Long distance vs hands on

[Kyle Allen]

I’m looking to buy my first rental property soon and I’m not sure if I should get a hands on self managed property in Denver metro or a more affordable market out of state. 

Entry costs are lower out of state but I have a great Real Estate agent with a vast network I can capitalize on. 

Any thoughts?

[Travis Biziorek]

Which option is going to better fit your goals?

[Bill S.]

@Kyle Allen so ... far too many unknowns to comment on your situation. What are your goals? What are your available funds? What is your available time? What are your skills and interests? What makes your Real Estate agent "great"? 

Personally, local is best but without knowing more about you, it might not be a good approach.

[Peter Dorinsky]

Quote from @Kyle Allen:

I’m looking to buy my first rental property soon and I’m not sure if I should get a hands on self managed property in Denver metro or a more affordable market out of state. 

Entry costs are lower out of state but I have a great Real Estate agent with a vast network I can capitalize on. 

Any thoughts?

Buying something turnkey and local that you can self-manage is going to be an easier way to get your foot in the door compared to buying something out of state. If you can house-hack for your first deal that's even better. But if you plan to invest out of state it'll be important to build your core-4: https://www.biggerpockets.com/blog/core-four-real-estate-tea...

I'd also recommend traveling to any out of state market you plan to invest in. It's great that you already have an agent connection, but It will take time to build those other trusting relationships and familiarize yourself with a new market.

[Julio Gonzalez]

You came to the right place for information, Kyle! 

[Nadeem Alamgir]

Hey @Kyle Allen if you're open to out-of-state investing and looking for an inexpensive market that produces strong cash flow, I recommend checking out Cleveland, OH.

With the right out-of-state agent, they can help guide you in the right direction as you can take a less hands-on approach. 

[Kyle Allen]

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

[Kyle Allen]

Quote from @Bill S.:

@Kyle Allen so ... far too many unknowns to comment on your situation. What are your goals? What are your available funds? What is your available time? What are your skills and interests? What makes your Real Estate agent "great"? 

Personally, local is best but without knowing more about you, it might not be a good approach.

I want to climb the ladder of real estate as fast as possible (more doors & cash flow). Eventually I want a large portfolio that gives me the flexibility to cash flow AND fix & flip. 

My funds are 35k liquid plus 1.4k/monthly savings towards investments. I also have about 80k in equity in my home. 

I’m not sure if you mean timeline long term or hours a day I’m available. I’m planning on being in Denver for several more years and I currently have about 12-16 hours a week I can put towards Real Estate. 

I’ve heard you should factor in:
Strengths
Weaknesses
Wants

Opportunities

My strengths are that I’m handy (I’ve been fixing things on my own home since 2021) and I work in industrial & commercial HVAC so I would add value with labor. I’m constantly fixing housing-adjacent problems on the job which is building my experience too. 

My agent is a long time family friend who has had his own Real Estate Company for 15 years (Offices in Evergreen & Denver). He’s very successful and has my best interest at heart. Plus he has an extensive network that I can tap into.

[Travis Biziorek]

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

[Kyle Allen]

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

Based on an BP article about best housing markets according to the Housing Market Indices Denver is the best market. I guess I will have to decide if cash flow or “quality market” is more important for my first deal. Which do you think is a better situation for someone’s first deal if their long term goal is a big portfolio? 

[Travis Biziorek]

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

Based on an BP article about best housing markets according to the Housing Market Indices Denver is the best market. I guess I will have to decide if cash flow or “quality market” is more important for my first deal. Which do you think is a better situation for someone’s first deal if their long term goal is a big portfolio? 

That's really not enough information to provide much input. A "big portfolio" should not be your goal. 

You can go to D Class areas in cheap markets and build a big portfolio. But is that really what you want?

Seems you'd be well served by taking some time to better define your goals and the timeline in which you want to achieve them. That should help you narrow down what markets you should be looking at.

