things:

Syndicate: I have some capital that is in stocks that I could put in a syndicate. Get more real estate exposure (none in my overall portfolio). Get better at analyzing deals and learn from professionals to see what they look for in their PPMs/deal analysis. Any syndicate recommendations?

House Hack: once my lease is up in a few months, plan to buy 1-4 unit and live in it and rent out the rest. Get some hands on experience with land-lording. Plan to self manage, but hire out all repairs (e.g., handyman, contractors). Do not want to fall into the pitfall of working "in the business" not "on the business". Eventually move out once it can cash flow (and hire a PM), maybe after a couple years.

Long Distance Rental: look for markets with good cash flow. The minimum bar is that my first deal just won't lose me money. If I can just be break even (with reserves) and have a tenant paying off the mortgage that is good enough. Will of course try for better but may be difficult being long distance & a new investor.

My thinking is to do all of the above within the next year. Since I haven't done any actual real estate investing before, learning is the most important part. I am doing all of these will fast-track my experience as an investor.

Anything you think I should watch out for? How is this plan for a rookie investor? Any syndicate recommendations? Or general advice?

Evan Polaski · Answer

@Tom T., like many others:

House hacking would be my first choice.  It gets you an asset, helps covers the cost, etc.  Of course, there are downsides, like having roommates (not a position I want to be in for my stage of life).  You may learn that ownership is not for you.  But, there is a good chance, it could reduce your monthly cash outflow (of course depending on current rent and what property you buy).  Hopefully, you find an asset that appreciates.  And, as you note, you start to get an idea of what things typically cost to repair/replace, which is an integral part of being successful in most real estate strategies.

Syndication is great when you are making (in my opinion) $300k+ per year, are maxing out your 401ks and IRA each year, and still have $50k+ per year to invest.  So like Nicholas said, it is more of a diversification play, or an opportunity cost play.  The latter meaning, you are making more money in your active career, and you need some more investment vehicles to put money into, but even if it all goes bust, your lifestyle and other savings plans are not affected.

Long Distance Rental: Personally, I am not a fan of this because it inserts many, many more risks into the equation.  As Becca noted, most of the "team" you will need is incentivized by selling you on their market.  But, beyond that, if you own a few houses in a distant market.  You put $50k down on each (so $150k invested) , and you are "cash flowing" about 10% per year.  You are making $15k per year.  But, at least for me, I would want to be in the market at least twice per year to check on things.  That trip, between flight, a night in a hotel, a rental car, a few meals out, will be another $2k per trip.  So in reality you are making about $11k/yr, once you have 3 properties, assuming each is truly generating 10% after all reserves.  The moral being, if you can afford to house hack in your local market, I, for one, don't see the reason to take on all the risks of OOS rentals.

Becca F. · Answer

I agree with househacking as #1.

#2 Long distance investing - do a lot of research on prospective locations, visit  multiple times, talk to local investors (someone unbiased not trying to sell you anything). Things look much different in person than in photos and MLS/Zillow listings and video.

As far as cash flow on a long term rental at 7% interest rates, there is none. If you can do rent by the room, mid-term rental or Short Term Rentals (AirBnb), your cash flow numbers may improve. Or some type of value add but again doing construction/renovation from far away could be risky for first time investor. I've talked to lots of California investors who have lost money buying cheap out of state properties (myself included).

#3 Syndications - you need to be an accredited investor and know how to vet who's a good or bad operator.

https://www.sec.gov/resources-small-businesses/capital-raisi...

I talked to 3 syndications. Ex: one whose project was to build apartment complexes in land constrained Southern California. It sounded good but I passed. I wasn't ok with losing $100k or having a a syndication do a capital call (ask investors for more money). As a limited partner (LP) you have little control. I'd rather own my own property. If I want to do passive investing I'd put $100k into index funds, at least I could liquidate it quickly if I change my mind.

Chris Seveney · Answer

If I did anything I would house hack. Syndications you probably are not gonna learn much, you could join groups to look at how to underwrite a syndication but you are not going to learn how to be active in real estate. That also begs the question - if you want to be passive them yes syndication/fund model is the recommnedation but if you want to be active that is not the way to go.

