All Forum Posts by: Bastian Kneuse

HI BP- Community,

I am a new investor and have been studying real estate investing for quite some time from the sideline. The time has come to get my feet wet and actually make something happen. However, I feel that I am suffering from analysis paralysis. I have absorbed so much information (possibly too much) that I don't even know where to start. The first hurdle I am trying to take is identifying a 2-3 good markets to invest in. I am currently living in the San Francisco Bay area and look to invest out-of-state, given the crazy housing prices here. I am looking for a market that would be good for a newbie investor. More specifically, I am looking for SFH in the range of $100-150k in a balanced market (acceptable cash flow – ideally around the 1% rule and acceptable value appreciation). The goal is to hold the property long-term. I totally understand that my first property will most likely not be the deal of the century, which is ok. My goal is to get my feet wet and learn the ropes of real estate investing by getting involved and slowly building up a portfolio, which generates passive income.

I have been hearing a lot about markets such as San Antonio, Kansas City or Indianapolis as good markets to get started given the healthy local economy (economic and demographic trends, housing inventory, rental demand) and also the good supply of real estate agents, contractors and property managers. Given this is my first rodeo, I would really value any insights all of you may have. Originally, I looked into Jacksonville, FL, but that does not seem to be a good place to invest anymore. In summary, I am trying to find answers for the following questions:

1. What are good markets to invest in for newbie investors?

2. Is now still a good time to purchase investment property given where we are in the economic cycle? Pro – still low interest rates/Con – real estate prices have come up quite a bit (seller market), looming recession

3. Given this is will be my first deal and it will be a long-distance investment, should I look for a turnkey property or one that needs some work? I have read David Greene’s book on long-distance real estate investing, but my guts tell me that it won’t be that straight-forward as outlined in the book.

I would appreciate any insights/thoughts/feedback/concerns. 

Thank you very much!

Hello,

I was looking through the forums but did not seem to find an answer to my questions. My wife and I are considering buying multiple investment properties in the next 2 years or so and was wondering about the best strategy for traditional mortgage applications. My wife and I have both excellent credit scores, high paying jobs and plenty of assets. With regards to mortgage applications for investment properties, would it make sense to apply for mortgages jointly or individually? Would we be able to get more mortgages if we were to apply individually in the long run? I heard that the max amount of mortgages is capped at 5. Could we technically get up to 10 if we apply to each mortgage individually? 

I would appreciate any thought you may have. 

Thank you!

@Account Closed great! Let me know what's the most convenient way to connect.

Thanks for all the really really good and helpful feedback.

Here are my take-aways:

1. SF Bay area is more a play on value appreciation as opposed to immediate cash flow, which requires a longer holding period (e.g. > 5 years)

2. Buy a home in the Bay area now and convert to rental property down the road (once moving out of state) could make sense, however this again requires a longer time horizon as well as dealing with the headaches of being an "out-of-state" investor

3. Cash Flow is key when starting out in real estate investing, which supports out-of-state investing

4. Investing in Bay area would tie up a lot of capital with no immediate return

For me, I think, it boils down to two aspects: 1) time horizon and 2) capital. Hence, I am leaning more towards exploring out of state investment opportunities while continue to rent a home in the SF Bay area.

@Account Closed I am very interested in learning more about your experience in the Jacksonville market. Please let me know if you are open to chat.

Thank you very much for the feedback. Everything piece of advice is extremely helpful in deciding what route to go. I tend towards continuing to rent, while building up a property portfolio. Obviously, I still need to more research on the market and type of investment property that I will target. However, since the direction becomes clearer to me now, I can dedicate more time on the investment route.

I mentioned in my original post that I am fearful about an upcoming market correction. This may not be the correct forum to post, but are there any opinions on holding off investing for now and wait for a potential correction to pass? Also, are there any recommendation about up-and-coming markets that are worth taking a look at?

Thanks a lot!

Hi everybody,

I recently discovered the Bigger Pockets podcast and became an instant fan. I am new to BP and real estate investing in particular. I have done some research as well as read some books to familiarize myself with this subject and concluded that I would like to get involved in real estate investing. As I am getting more knowledgeable about the “ins” and “outs”, I am struggling with the following question: Should I purchase my own house first and then engage in investment properties? Or is there a scenario where it makes sense to continue being a renter, while investing in out-of-state properties?

Let’s back-up for a second…. I am currently living in the San Francisco Bay area (very expensive!!) and live in a rental property with my wife and baby boy. Our monthly rent pushes $4,000 (...did I say I live in the SF Bay area?). We moved to the SF Bay area about 2 years ago for job reasons (…you guessed it – technology) and currently rent a 2 bedroom house. Both, my wife and I have a comfortable 6-figure income as well as savings stacked away, which enables us to “swing” the rent. Most of our savings are nicely invested in the stock market; however I would like to implement a system that provides additional passive income on a regular basis, which led me to real estate investing as a viable option. I considered purchasing a home in the SF Bay area, but some arguments deter me: 1) I am unsure on how long my family will stay in the Bay area – there is a distinct possibility that we will move to a new location within the next 5 years. 2) Houses here are pushing the million dollar mark tying up a lot of capital, which could be used differently (season tickets for the Warriors, anyone?). 3) The SF Bay area housing market is extremely hot – I am very fearful about a mild to severe bust in the near term. 4) Buying a house in the SF Bay area would not leave enough ammo to pursue other investment properties.

I am currently looking into single family investment properties in Jacksonville, FL. (Seeing the words “investment properties” and “Florida” in the same sentence may give some people the chills, but I can back that up.) A) The Jacksonville economy seems to be very promising over the medium term – a lot of growth happening. B) My sister-in-law and brother-in-law are real estate agents in Jacksonville and can hook me up with good deals, excellent contractors and property management companies. C) I used to live in Florida and am familiar with how things are being done there. D) I have eyes and feet on the ground given parts of my family live there. If I would take a portion of my current savings, I could probably invest in 2-3 properties in the Jacksonville area for a buy-->fix-up-->rent-out strategy.

Long story short, I am very interested in some expert opinions on how to proceed in my real estate investment endeavor. I would appreciate any feedback…if good or bad.

…you made it! Thanks for sticking with me to the end. :-)