New NYC'ers for Midwest Investments

[Arun S.]

Introduction

My wife and I live in NYC – but we’re Midwesterners at heart. My wife is from Milwaukee and I’m from Columbus but over the past 10 years, we’ve lived in Chicago, Washington DC, Atlanta, and Miami, so we have a good perspective on different parts of the US.

I have 8+ years experience in commercial real estate – lending/purchasing/selling commercial real estate for both Fortune 50 companies and private funds. I have nationwide experience with retail, office, multifamily, industrial, and hotel properties. I also have an undergraduate and graduate degrees in Real Estate and am a CFA Charterholder.

Long-term Goals

My wife and I want to build a portfolio of SFH and multi-family real estate to supplement our jobs and build a nice income stream for retirement.

We are interested in owning quality properties because our time horizon is more than 20+ years. Additionally, I understand commercial lending and am interested in doing some private lending as well to supplement a portfolio of homes.

We have family in both Milwaukee and Columbus and want to explore Bigger Pockets for some additional resources to build out our networks and start investing in both cities. We have capital ready to invest with today

Questions

1.)If we have a long-term horizon, does it make sense to take less cash returns now for fundamentally good areas, with very good schools, stable neighborhoods, etc?

2.)Because we’re dipping our toes in the water, we would entertain partnerships or a joint ventures with experienced operators needing capital. I think that our expertise could be of interest to some operators. I’m curious the best way to meet these people?

3.)What is the best way to interview potential property management firms? I haven’t seen a checklist of questions, is there a resource on BP that I’ve missed?

4.)Who has deals for us to evaluate in these markets?

We’re also open to evaluating deals, making relationships, and networking and we look forward to buying our first property.

[Dawn Anastasi]

@Arun S. welcome to Bigger Pockets from another Milwaukee native!

There are pros and cons to investing out of state. A lot has been said on the topic if you search the forums.

Some pros:

- Returns in one's own backyard for rentals might not be as good as what you can get out of state. So you might make more money this way.

- It's very hands-off, so if you want passive income that's one way to make it without doing the dirty work of dealing with the day to day of rentals themselves.

Cons:

- Investing out of state is not for everyone. Some people won't sleep at night if they can't actually drive to their property every so often.

- You must absolutely have a contact or team in place to help you if you choose to go this route. Also keep in mind that there can be some additional costs involved such as property management, etc.

- You indicated you have family in both areas, however how much does your family want to get involved with your real estate business? Do you feel you can mix business and family together like that?

Regarding your questions:

1) You may get more stable renters and less hassle with high-end rentals, yes. But many times less cash flow. Nothing is absolute. You can have a 20-year renter in a lower-income area, and a meth house in a higher-income area.

2) Network, network, network. Bigger Pockets is kind of like a national REIA meeting that is 24/7. You can meet people from all over the country, who are doing different types of investing, and who have different points of view. Look at the profiles of people you're interested in; people usually write in their bios and what they have experience in as well as what their goals are. By reading enough, you may find other like-minded individuals or people who will be compatible to what you are looking for. (It's kind of like a Match.com for real estate investors -- did you see the video of Josh and Brandon running through a grassy field holding hands?)

3) Try talking to landlords who use the property management company. If you talk to the PM themselves, of course they will talk themselves up.

4) The Bigger Pockets Marketplace has people pitching their deals on it every day.