[Kyle Allen]

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

Based on an BP article about best housing markets according to the Housing Market Indices Denver is the best market. I guess I will have to decide if cash flow or “quality market” is more important for my first deal. Which do you think is a better situation for someone’s first deal if their long term goal is a big portfolio? 

That's really not enough information to provide much input. A "big portfolio" should not be your goal. 

You can go to D Class areas in cheap markets and build a big portfolio. But is that really what you want?

Seems you'd be well served by taking some time to better define your goals and the timeline in which you want to achieve them. That should help you narrow down what markets you should be looking at.

I appreciate the feedback Travis. I will narrow down my goals so I can better focus my efforts. What are your goals?

[Travis Biziorek]

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

Based on an BP article about best housing markets according to the Housing Market Indices Denver is the best market. I guess I will have to decide if cash flow or “quality market” is more important for my first deal. Which do you think is a better situation for someone’s first deal if their long term goal is a big portfolio? 

That's really not enough information to provide much input. A "big portfolio" should not be your goal. 

You can go to D Class areas in cheap markets and build a big portfolio. But is that really what you want?

Seems you'd be well served by taking some time to better define your goals and the timeline in which you want to achieve them. That should help you narrow down what markets you should be looking at.

I appreciate the feedback Travis. I will narrow down my goals so I can better focus my efforts. What are your goals?

My original goal was to create $15,000 in gross rental income in 3-5 years.

Now it's more simple. I want to finish my ADU project this year so I can be financially free. It will happen. We have our drywall inspection today!

[Ryan Arth]

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

Based on an BP article about best housing markets according to the Housing Market Indices Denver is the best market. I guess I will have to decide if cash flow or “quality market” is more important for my first deal. Which do you think is a better situation for someone’s first deal if their long term goal is a big portfolio? 

That's really not enough information to provide much input. A "big portfolio" should not be your goal. 

You can go to D Class areas in cheap markets and build a big portfolio. But is that really what you want?

Seems you'd be well served by taking some time to better define your goals and the timeline in which you want to achieve them. That should help you narrow down what markets you should be looking at.

 Agreed. As a guy told me when BP first launched, doors aren't the goal, return on your capital is. He had a lot of doors but collected rent in cash with a pistol. 

Regarding local versus remote, I went through the same thought process. Does the local knowledge and contact base in a flat market outweigh the possible gains to be had in a growing market? It really depends on a lot of factors, how knowledgeable you are about your local market, and whether you would be passively investing or actively investing remotely. 

Ultimately, I decided to stay local for now. I will probably invest more passively (if not completely passively) elsewhere in the future for the right opportunity.

[Samuel Diouf]

I personally think out-of-state investing is a top choice. You can invest in any market selecting the ones that you believe are seeing growth, and do it remotely. Once you get your systems down, you have a real estate business that you can take anywhere and be still be successful. I work with plenty of out-of-state investors who are seeing great success here in Ohio.

[Kyle Allen]

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

Based on an BP article about best housing markets according to the Housing Market Indices Denver is the best market. I guess I will have to decide if cash flow or “quality market” is more important for my first deal. Which do you think is a better situation for someone’s first deal if their long term goal is a big portfolio? 

That's really not enough information to provide much input. A "big portfolio" should not be your goal. 

You can go to D Class areas in cheap markets and build a big portfolio. But is that really what you want?

Seems you'd be well served by taking some time to better define your goals and the timeline in which you want to achieve them. That should help you narrow down what markets you should be looking at.

I appreciate the feedback Travis. I will narrow down my goals so I can better focus my efforts. What are your goals?

My original goal was to create $15,000 in gross rental income in 3-5 years.

Now it's more simple. I want to finish my ADU project this year so I can be financially free. It will happen. We have our drywall inspection today!

My end goal is get FIRE. I appreciate your advice Travis. 

[Kyle Allen]

Quote from @Ryan Arth:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Quote from @Kyle Allen:

Quote from @Travis Biziorek:

Which option is going to better fit your goals?

