Property #1- JV with a focus on learning

[kennyb]

My JV partner and I are recent CA's and are looking to get started within the RE market. We have both done a lot of homework and are ready to "lace up our skates."



We have a modest $50k investment (+conservative amounts for admin costs & asset repairs/improvements) and are looking at getting involved in a buy and lease situation.



The issue is that as we are located in Vancouver, an investment of that size will not go far locally, so we are looking at other areas that present a good environment for learning the ropes of the industry given our financial constraints. We are not insistent on being cash-flow positive (though that would be great), but we are looking to be neutral at least.



Any suggestions on good environments/locations for a few first-timers looking for both investing experience and potential for equity growth? and why?



Any other advice/tips/ notables you wish someone had mentioned to you when you got the ball rolling would also be appreciated.



Cheers,

 

[Thomas Beyer]

Consider buying in Edmonton. Possibly Fort St. John in N-BC. Edmonton will be far more reliable but Ft St John and area has much upside too.



A roughly 1.5h flight so you can do 3-4 meetings and be back that same night in a pinch, after 3-5 2-3 day trips to explore area, find team and start to write offers.



For $50,000 you can buy a 200K property which means: a townhouse or decent condo, or an old old house.



More on how to get started: http://myreinspace.com/forums/p/4391/140298.aspx?#140298

 

[kennyb]

Thanks a lot for your response Thomas.



Edmonton is an area we have been considering as well as northern BC locations such as Kitimat, which has active economic growth and good purhase prices.



cheers.

 

[Thomas Beyer]

[quote user=kennyb]northern BC locations such as Kitimat
Northern BC location can provide potetially more upside, but the risk is far far higher in terms of economic development, growth, ability to find reliable trades, reliable PM, access, cancelled projects (then on again, off again) and size of city .. but could potentially explode like Fort McMurray did in the 90's .. but be aware of severe opposition to huge development projects and pipelines from natives and environmentalists .. so a high risk / high reward gamble .. Edmonton will be far more predictable ..

 

[kennyb]

I agree with your post Thomas, and there are no guarantees that the area will grow as some of the more significant developments are contingent on touchy legal issues.



From my preliminary research I notice that Kitimat currently has pretty good cap rates (around 7/8%), even when using very conservative estimates. But vacancy rates would most likely be a big factor with such a small population so that needs to be seriously considered, along with the other areas you mentioned.



I think I may be overly concerned about being a "small fish in a big pond" with regards to the Edmonton market. Worried that I will get pushed out of good deals due to the large amount of investors and pushed in to a bad investment.



This fear may be a by-product of my lack of experience however...

 

[Thomas Beyer]

[quote user=kennyb]pushed out of good deals ...
good deals exist only for those that buy a lot of average stuff .. as you cannot consistently get "good deals" .. just buy an average asset in a growing sub-market of Edmonton and you will do well.



To know what a good deal looks like you have to know the area and the product (SF, condo, TH, multi, acreage ...) very very well. More here: http://myreinspace.com/forums/p/4391/140298.aspx?#140298