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Updated over 3 years ago, 08/25/2021
Brand New to Real Estate Investing
Hello everyone!
I’m brand new to the real estate investing world and I’m excited to be here. As I prepare to retire from the military within the next five years, I’m looking to find something that will ensure a smooth transition. I’m still deciding what’s my lane (what specific niche I want to pursue) due to my unpredictable moves. Right now, I'm looking into “out of state investing” or “syndications” any advice or guidance will be greatly appreciated.
Thank you!
@Nellie Black Hi Nellie! Thank you for your service! From all that I read on the forums Kansas City and the larger cities in Ohio provide affordable markets for OOS investors to buy a nice beginning portfolio that cash flows well.
Anywhere you choose to invest start building your team. Use the BiggerPockets directory to find investor friendly realtors and go from there. Decide what you're looking for a SFH or a small multi family. The income from multi family leases counts toward your income needed to qualify for the mortgage.
B-to C buildings typically cash flow the best. A good realtor will be able to help you choose property in a decent neighborhood. They can refer you to a good property manager. Interview the property manager. Make sure you feel comfortable with them. If you don’t find another. Ask for referrals on the forums.
Best of luck and hopefully more people answer.
Yes the midwest seems to be where everyone is going. Those that are investing out of state that is. I appreciate your service, I am helping a Veteran right now acquire property from AZ. I work with a lot of Investors and most of them are out of state. Yes make sure you have a good team on the ground because you will need that. Once you narrow down an area or city, then start reaching out and making connections to start building that team. Read a little and educate your self on some of the terms and investment strategies and then "GO" My favorite strategy and the most that I help my investors with is the BRRRR method. In my opinion it is the quickest way to scale. You buy and and pull the cash out so then you can repeat and recycle the cash so to speak. I wish you the best with your investing. You can reach out to me anytime with any questions as I am in KC and love what I do. "Helping"
Hey @Nellie Black, welcome to Bigger Pockets and to the amazing and addicting world of real estate. I think real estate investing is a great side hustle for military folks like us, because you can do it passively and there is potential to build some serious wealth long-term.
I think the best way for military members to get started in real estate is to purchase a 2-4 unit property using the VA loan and rent out the other units to pay for your mortgage. This is called "house-hacking" and its a fantastic strategy.
The second best way is to save up and purchase turnkey single family homes. Some people will disagree and say turnkey operators can't be trusted, and its not the best used of capital, etc., but I think its a fantastic way to get started in real estate because you don't have to do nearly as much work as if you were doing your own BRRRR or flip, but you're still getting the benefit of the cash flow and owning 100% of a property.
Best of luck and feel free to reach out directly if you have more questions!
Nellie -
Thank you for your service! As you transition, I would consider the Midwest. There are still good finds there that will produce a good income stream for you. I would take a look at KC. There is strong industry there, as well as stability. I am sure you have heard you need to build your team. If I can help with finding a KC broker that works with OOS investors, please let me know. For property management, I would ask that you PM me and I can tell you a bit more about that and how Atlas can assist. Best of luck to you!
Melinda
Originally posted by @Alecia Loveless:
@Nellie Black Hi Nellie! Thank you for your service! From all that I read on the forums Kansas City and the larger cities in Ohio provide affordable markets for OOS investors to buy a nice beginning portfolio that cash flows well.
Anywhere you choose to invest start building your team. Use the BiggerPockets directory to find investor friendly realtors and go from there. Decide what you're looking for a SFH or a small multi family. The income from multi family leases counts toward your income needed to qualify for the mortgage.
B-to C buildings typically cash flow the best. A good realtor will be able to help you choose property in a decent neighborhood. They can refer you to a good property manager. Interview the property manager. Make sure you feel comfortable with them. If you don’t find another. Ask for referrals on the forums.
Best of luck and hopefully more people answer.
Hi Alecia!
Thank you so much for the insight. I will definitely look at all of those things you mentioned. Thank you again!
Originally posted by @Marc Edwards:
Yes the midwest seems to be where everyone is going. Those that are investing out of state that is. I appreciate your service, I am helping a Veteran right now acquire property from AZ. I work with a lot of Investors and most of them are out of state. Yes make sure you have a good team on the ground because you will need that. Once you narrow down an area or city, then start reaching out and making connections to start building that team. Read a little and educate your self on some of the terms and investment strategies and then "GO" My favorite strategy and the most that I help my investors with is the BRRRR method. In my opinion it is the quickest way to scale. You buy and and pull the cash out so then you can repeat and recycle the cash so to speak. I wish you the best with your investing. You can reach out to me anytime with any questions as I am in KC and love what I do. "Helping"
Thank you so much for that breakdown. It sounds like my first assignment is figuring out where I want to invest? From there I can work on finding the right team to get the process going. Again thank you, and yes I will definitely be in touch when I have more questions. =)
Originally posted by @Doug Spence:
Hey @Nellie Black, welcome to Bigger Pockets and to the amazing and addicting world of real estate. I think real estate investing is a great side hustle for military folks like us, because you can do it passively and there is potential to build some serious wealth long-term.
I think the best way for military members to get started in real estate is to purchase a 2-4 unit property using the VA loan and rent out the other units to pay for your mortgage. This is called "house-hacking" and its a fantastic strategy.
