New to Real Estate Property Investment

[James Smith]

Hello BP Community,

I am currently New to the real estate investment world and have been doing research the last few months. I currently reside in Southern California and do not plan on investing in SoCal due to funds and the current overall market out here. I have a little over 20k saved up and more than 100k in retirement. I am also looking at duplexes and bigger in AZ, NV, and smaller communities north of Los Angeles.

With just over 20k saved up and that more than likely not being enough, would you guys recommend pulling from my 401k to cover the remaining costs? Also, being a first time buyer for real estate property, what do you think about being a long distance landlord? Thank you in advance.

James

[Jason D. Lewis]

@James Smith

Hey James, welcome aboard. 

Being a long distance land lord is all about setting up systems, creating a network and having good people available to you.  It can also depend on the property type you buy.  buying a single family that's in good shape, may not require as much attention as a fourplex in a run down area.  So knowing what you will personally be getting into should help answer your questions.  When you first travel to your potential buy area, you should set up meetings with people to establish some sort of network.  also post on craigslist or whatever you use that you need property managers, or handy men and meet with them on your visit.  see if they are a fit for you.  having them handy and being able to have them pop in to solve a problem is amazing.  a simple e transfer gets them paid and being that it is a second job for them, their fee should be fairly cheap.

If you have about 20k in cash on your own, i would look to secure another investor or solicit friends and family.  create a power point with what you're looking to do and let them know that you could split the deal with you doing all the work, but them sharing the benefits with a 50% investment.  This is exactly how i managed my first true buy and it worked out great.  I was actually able to find a lender (family) who simply wanted to be repaid at 5%.  the deal i found provided amazing cash flow and I was able to have them paid back in less than one year.  My power point was amateur, but if you pm me i can send it to you.

Knowing your numbers and having a strong understanding of real estate, taxes and fees will help build your credibility.

All the best,