Start in state or state in the state we will be moving to

[Adam Amato]

Hello,

My fiancé and I looking to invest in a small multifamily, most likely a duplex, in either the Milwaukee area or the Houston/Huntsville area. She will be starting her grad program Houston after we get married here in Wisconsin in April 2023. We currently live in Williams Bay just outside Lake Geneva and really want to get started with this journey. My fiancé works in Milwaukee and has a pretty good sense as to where the better neighborhoods are and she has a decent sense of the city as a whole. Investing in a property in Milwaukee in my opinion would be a good place to start because we would be here in the area able to oversee the rental in person. It could give us great hands on experience with the process and when any obstacles present themselves we will be able to handle them if its something we can tackle ourselves. I believe we would be able to unload the property before we move if necessary or maybe even hold it and continue our portfolio in Texas should the rental prove to be a success. Now we will be moving looking to Houston or Huntsville in May 2023 and would like to do rentals down there too. Neither of us have ever been to Houston before and we do not know the area. I have been researching areas there just to do my due diligence but I'm still unfamiliar with Houston as a whole, same goes for Huntsville. 

So now to my questions. Start here in Milwaukee, invest remotely in Texas, or wait till we move to Texas? 

Currently we are leaning to starting off in Milwaukee and holding the property even once we move to Texas. What kind of hassles should we expect with keeping a property and moving to a whole new state? I imagine it could be as easy as just establishing with a good property manager and hoping they are actually reliable. We should already have a decent rolodex built up for people we can call with various problems by then, which I feel takes a big load off of owning rentals remotely.

We are completely fine with any of the options as we just want to play this as smart as we can so any advice would be wonderful. 

Thanks

[Marcus Auerbach]

@Adam Amato I bought my first duplex in 2008 and at the time it was "proof of concept" as I was not sure if this would actually work. This was before BP, all I had was a bunch of books, CD courses to listen to (yes, I know, but at least it was not tapes...) and a residential real estate agent who was very nice, but had no clue either.

Turns out it worked; in 2014 I was out of the rate race and the rest is history. Today I will tell you there is no question IF you will be succesful, the business model is very forgiving, it's actually quite difficult to screw it up, you'd have to do some really stupid stuff and keep that up for a long time... So, I hope that adresses that concern.

In terms of now or in 2 years I can give you a good answer: if you ask any seasoned RE investor about their regrets, after some thought they will always reply, their biggest regret was not starting sooner. Time is something you can't get back. 

In our current situation we also have two other factors: prices in Milwaukee have been going up on an increasing pace, over 10% in 2020 alone. (Congratulations to everyone owning a portfolio!) and interest rates are likely to go up as well, probably half a point this year. Personally I am also expecting inflation to increase, we are already seeing it with building materials, lumber went from $300 to $1000, appliances are significantly more expensive then they were a year ago..

If you are thinking about a duplex, I have a video series about house hacking on YouTube - even if you are not planning on moving in, it will give you a good starting point. And you can also find a lot of data about the current state of the local housing market. You can find the link on my BP profile page.

Seldom sell. There is a reason it is called buy&hold and not buy&hold&sell. There is no reason to sell a cash flowing property once you move! You will no the property well enough, the only question is if you manage remotely or if you hire a PM. You can always start by self managing and get a good PM in if you feel its too difficult or time consuming.

Hope this helps!