Hey all,
My name is Sam, and I am glad to have found the forum.
I live in the DC area so I am not very sure how I will be able to afford much of anything to invest in. But then again, I am going to a real estate investors group tomorrow, I have been quite excited for a few weeks.
I have some cash to invest, and I am cautious but I do execute.
If any of you are in the DC area with any tips, I hope you will get in touch with me.
Thanks and I look forward to contributing,
Sam
If you live in a market where the numbers don’t make sense, you need to look elsewhere. The key to smart investing is to go where the numbers make sense.
Caveat emptor
The old legal phrase (L for Buyer Beware) springs to mind and I’d advise you to tell nobody about your cache of cash. Or find yourself the target for lots of cons who’ll home-in on your funds.
Then study Craigs List for local props for sale and make some calls and do some looking, all w/o divulging YOU have any $$ and your just telling anybody nosey enough to ask that you have some investor friends who’ve asked you to look around for them.
Set yourself a goal to look carefully @ X number before making any offers and by the time you’ve done so you’ll have a better idea what you might do.
Your DC centered location gives you choice of several jurisdictions and state law differences so you can avoid most heavily gummint-run jurisdictions like DC itself probably is.
And if you know or hear of some local area REI who’s reputed to be doing well see if he/she would let you go with them for a few look-sees so you can then start mimicking their moves.
John,
The information you provided on not sharing my cash on hand is very valuable. Thank you. I have modified my post accordingly.
In any case, I will take the starter tips you brought up into account.
@aristotle – is it possible to invest in property in an area where you do not live?
There has been some good advice already in the thread.
It is possible to invest at a distance. The problem is you are at a bit of a disadvantage. You can not easily visit the area and you do not naturally pick up local knowledge. It still can be done and it will take extra time and money to come up to speed.
The idea of investing where it makes sense is critical. Just because you live in an area does not mean it makes sense to invest there. Even if your local area does look like a winner, you really need to let the numbers tell you when it makes sense to invest.
It could be the best place to invest is Georgetown in DC yet the rents are not going to support a high LTV loan. That would mean tying up a lot more cash/equity to make the cash-flow work. Even though this reduces the leverage it could still be a winning formula long term. One SF investor I know has done very well over a long time. He can only support about a 40% LTV. Based on some comparisons he did with other markets in CA which he is familiar with, the weak cash-flow in SF has been more than made up for by the long term capital growth.
The above can be a strategy for someone who has a high income from a job they love. They can afford to tie up capital as that is not their problem. Normally they will be time poor.
While I agree with a lot that has been said, I don’t think you should abandon your local area just because there are “no deals” in the area. Deals are where you find them and how you negotiate them. You could be in a market where there are deals everywhere and negotiate a terrible deal. Likewise, you can live somewhere that deals are harder to find and negotiate a truly nice deal that will make you a lot of money.
People become motivated Sellers for many reasons, even in areas where its hard to work as an investor. It may take a little more time but its time well spent if you get your moneys worth.
But this is just my opinion. I hope it helps.