Newbie investor interested in sub 30k markets

[Jeff Parkin]

Greetings All! My name is Jeff, and I’m a newbie soon to be investor. I just found BiggerPockets recently and am overwhelmed (in a good way) at the plethora of information I’ve come across so far! I’m extremely excited to be here and wanted to take a minute to introduce myself to the community. A little about me… I’m 42, single, college graduate, former retail store owner, long time renter in South Orange County, Ca. and actually do enjoy long walks on the beach. (Haha, this feels like a dating profile!) I would love to be able to buy property here, but finances and prices just won’t allow for it at this time.

From what I’ve gathered thus far, the sub 30k market looks to be the best place for me, and since those properties don’t exist in California, I’ll be looking to invest out of state in places like Baltimore, Atlanta, Detroit, etc. The question I’ll pose to anyone who’d like to weigh in… what do you think is the best way to get started with my current situation (lack of credit, limited capital (28k), income as a contractor, living in CA)?

I’m obviously still in the learning phase so I welcome your suggestions & comments and look forward to being an active member of the BiggerPockets community! Woohoo, I’m excited! ~ Cheers

[Rhett Tullis]

Sub 30k properties owned out of state and well managed are clearly profitable.  If they are poorly managed (as with any price class) they will of course lose money.  You are all right in that the amount of rent collected per unit is less than in 100k plus properties but if you are looking at cash on cash return or reaching the 2% rule the best way to do it is sub 30k properties.  I meet with folks weekly that are leveraged in 100k plus properties and only clear $100 per month per unit and folks that own 30k properties and clear $300 plus per month.  If done correctly you can/will turn a better profit in sub 30k properties (unless you are investing for appreciation then you need to look at another model/plan or maybe consider some powerball tickets :O) )