How to narrow down an area to invest in?

[Adam Pearson]

Good evening,

Since getting into the professional world I have been saving each month not really knowing what my plan was. I now have 150k saved and have realized that I want to try to get into real estate investing to truly try and set myself up for the future and hopefully get to a point of being more financially independent.

My main question that I'm hoping for help with is how to narrow down an area to buy my first rental in? I live in california and am open to investing out of state however it just seems so daunting to figure out what state/city/neighborhood to buy in when I've never have even been to any of these places. 

My journey is just starting so I realize there is plenty for me to learn and research but I'm hoping for some help. Thanks everyone.

[Scott E.]

There are a ton of different ways to look at responding to this question. I recommend you start by assessing your goals.

- Are you looking for heavy cash flow today? If so, you are going to want to look in C markets that offer a lower barrier to entry, higher cash flow, but potentially more problematic properties and tenants

- Are you looking for appreciation and rent growth? If so, stick to A and B markets where you will sacrifice cash flow today but likely make up for it in appreciation over a longer period of time

- Do you want to own a bunch of SFR properties, or a couple multifamily properties?

- Will you self manage these rental properties, or hire a property manager?

- Are you open to doing renovations to add value and achieve a higher return, or do you want to pursue turn-key properties that are renovated and have tenants in place?