All Forum Posts by: Kellan Martz

Hi BP. I've been researching cities to do my first investment property and have narrowed down my list:

Top picks: Indianapolis, Kansas City, Cleveland, St. Louis.

Second choices: Memphis, Nashville, Cincinnati

Wild card: Des Moines, Philadelphia 

Investment plan: Single family home (or small duplex) for a buy and hold. Will be working with two partners on this first purchase and our goal is to buy 1-2 in the first year and scale up from there. We would prefer to invest in one city over the long term, but aren't opposed to branching out to a second or third city as we grow.

First purchase: Our purchase price target is 50k to 75k, traditional mortgage or hard money lender with 20% down. 2-3 bedroom property with 1-2 bathrooms, 750-1100 sq. ft. is most likely what we will get at that price. 

Question: If you invest in or know the cities in my lists, which is best and which would you avoid? What might we not know about these cities being that we are from LA? (Yes, snow and rough weather is expected).

(We have worked through the logistics of investing together, etc. so the focus of this post is locations). Thanks!

Thank you to all the posters here. If anyone has an update now that is has been several years, I would love to hear. it. Indy is on the top of my list for turnkey and I am looking to buy in the next few months. Thanks!

We are three close friends, but not related by blood. We currently are not in any business relations together. This will be our first investment purchase with hopefully 1-2 more this year and continued purchases in the coming year. We are planning these as buy and hold properties for the long term (more than 5 years).

Locations: We live in California and have not finalized our purchase location, but midwest states are the focus. 

Tax: This won't be tied to estate of any party in the deal. We have not discussed property sale vs. 1031 exchange.

Thanks~

Three of us are planning to buy a single family home or duplex for a buy and hold plan this summer (or before). We know we most likely need to take title in our own names for mortgage purposes, but then want to transfer the property out of our names to protect us financially.

We can transfer into an LLC or a trust. Anyone have a preference on one versus the other, and why? Anyone have personal experience and care to explain the pros and cons? Thanks in advance.

(Note: I am a former realtor and am a current real estate attorney (we specialize in representing developers of affordable housing properties. I have experience setting up LLCs and drafting LLC operating agreements, etc.)

Such great replies so far, I appreciate them all. I’ll reply to the questions on the reply thread, but one common  question I see: we are not tied to any one area, so suggestions like Columbus OH are very welcome (as are suggestions on cities to avoid). 

Background: Two friends and I have been meeting to discuss investing in real estate together. Pooling our finances and our risk is the reason, plus we work well together. We have run a nonprofit together for the last 2.5 years, so we have weathered some of the challenges and learned how to work together. We are also aware of the risks of working with friends. I am a real estate attorney and have experience setting up LLCs, writing operating agreements, etc. (my firm does affordable housing development) and I've spent time doing landlord-tenant law. The other two are not sophisticated in real estate, so I would likely be taking the lead while they would be contributing financially and also making decisions on the larger matters (while I would probably handle more day to day issues).  

Market search: We do not want to invest in our home state of California due to the market cost. So far, we have focused on Kansas City, Indianapolis, and Oklahoma City but are not tied to those areas. We want to find a buy and hold property with a cost of $50,000 - $125,000. We would hire local property management to handle the property. 

Deal Structure: The property would ideally be held by a single purpose LLC formed in the state where the property is located and we would have a strong operating agreement in place to try and avoid as many problems as possible. We plan to finance and put approx. 20% down on these property. While we want buy and hold, we have not discussed an exit strategy in terms of how long to hold for etc. Our goal is to purchase by late summer 2020.

We would love thoughts on all these topics, but specifically on the market question and the deal structure idea. Also, if you have invested with friends or family in the past - your advice would be greatly appreciated. The good, bad or ugly.  Thanks in advance and happy new year to you all.

Hi all,

New to BP here.  I'm curious if anyone is starting or working on a flip in LA, or is purchasing a home to hold and rent?  I would love to meet up with you at the location and see it.  I'm trying to learn all I can.

Thanks!

I'm not sure if you've taken a look at what @Jay J. actually posted, but it is more detailed than you might think.  The podcasts are full of information and the Ultimate Beginner's Guide is also helpful.  Good luck out there.

I'm new myself, but my advice would be to contact people on here directly.  Many people here are extremely helpful and are willing to answer your questions.  But I have always gone to people with at least a few more specific questions than just "help me".

Also, you get more bees with honey - so be friendly and appreciative.

Thanks to @Steven Thompson, the podcasts are my next step!

@Phillip Dwyer - I just signed up for a number of sub market forums. These sound perfect for targeting my research and questions to people who are interested in and know these areas. Thanks for that.

Any more information is appreciated and thanks to everyone who has commented.  I can already tell there is a wealth of knowledge on this site and I would be a fool not to learn from everyone.