New to Bigger Pockets and Real Estate Investing

[Chris Marsh]

I'm excited to have joined such an amazing community of like minded investors. I'm just starting out in real estate investing, but I do own my current residence in CA.

I have a real estate agent and a property manager in Indianapolis helping me search for deals and they seem like great guys from as far as I can tell. I'm also looking to connect with some folks on the ground in Alabama. I don't plan on buying something unless the agent and property manager agree on the purchase.

I'm looking to build a nice portfolio of SFH's and do my best to pay them off as quickly as possible. Maybe conventional loans on five homes with a goal of paying off two of them in seven years. I realize this might eat up capital for additional investments and slow growth, but it has more to do with how much debt I'm willing to live with.

Some things I'm struggling with:

1) It's tempting to pull the trigger on a turnkey home where the numbers are just below the 1% mark and the neighborhood is decent. At the same time, I keep reminding myself that I probably need to add value or equity to really do it right (easier said then done being out of state). I might just go for the 'move in ready' on the first purchase to minimize risk.

2) All I can think about is "will the property rent after I purchase?". I care more about that then a lawsuit, eviction or economic downturn. If I can find a good tenant for my first purchase, it will somehow justify all the insane hours I put into learning about real estate investing. 

3) I review suggested properties on the MLS that are in good neighborhoods and then check on zillow to see how many rentals are in the surrounding area. I'll find anywhere from 4 to 5 properties that have been vacant for rent over 60 days. Some are priced too high, but it definitely gets in your head when determining a neighborhood to purchase in. And sure enough, the house I was just looking at accepts an offer just days after being listed.

Any advice or words of wisdom would be greatly appreciated. All the best!

[James Wise]

Originally posted by @Chris Marsh:

I'm excited to have joined such an amazing community of like minded investors. I'm just starting out in real estate investing, but I do own my current residence in CA.

I have a real estate agent and a property manager in Indianapolis helping me search for deals and they seem like great guys from as far as I can tell. I'm also looking to connect with some folks on the ground in Alabama. I don't plan on buying something unless the agent and property manager agree on the purchase.

I'm looking to build a nice portfolio of SFH's and do my best to pay them off as quickly as possible. Maybe conventional loans on five homes with a goal of paying off two of them in seven years. I realize this might eat up capital for additional investments and slow growth, but it has more to do with how much debt I'm willing to live with.

Some things I'm struggling with:

1) It's tempting to pull the trigger on a turnkey home where the numbers are just below the 1% mark and the neighborhood is decent. At the same time, I keep reminding myself that I probably need to add value or equity to really do it right (easier said then done being out of state). I might just go for the 'move in ready' on the first purchase to minimize risk.

2) All I can think about is "will the property rent after I purchase?". I care more about that then a lawsuit, eviction or economic downturn. If I can find a good tenant for my first purchase, it will somehow justify all the insane hours I put into learning about real estate investing. 

3) I review suggested properties on the MLS that are in good neighborhoods and then check on zillow to see how many rentals are in the surrounding area. I'll find anywhere from 4 to 5 properties that have been vacant for rent over 60 days. Some are priced too high, but it definitely gets in your head when determining a neighborhood to purchase in. And sure enough, the house I was just looking at accepts an offer just days after being listed.

Any advice or words of wisdom would be greatly appreciated. All the best!

 Welcome to the site Chris.

It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

• 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.
• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.