Newbie from Vancouver, WA

[Gina Fernandez-Ross]

I am currently trying to learn all I can about getting into the rental property investment business. I want to start with single family and 2-4 unit properties, and then eventually purchase larger multifamily units. My end goal is to replace my income with rental cash flow.

My sticking point so far is that I have a hard time figuring out the financing part. I am a pretty linear thinker, and like to have all my ducks in a row before a new endeavor. I feel like I should have some financing options lined up before I really find a deal to invest in, because I don't want to make an offer and have to drop out. Any suggestions would be welcome. I do have a little of my own money to invest if the right deal came around, but not a whole lot.

Also, it seems like my timing might be off, with the coronavirus thing going on. I don't want to get into a property that the tenants end up not paying their rent. How is everyone dealing with that?

The market I am in is quite inflated. Purchase prices are really high, and while rental rates are high, they don't seem high enough to justify the purchase yet. This is why I am open to out of state markets. How do you go about analyzing a distant market?

Last, I was wondering if anyone invests in Turn key properties, or is it a waste of time and money?

[Dave G.]

I think you'd want your financing options identified prior to making offers. I'm a cash guy so I'll let someone else offer specific recommendations. Be sure to go into it with some cash reserves though so you can cover any maintenance surprises.

Depending on where you choose to invest, this COVID thing is really only near-term as far as eviction protections go, at least that's how it is in AZ (expires next month). The health issue will go on for awhile, but eviction stays won't last. What will it do to the overall market (40M people unemployed)? That's a different topic.

 If you're looking at a different market, consider the following top-level criteria: Business-friendly state/city, diverse local economy, net influx of jobs and population.

A great read for detailed analysis on where to invest is Emerging Real Estate Markets by David Lindahl. I'm sure there are many others, and a lot of posts on BP with detailed info.

Good luck to you!