Out of State Newbie Investor from North Carolina

[Jess Archives]

Hi all. I've been following Bigger Pockets for three years now. This community has been helpful to get insights on how real estate works. Because of which, I feel comfortable enough to soon purchase my first investment property. But first, I thought I'd say "Hi" with this post to share/critique my process.

A little about me: 

I'm in the tech field, so Real Estate apart from second hand Bigger Pockets experience, is a foreign domain to me. As such, most of my investments have gone into a traditional 401K account. Until earlier this year - I became increasingly convinced real estate methods like BRRRR would outpace any indexed portfolio I have.

I know my first deal isn't going to dramatically affect my lifestyle. And because I'm investing out of state (from NC living overseas), momentum is going to be more important than finding the perfect BRRRR. Turnkey looks like the best option.

For Turnkey solutions, I'm seeing options for Cleveland, Indianapolis, and Kansas City MO at around 10-15% CoC with $20-30,000 total cash initial costs. Note for this investment I'm not looking into forcing appreciation, or refinancing as it wouldn't make sense here. Feel free to provide any thoughts!

Looking forward to further discussions!

 

[Scott Passman]

@Jess Archives Make sure you vet your operator real well and go visit the market as well as the property before committing to anything.  Know your numbers and run them all yourself as any pro forma you look at will be worthless 99% of the time.  Make sure you check accurate rental rates for the area and property types you are looking at, budget out appropriately, and don't make the assumption that because it's "turnkey" that you can budget minimally for capex and repairs.  The "turnkey" property I just bought 9 months ago has already had about $1500 of work done and I'm getting bids for about 10k more work right now.  Be picky and don't dismiss things that come to your attention because you will either plan for it upfront or you will pay for it down the road.  You can make out of state work, but it is trickier so you need to make sure you perform very thorough due diligence on the company, the market, and especially the company.