I want to acquire doors and cash flow but im not sure which market will get me there faster

 My understanding of the Denver market is that it's not a cash flow market. 

So if cash flow is a big part of your goal I'd likely be looking outside your immediate market.

Based on an BP article about best housing markets according to the Housing Market Indices Denver is the best market. I guess I will have to decide if cash flow or “quality market” is more important for my first deal. Which do you think is a better situation for someone’s first deal if their long term goal is a big portfolio? 

That's really not enough information to provide much input. A "big portfolio" should not be your goal. 

You can go to D Class areas in cheap markets and build a big portfolio. But is that really what you want?

Seems you'd be well served by taking some time to better define your goals and the timeline in which you want to achieve them. That should help you narrow down what markets you should be looking at.

 Agreed. As a guy told me when BP first launched, doors aren't the goal, return on your capital is. He had a lot of doors but collected rent in cash with a pistol. 

Regarding local versus remote, I went through the same thought process. Does the local knowledge and contact base in a flat market outweigh the possible gains to be had in a growing market? It really depends on a lot of factors, how knowledgeable you are about your local market, and whether you would be passively investing or actively investing remotely. 

Ultimately, I decided to stay local for now. I will probably invest more passively (if not completely passively) elsewhere in the future for the right opportunity.

Well said. Given I’m brand new I’m hesitant to go long distance because contractors could take advantage of you more because you aren’t there to hold anyone accountable. 

[Kyle Allen]

Quote from @Samuel Diouf:

I personally think out-of-state investing is a top choice. You can invest in any market selecting the ones that you believe are seeing growth, and do it remotely. Once you get your systems down, you have a real estate business that you can take anywhere and be still be successful. I work with plenty of out-of-state investors who are seeing great success here in Ohio.

 What has your experience been like for investing out of state? I’m concerned that contractors out of state could easily take advantage of you never being on site to keep the contractors accountable 

[Samuel Diouf]

You need to build a solid boots on the ground team with people who you trust. I would start with an investment focused agent as they should have the network for everyone you need. 

[Bill S.]

@Kyle Allen Your savings and savings rate are commendable and a great start to long term wealth. There is no get rich (FIRE) quick (3-5 years) with $35K and $1.4K per month savings in Denver real estate (and I seriously doubt any other market). Denver real estate ownership is a long game, 10 plus years. The plus side is the 10-16 hrs a week. You need a side hustle to increase your income. You could start an HVAC company that does installs and/or does trouble shooting when it's peak season. You could flip houses in your spare time but it is very competitive and capital intensive. If you can source deals with a margin in them, then that is a great way to grow quicker than most.

Your family friend that owns the real estate company may or may not be a help. Does he own his own real estate and does he help investors buy real estate too? If not, then he may not be at all helpful. If his real estate business is brokerage for home owners buying and selling their primary residences, then he probably does not have the knowledge to help someone invest in real estate. Just because he means well does not mean he knows what will help you.

[Kyle Allen]

Quote from @Bill S.:

@Kyle Allen Your savings and savings rate are commendable and a great start to long term wealth. There is no get rich (FIRE) quick (3-5 years) with $35K and $1.4K per month savings in Denver real estate (and I seriously doubt any other market). Denver real estate ownership is a long game, 10 plus years. The plus side is the 10-16 hrs a week. You need a side hustle to increase your income. You could start an HVAC company that does installs and/or does trouble shooting when it's peak season. You could flip houses in your spare time but it is very competitive and capital intensive. If you can source deals with a margin in them, then that is a great way to grow quicker than most.

Your family friend that owns the real estate company may or may not be a help. Does he own his own real estate and does he help investors buy real estate too? If not, then he may not be at all helpful. If his real estate business is brokerage for home owners buying and selling their primary residences, then he probably does not have the knowledge to help someone invest in real estate. Just because he means well does not mean he knows what will help you.

Your honest criticism is very helpful. I think I might be trying to put the cart before the horse with attaining FIRE. I appreciate it Bill.