First Time Buyer Living in an Expensive Market

[Moaaz Malik]

Hi All,

I got interested in real estate about 2-3 months ago and have been listening to the podcast nonstop and have read about 4-5 books already.

I’m eager to get my first property but am having a little trouble finding the right deal.

I live in the Bay Area and thought that I would invest out of state because California is so expensive. But now I’m running into the issue where it just seems very difficult going through with my first property and it being OOS.

Ideally I would want to be close to the first property I invest in because I think that would make for a better first experience and I think it’s safer but the properties in the Bay Area are just too expensive.

Just as some more background I have ~90K to invest.

Does anyone have any advise on what I should do? Should I just continue to look in the Bay Area and hope I find a deal or should I just go to OOS investing.

[Joshua McMillion]

@Moaaz Malik

We moved from California last December, but before we moved, we purchased the home that we currently live in, intending to turn the house into a rental after moving. I'm active duty military and move often, but this was the first home I purchased OOS and sight unseen other than Zoom. My first recommendation is to identify the primary and secondary markets you want to invest in. Learn the area, jump on google earth, start rating the high schools, find where the hospitals are, and where the large employers are located. 

Secondly, I recommend you start building a Team. I found that the most critical Team member is the agent. If you can find an agent that is also an investor, you typically can use their Team. For example, I used my REA's GC, PM, and preferred lender on the OOS home, and my REA was willing to be the boots on the ground because I continued to add value to him. I eventually found a new GC, but his recommendations for lenders and PMs were spot on after my due diligence period. 

Third, you have to have boots on the ground if you are doing value add plays. A GC will typically have a google folder with photos to update you on progress but nothing beats physical quality control inspections. I was fortunate to be moving during the OOS home REHAB and was shocked by how behind schedule they were and some of the corners they cut. Find someone willing to be a project manager and have then manage the cost/schedule/performance. 

I hope that helped! 

Sincerely,