I’m ready to start investing. I live in LA and I started by looking for houses on the internet for 40,000 or less - I have found 2. They are about 15 minutes from each other, would it be wise to buy a couple houses in different areas to start as rentals.
I’m new to this but here’s what I have learned through Carleton Sheet’s course. He says to start by picking neighborhoods close to you, I assume for the following simple reasons:
It’s easier to patrol these areas and be pretty much the first one to see when these properties come up for sale.
If you do decide to use the properties as rentals, its easier to collect rent when the properties are closer to you, that way you are not wasting your time tracking down tenants when you could use that time investing in more properties!!
I’m by no means saying you should limit yourself to one certain area, but he says its easier for a person just starting out. You can always broaden your areas later after you get your feet wet. I guess that would be up to you whether or not you would want to drive the 15 minutes to pick up another rent check. If the deal is right, I know I wouldnt hesitate a 15 minute drive…to me it would just be a short road trip!! LOL
Hope this helps, like I said I’m just starting out too, but this is just what I have learned from the no money down course.
Ditto on the recommendation from the Sheets program. That’s one of the hottest pieces of information I got from the Sheets program. There are so many reasons why “staying in the area” or a particular area works. There are far too many positives to list. If you do it you will be thrilled over and over again throughout your investing career. Going out of the area will work. I’m just suggesting that you could be thrilled as opposed to just happy by working the area you select. It’s like apple seeds.Some people say an apple seed will produce an apple. I’m suggesting that an apple seed will produce a tree full of apples with the potential to re-create. Work your area to the max. It will pay off for you over and over and over again for years
I am new too, are you talking about Louisiana or LA as in Los Angeles? I’ve learn from Carlton Sheets too to get another property around the area but I am in So. California in the SF Valleys and I just don’t know if I can afford to get another one in my area. The median house in my neighborhood is already $600K, my husband said that it’s either we are too late in REI or we are early for those people who will foreclose when the interest goes up. The prices of houses mentioned in Carlton sheets doesn’t exist in California. Even the bad areas are expensive now, and why would you get a property in a bad area, I don’t want to take that risk… you know what they say… location, location, location.
That’s why it’s called CREATIVE real estate, folks. Bigger prices on the houses = bigger paydays.
Find sellers who NEED to sell, buy an option on a $600K property for $400K and sell the house for $500K.
Is a $100K payday more than you made all last year on your job?
Or sell the option to another investor for $10K. When was the last time you made $10K in a week?
Don’t let the big numbers scare you…
sadly investing in CA just doesn’t make sense. you buy a condo for $350k. your monthly payments are 2,800 and the rent is only 1400.
you can’t just blindly invest in your local area without knowing which part of the cycle you’re in. you also have to make sure you can cashflow, or you can withstand the negative cashflow. without the underlying fundamentals of commensurate rent for house payment, there are no 100k paydays if you go bankrupt or the market drops.
historically, people who’ve bought at the top of the market in CA have had to hold NINE years just to break even. thats not the kind of investing i like to do.
thats why i’m buying in Utah. just coz its a 1000 miles away doesn’t scare me. i’ve tied up with a group of investors. my friends and I buy new construction in bulk. we get discounts and the agent i work with puts in lease-option tenants. i break even or cashflow even with 100% financing. and the tenants pay 3-5k deposit at move in.
don’t just follow some guru’s advice because its convenient. [and Sheets makes his money selling his courses, not through real estate. his stuff his very mediocre].
I don’t think that Suz was suggesting that she just picked an area without doing reaserch or without knowing about the area she selected. I think she said she identifed an area and was questioning investing in the same area or expanding to different areas. So to be clear, and to Niravmd’s point, we’re not talking about investing in your own back yard. We’re saying pick an area and work that area. The area in which one selects may not be in the same neighborhood in which one resides.