The second best way is to save up and purchase turnkey single family homes. Some people will disagree and say turnkey operators can't be trusted, and its not the best used of capital, etc., but I think its a fantastic way to get started in real estate because you don't have to do nearly as much work as if you were doing your own BRRRR or flip, but you're still getting the benefit of the cash flow and owning 100% of a property.
Best of luck and feel free to reach out directly if you have more questions!
Lol you are right on the "amazing and addicting world of real-estate." Yea my goal is to build wealth over the long term.
I've heard of "house-hacking" but right now it doesn't make sense for me because I'm due to PCS (I'm still not sure when and where, but I've been at my current assignment over 4 yrs).
I've heard of turnkey, but haven't researched it enough to make an informed decision. I will make it a point to look at some more information on it to see if it makes sense for me.
Thank you so much for taking the time to provide me some guidance and insight. I will definitely reach out when I have more questions.
Originally posted by @Melinda McDonald:
Nellie -
Thank you for your service! As you transition, I would consider the Midwest. There are still good finds there that will produce a good income stream for you. I would take a look at KC. There is strong industry there, as well as stability. I am sure you have heard you need to build your team. If I can help with finding a KC broker that works with OOS investors, please let me know. For property management, I would ask that you PM me and I can tell you a bit more about that and how Atlas can assist. Best of luck to you!
Melinda
Thank you for your support! Yes I've been hearing a lot about the Midwest in the forums and videos. I am currently in the process of narrowing down my scope so that I can hone in on a specific area. I will definitely look into KC. Is there a specific area/areas you suggest I look at? Once I look at what they have to offer/if I see something of interest, I would love to reconnect. Again, thank you for reaching out and providing guidance and insight.
@Nellie Black
Thanks for your service! Glad to see another fellow newbie investors:)
@Nellie Black
I have invested in MF in KC metro starting this year. Buying cash definitely put you at an advantage in this market and saves you thousands on closing costs. A lot of properties on MLS are not cash flowing or/and are in need of large cap ex which ruin your cash flow. Any descent MF will have a bidding war and gets scooped up in a week or days over asking price . But overall beats investing in CA.
Originally posted by @Navid A.:
@Nellie Black
I have invested in MF in KC metro starting this year. Buying cash definitely put you at an advantage in this market and saves you thousands on closing costs. A lot of properties on MLS are not cash flowing or/and are in need of large cap ex which ruin your cash flow. Any descent MF will have a bidding war and gets scooped up in a week or days over asking price . But overall beats investing in CA.
Hey Navid!thank you for reaching out. What would you say is the typical amount of cash one should have? Also, what do you mean it saves you thousands on closing cost???
Originally posted by @Jiang Hu:
@Nellie Black
Thanks for your service! Glad to see another fellow newbie investors:)
Hi Jiang! Thank you for your support. Yes it is nice to see a newbie. Imagine what a year from now will look like because we decided to take action 🤗. I wish you the best on your journey.
@Nellie Black
A typical duplex in a C area would be 180-220K. Although I have seen a package of 3 duplexes at 150 k each which got scooped up 5 hrs after listing, SFH in the same neighborhood 200-120k. When you buy cash, the closing costs would be much less as there is no loan. Example 1000k vs 15k for the ave duplex. These numbers are just estimates. Plus with cash offer you maybe able to purchase at asking price whereas with loan you prob have to over bid by 5-10 k. So if you have the cash you buy it, then you can refinance in 6 month or do delayed financing (less than 6 month) meaning you just get a loan on the property (normally 70-75% of appraised price) and take back the cash to buy more.
Originally posted by @Navid A.:
@Nellie Black
A typical duplex in a C area would be 180-220K. Although I have seen a package of 3 duplexes at 150 k each which got scooped up 5 hrs after listing, SFH in the same neighborhood 200-120k. When you buy cash, the closing costs would be much less as there is no loan. Example 1000k vs 15k for the ave duplex. These numbers are just estimates. Plus with cash offer you maybe able to purchase at asking price whereas with loan you prob have to over bid by 5-10 k. So if you have the cash you buy it, then you can refinance in 6 month or do delayed financing (less than 6 month) meaning you just get a loan on the property (normally 70-75% of appraised price) and take back the cash to buy more.
Hi Navid!
Thank you for the insight, that makes a lot more sense. How is your KC investment going? I'm currently in the process of narrowing down where I want to purchase and KC is one place I'm considering.
@Nellie Black
For me at this point is too early to say how it’s going as I purchase my investments just a few month ago. I will find out in a couple of years. I have been told KC had a good CF and appreciation. But KC is also saturated with lots of investors, so finding a deal is hard. You don’t want to but anything. You want to make sure you buy a “deal”. You may have to wait a few months to find that deal..What I can tell you is before you buy make sure you put inspection and appraisal contingencies and if your agent didn’t tell you to do them fire them on the spot. You also want a RE Attorny to review your offers and closing disclosures and it would not cost much.
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I like to give out the punch list below to new investors. Follow this and it's going to go a long way in protecting your money in any turnkey market.
- Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
- Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
- Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
- Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
- Make sure your property manager is a licensed real estate brokerage.
- Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
- Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.
@Nellie Black
Hi Nellie!
Welcome!! Thank you for your service! I would highly recommend looking into using your VA loan and owner occupying something. Great way to get started with no money down! Being able to utilize your VA is such an advantage and I have seen a ton of success with that locally! I do understand that you could be stationed somewhere else soon but the demand of rent in southern california are so high and always going up!