New investor and new BP member

[James Wheeler]

I am new to the BiggerPockets website and I really like the information. I am interested in becoming a new investor. I am looking into options for investing that would work for me. I have some credit card debt and I was thinking I should pay that off before I invest in anything.

I was looking into tax lien certificates or getting a rental maybe a small single-family home.

If you purchase tax lien certificates over the counter (Maricopa County) you can make up to a 16% return annually. This method of investing does not seem like a bad idea since you will at least make your investment back. I understand that if you are not repaid in three years you can foreclose on the property. I would imagine that the number of investors who actually make it to the foreclosure process is pretty low. 

I was looking into the idea of purchase a small single-family home to rent. I was hoping to generate a 300-400 per month cash flow on the property. In today’s market in Arizona, I would have to put at least 20% down to be able to generate a monthly cash flow like that. Is it worth getting into Arizona’s rental market right now or should I wait for things to cool down a bit? Say the home sold for 200k an I put 40k down. It would take about 11 years of having a consistent cash flow of $300 per month to get my down payment back. Am I looking at that fact the wrong way?

If I was able to purchase a tax lien certificate for the money I was going to use for a down payment on a rental property, in theory I would be making 16% annually on the tax certificate. I know that I would not be getting a monthly cash flow return on the tax certificate like I would be getting on the rental. It could also take up to three years to receive a ROI.

When I purchase my first rental are there any pointers I need in picking a good property manager?

I have a lot more research to do before I jump into investing. I am glad I found this website.