Hello! Just Starting Out with Capital

[Christopher Eckerdt]

Hello Everyone!

I just started this summer and I love the idea of real estate. I immediately got a team together, a target market, and took out a HELOC on my house ($100,000) in order to hit the ground running. However, I've hit a snag, and I'm not sure where to go. I live in CO so investing in the Denver metro area is a no-go due to how expensive everything is here. I have many questions for seasoned vets such as, how do I even break in to this industry? I'm still looking for my first investment property, and even though my credit is very good, the deals have been tough to come by. Any help or advice is greatly appreciated!

[James Wise]

Originally posted by @Christopher Eckerdt:

Hello Everyone!

I just started this summer and I love the idea of real estate. I immediately got a team together, a target market, and took out a HELOC on my house ($100,000) in order to hit the ground running. However, I've hit a snag, and I'm not sure where to go. I live in CO so investing in the Denver metro area is a no-go due to how expensive everything is here. I have many questions for seasoned vets such as, how do I even break in to this industry? I'm still looking for my first investment property, and even though my credit is very good, the deals have been tough to come by. Any help or advice is greatly appreciated!

 Welcome to the site Christopher. Many investors looking to get into rentals who live in expensive markets like yours look at out of state investing through turnkey companies or real estate brokerages. Tons of turnkey markets out there. Many are well represented by sellers & turnkey operators here on BiggerPockets (myself included) The most popular markets are

• Cleveland
• Toledo
• Memphis
• Birmingham
• KC
• Indy
• Detroit

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. 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.