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Thanks for the replies. The idea seemed to easy which was why I was asking. The whole thing came up when I was talking with someone about this a few months ago who was doing something similar but from what you guys are saying he must be losing hundreds of dollars a month on this property and just doesn't realize it or doesn't like to tell people that.

I think I'm just grossly underestimating the expenses associated with a rental property. I was only factoring in the very basics like insurance, taxes, management, and the mortgage. I guess the key to making it all work just comes down to the price you pay for the property.

Hi,

First of all I'm about as new to real estate as you can get. Is investing in single family home rentals a waste of time? I've always been interested in it but just never had the motivation. I live in San Diego so purchasing a home with the intent of making it a rental doesn't seem to work so well out here as the price of real estate is still extremely high while rent isn't.
So I was thinking that maybe I could find an area out of state where I could basically purchase a house with the intent of renting it out while building equity and maybe even producing a couple hundred bucks a month in cash flow. This is probably the most basic form of a real estate investment there is but I feel like it's an easy way to get started. About 8 months ago I made a post about Biloxi MS but no one seemed to have any opinions on it. After doing more research I'm still convinced that the area will experience growth over the next few years. I'm thinking about actually taking a quick trip out there to scope out the particular area I'm interested in and maybe look for some deals. I figure if I pick something up in the 150k range I can probably rent it out for 1200-1300 which should cover mortgage, management, taxes, insurance, etc. I'm also considering some pre-construction projects in the high 100s but I have to see if the math works out on those.
The only thing I'm sort of confused about is the actual buying process. About the only thing I have in place at the moment is financing. I'd prefer not to use an agent as I'll be doing the scouting myself. I guess what I'm confused about is the actual offer. Is there some place I can get sample offers or templates or something that can be modified slightly depending on the conditions I want to set for this particular property? Sorry if this sounds ridiculous but I've just never been exposed to the process first hand. Furthermore, at what point do I start looking for an escrow/title service? Should I have that in place before creating the offer? My goal with this whole thing is to build some equity while renting out the property and maybe make a couple hundred bucks a month. Thanks in advance for any comments or opinions.

You could rent a really small 1bdr in a very bad neighborhood for that much in San Diego.

I was recently looking at some news articles about Biloxi MS, ever since the hurricanes last year it appears as though the casinos are now able to build on land. According to the Biloxi website there are numerous contracts in the works for several large casino resorts in the area as well as large high end, high rise, beachfront condo complexes. I assume these large casinos would bring jobs to the area and these workers would need places to live. Housing in the surrounding suburbs is still pretty cheap but it's steadily rising. MS overall appears to still have a growing housing market. I was looking at a new development in the area in the 200k range but I'm still a little unsure of my theory. Number wise everything works out, the property should produce a small positive cash flow but what I'd be banking on is the appreciation of the land being in close proximity to Biloxi. Anyone have any input on this? thoughts, comments, etc. Also, if anyone has any experience with the area please chime in. I'm looking for a reputable mgmt company.

Hi, I'm currently researching property management companies in the area, just curious if anyone has a company they've dealt with personally in the MS area. Any recommendations are appreciated and welcomed.

Thanks,

Brian

Thanks Wesley, that's kind of what I was leaning towards. There just seems to be too many things that you need to know before actually getting into a property that I might overlook simply due to lack of experience. I do believe we're going to be seeing a lot of foreclosures as well as very motivated sellers pretty soon here in San Diego. I've talked to many people who mistakenly purchased homes at the peak of the overheated housing market here with the intention of selling them a couple years down the road. Most of them are now renting the properties losing upwards of $1000/mo.

I'm just curious where everyone gets there out of state investment ideas from. I'm new to real estate but it's always something I've been interested in but I've just never had the capital being a student. Since graduating I've managed to save up a good chunk of change but it's just not anywhere near enough to buy anything in my area. Although I can't say that I'd even want to. I'd probably have a better chance of winning the lottery then finding an income producing rental in San Diego.

Would I be better off sitting tight for a couple years and looking for something local at that time? I feel like investing out of state would be a pretty big leap for me and from reading some past threads it definitely seems like there's a lot more involved.
Thanks for reading