I’m a newbie in RE investing. I currently live in CA and as you all know everthing is over priced. I really want to start investing but I’m somewhat not sure If I will make the right choices. Please help!! I’ve been looking at single family homes in Fortworth and Houston TX to rent. Any advice for a newbie wanting to get his feet wet in investing. your advice is greatly appreciated.
Thanks,
antdogg26 :biggrin
Ant,
Its best to invest in an area close to where you live. Find your local REIA and talk to other investors and your area and see what everyone is talking about. See what strategies work in your neck of the woods.
Its hard not to be excited when starting out, but that excitement can get you in trouble. Having properties out of state works for many investors, but when you’re brand new, its really good to get your feet wet where you live.
If you get a bad or dishonest management company, the only link you have to your properties is the telephone. If they choose not to answer or screen your calls out, you could have many sleepless nights worrying about what is REALLY going on with your properties.
While I agree, it’s ideal to invest in your own area. If you are interested in rental properties, it probably doesn’t make sense in CA where price is so high.
I would suggest contacting local REI groups in the area you want to invest and try and build a “team” in that area. It may require a trip or two to visit, but if you can find some good people to help you it’s not so bad. Having a good management company will be crucial, make sure you ask them for references and then call the references.
It definitely takes extra work to invest out of your area, but many people do it successfully.
Investing is real estate in California is like going into the ice business in Alaska. There is a market, but it is very limited and there is a high probability of failure. I would suggest you move closer to the food or open a surf /tofu & bean sprout shop.
One thing to remember about investing out of state… if the other state has personal income tax (and Texas doesn’t but most states do) you’ll potentially need to start filing multistate returns…
Just something to think about.
BTW, I also know that there’s massive noncompliance with this requirement among small real estate investors… but some states ( I recall California is in this club) rather aggressive track down out of state real estate investors and impute taxable income.
Ironically, you probably would owe no tax until the time you sell… It’d just be a hassle-factor-thing
I’m in California and invest only in California. California is the golden state! In my first flip I made thousands in a week. There are many others who have done extremely well. As a beginner you should concentrate on flipping properties to establish cash reserves. Once the your cash foundation is built then move on.