Newbie Investor - Long Distance Rental Investing

[Justin Lentz]

Hello BiggerPockets!

My name is Justin, I am new to real estate investing and I am excited to contribute to the BP community. I am based in San Francisco and I am originally from Tampa, FL. Given the expensive nature of the Bay Area, I am joining the BP community to strengthen my real estate network with the intent of branching into markets out of state. If anyone has recommendations on markets to research for single family rental property investing, specifically with homes under $250k that can be cash flow positive, I would appreciate it. Looking forward to connecting with like minded individuals!

[Arlen Chou]

@Justin Lentz just be very careful with your research at this particular time, all the recent historical data is about to go obsolete. The rules of the game are changing extremely fast because of COVID-19. A cash flow property does not cash flow if people cannot work because they are locked down. Those people won't be able to get new jobs if the service businesses they worked at closed for good. Most people work in the service industry and there have been 10 million new unemployment claims in the last 2 weeks of reporting. There will be millions more reported tomorrow. Do your research on the fundamentals of the area, not jobs but the actual industries that are located there. High appreciation areas will get hit hard along with cash flow areas. There are already 6 figure discounts popping up in the SF Bay Area. People who were already in the market and prepared in 2019 are going to come out way stronger. But people who got in recently or were over-leveraged will get eaten alive by the guys who piled up cash last year. Remember the playing field just made a major shift, in my opinion, month-old real estate data is no longer relevant. Focus your research on the underlying strength of the local economy and its ability to fight back out of this crisis. I would highly discount any advice from anybody who did not go through 2008. Even that advice will need to be tempered as this current situation is an order of magnitude worse.