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Updated 16 days ago, 12/02/2024

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New Investor looking to break into the foreclosure market

Posted

Hello BiggerPockets Community,

My name is Sebastian Tamburro, and I’m a Canadian currently studying at Colgate University. Alongside my studies, I’ve had the privilege of competing as a Division 1 hockey player, which has taught me the value of discipline and strategy—qualities I’m excited to bring into my real estate journey.

I’m looking to purchase my first investment property in the U.S. with a budget of $250,000 to $350,000 in cash. My goal is to find a cash-flow-positive rental property that I can manage while finishing my degree, setting the foundation for a real estate portfolio I plan to grow steadily over time. Specifically, I’m drawn to distressed properties, such as pre-foreclosures and foreclosures, because of their potential for strong returns and lower acquisition costs which I feel is a great combination for a new investor with my budget.

That said, entering the U.S. market as a Canadian comes with its own set of challenges, and I want to make sure I’m approaching this the right way. I’ve done some research and have identified a few markets with potential, but I’m still trying to figure out the do’s and don’ts of buying distressed properties and how to maximize my chances of success.

For example, what market factors should I be looking at beyond the average sale price? I’m trying to assess which neighborhoods might have the best rental demand and growth potential, but I’m not sure I’m covering all the bases when It comes to pre-foreclosures and foreclosures.

I’ve also been wondering how essential it is to work with a real estate agent or wholesaler when identifying opportunistic distressed properties. Should I be prioritizing finding a local expert, or are there tools and strategies I can use to handle this process myself? What is the best way/approach to go about this step in the process? 

One tool I already have is PropStream, which I know can be incredibly powerful. I would love tips on how to use this service effectively to identify the best properties that meet my criteria. If anyone has experience with this, I’d really appreciate your insights!

In addition, I am hoping to understand the most severe risks that come with investing in distressed properties, and how best to mitigate these risks. 

As a Canadian investing in the U.S., are there specific financial or tax considerations I need to be aware of when investing in US properties (or distressed properties in particular)? 

When it comes to property management, I’m hoping to take a passive approach and outsource most of the work, given that I am a university student. What are the best practices for quickly securing reliable tenants and ensuring positive cash flow, especially for someone new to this?

Ultimately, my goal is to scale my portfolio and purchase a second property within 1-2 years after graduating. For those of you who have been in my position, what strategies helped you scale quickly while minimizing risks?

I’m also eager to dive deeper into learning about this space. If there are any books, podcasts, or other resources that you’ve found invaluable, I’d love to hear your recommendations.

And finally, if you could go back to when you were buying your first property, what’s the one piece of advice you wish someone had given you?

I’m drawn to markets across the U.S. as long as they align with my goals of strong rental demand, relatively low hands-on management, and potential for long-term growth. If you have any market suggestions or general advice, I’m all ears!

Thank you for taking the time to read my post. I’m excited to learn from all of you and take my first steps into the world of real estate investing.

Best regards,

Sebastian Tamburro

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