Advice for RE investment needed

[Daniel Bryant]

For a lack of better title, sigh, as you can probably tell Im new to this.

Ive been browsing the BP forums for awhile so this is my first post here, please be gentle lol

Heres my situation; I reside in Queens/NY where I currently rent. 

I buy and sell collectibles online (comic books, cards, coins etc). I have quite the inventory and resources to continue with this hobby/profession as Ive been doing it for almost a decade now.

At this point I find it pointless to continue renting in NY and Im seeking to relocate to an area where I can buy a property, live there, and continue with my work. I can operate from anywhere in the country as long as I have an internet line and am nearby to a post office.

I would very much like to get into the RE market and therefore I will probably seek a multifamily property to start, live in one unit and rent the other(s). I have a little over 100k in cash, great credit, I was already pre-approved for a mortgage loan from my bank earlier this year, but because of my lack of knowledge in RE I was hesitant to sign any contracts. 

Im looking primarily in either GA (Augusta, Atlanta) or Dayton OH. Mainly bcs of budget reasons.

I would love to hear your advice on what should I do with my budget. Should I go all cash on a house and then get a delayed mortgage? Should I get a mortgage instead of cash deal and then look for more units to buy? 

As you can imagine, Im somewhat nervous because this would be a big step for me.

Thank you for reading and god bless

[Joel Owens]

Save your cash. Interest rates are low. Especially for residential lock in low financing with less down and leave more cash for reserves and more property.

Tilman Ferttita a billionaire mentioned in a video that one of the best pieces of advice he ever received was to take favorable long term financing while the markets are good and capital is flowing freely so when a downturn happens you have lots of cash built up to take advantage of the cycle.

When a downturn happens the credit markets tighten up and LTV loan amounts go lower as lenders get more conservative.

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We are probably about 3 to 4 years from a recession most likely. They happen every so many years with cycles. Here is an interesting article I read the other day.

https://global.pimco.com/en-gbl/insights/economic-...

If I had to choose between Ohio and Georgia that is a no brainer. I have lived in GA all of my life but look at properties across the country for commercial. In cold belt states like OH you have more isolated pockets of growth and then lots of dead areas or declining areas where people are migrating away.

The baby boomers and retirees are leaving cold belt states in droves. About 75% of all net migration from cold belt states is moving to 3 states ( Georgia, Texas, Florida ).

I am sure there are some great deals in Ohio just for growth purposes the warm belt states have a ton of economic drivers pushing them for decades. In GA for example even though Fulton county is the seat of Atlanta there are over 20 plus counties in the MSA area. Most of the counties are having great growth. Augusta is much further out.

Do NOT be drawn in by cheap prices whether that is Ohio or in (GA) Augusta. If it easy to find and look at online the odds of it being in a good area and price is small. Look for crime stats around the property you are looking at buying. That can be very telling with what is going on with an area.

There are good areas in both states.  The key is to get a below market value in a good location. That tends to drive rent growth over time and equity growth for prices. Equity growth tends to outpace rent per door cash flow in good areas over time. More stable areas the tenants tend to advance in their jobs and can tend to afford higher rents. Depressed areas the tenants live more hand to mouth and have more social and economic issues. That leads to less available rent growth due to low incomes ( unless a section 8 tenant ) where the government might pay more for rent for an area then a tenant is able to.

Good luck. No legal advice given.