Nicholas L. · Answer

@Tom T.

hello

definitely house hack

syndications are a diversification strategy for HNWIs

not a starting strategy

good luck

Alex Olson · Answer

Yes Kansas City is a great market to invest in for buy and hold and some form of long BRRR. I have some good data on the market here if you want to DM me I am happy to share.

Kristina Kuba · Answer

@Tom T.

You’ve got a solid game plan, and I like that you’re prioritizing learning over trying to hit home runs right away. A few thoughts:

Syndicate:

Great way to get your feet wet with real estate while staying passive. Just make sure you fully understand the terms—some syndicates have long hold periods, fees that eat into returns, and profit splits that aren’t always investor-friendly. Look for operators with a strong track record, and definitely read the PPM carefully. BiggerPockets has good discussions on syndicates, and you might want to check out Ashcroft Capital, Origin Investments, or even Fundrise if you want something more hands-off (though it’s not a true syndicate).

House Hacking (Big Fan of This One!)

This is one of the best ways to start because you get hands-on experience while keeping your living costs low. Some key things to think about:

• -Financing – FHA loans (3.5% down) and conventional loans (5% down) are your best bets. If you're going the duplex/triplex/quad route, FHA is a killer option since you can get in with low money down while still owner-occupying.
• -Tenant Selection – This is HUGE. A bad tenant can make your life miserable, especially if you’re living in the same building. Screen well, and don’t cut corners just because you “vibe” with someone.
• -Managing Repairs – Smart move planning to hire out repairs. Just make sure you have a solid handyman or contractor on speed dial so you’re not scrambling every time something breaks.
• -PadSplit Option – If you're comfortable with a little more hands-on management, you could consider setting up a PadSplit instead of just doing traditional rentals. Basically, it’s a co-living model where you rent out individual rooms, which can massively boost your cash flow. Works best in markets with strong rental demand, and it’s good for keeping vacancy rates low.

Also, just make sure the numbers work for when you eventually move out—some house hacks only make sense when you’re living in them, but don’t actually cash flow once you move.

Long-Distance Rental

Love that you’re okay with just breaking even at first—too many newbies get caught up in trying to make insane cash flow right away and get discouraged. Just a few things to watch out for:

• -Property Management is Everything – A bad PM can ruin your investment. Interview a few, get references, and don’t be afraid to switch if they suck.
• -Market Selection – Stick to landlord-friendly states with strong job growth and population trends. Florida, Texas, and the Midwest (Indy, KC, etc.) are solid choices.
• -Unexpected Costs – Since you’re not local, budget extra for maintenance and vacancy. --Long-distance investing means you won’t be able to just stop by and fix something yourself, so you’ll be paying a premium for labor.

Overall, your plan is solid. My only concern is doing all of this in year one—house hacking and a long-distance rental at the same time can be a lot. Maybe start with the house hack, get your systems in place, and then expand from there.

Wale Lawal · Answer

@Tom T.

It’s great that you’re approaching real estate with a diverse and hands-on strategy—house hacking, long-distance rentals, and syndications can all provide valuable learning experiences. House hacking is a solid first move since it allows you to learn property management firsthand while keeping living costs low. Long-distance investing requires strong market research and a reliable local team, so focus on landlord-friendly areas with solid cash flow. Syndications can help you passively invest and gain exposure to larger deals, but vet operators carefully before committing. Your plan is ambitious but achievable—just be mindful of spreading yourself too thin as a new investor.

Good luck!

Denise Supplee · Answer

It is important to weight it all out. For instance, househacking a tri or quad is a great way to build equity, gain experience and reduce your personal living costs. But there are some issues that can arise such as a problematic tenant (it is different when they are living next to you). Seek out possible mentors and/or partners who have experience. Consider investing in syndications through a coinvesting club. I have co-founded one and love investing that way. Much less aggravation and I can spread my money over many different vehicles, such as apartment communities, trailer parks, vacation communities, land flipping and so much more. Good luck and much success to you!

Rookie Investor: Syndicate, House Hack, and Long-Distance Rental in one year?

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