200k Purchase Price Seeking Cashflow

[Zane K.]

Hi Everyone, 

This is my first time posting so I apologize if this is the wrong forum. 

I live in California and like many California Investors prices are just too high in the area I live. I am looking for my first rental property with a goal of Cashflow! 

My max purchase price is around 200k. 

I have never been to Texas but am planning on making a trip to check the area out. What areas would you recommend for cash flow at my purchase price?

I am open to areas outside of Houston as well. Any insight you can give me is very appreciated!

Thank you!

[G. Brian Davis]

Hi @Zane K., glad to hear you're getting into real estate!

It's really hard for new investors to buy good rental properties and oversee them well even when you live nearby and know the area well. It gets infinitely harder when you invest out of state as a novice investor.

I got rid of all my rental properties when I moved away from my hometown. It was just too much work for not enough money.

Today I invest passively in group investments (real estate syndications) and notes. I go in on these with an entire investment club of other sharp investors, and we vet the deals together and invest with $5K instead of the typical $50-100K. I earn much higher returns than I ever did as a rental investor, with almost no work required on my part.

But I would certainly never discourage anyone from investing in rentals if they are truly passionate about building a side hustle business. Just go in knowing that that's what it will be. 

[Nicholas L.]

@Zane K.

to echo what was said by @G. Brian Davis

if you wan to invest in rentals, great. but know that (1) they aren't passive, and (2) you won't cash flow for several years. 

https://www.biggerpockets.com/forums/12/topics/1171104-the-m...

[Travis Biziorek]

Hey Zane, I could be wrong but I'd be shocked if you're able to find positive cash flow in Houston. I have a buddy that invests there but looks at it as an appreciation play.

I'm also in CA but invest in Detroit. If you're looking for cash flow today your options are basically limited to the midwest. 

Happy to share some resources or talk more if you want to connect.

[Samuel Diouf]

Hey Zane, at the max price of $200k there are some great opportunities in Columbus, Ohio. Many investors from California, are choosing to invest in the midwest because of the yearly returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus due to the same reason.

[Peter Dorinsky]

Quote from @Zane K.:

Hi Everyone, 

This is my first time posting so I apologize if this is the wrong forum. 

I live in California and like many California Investors prices are just too high in the area I live. I am looking for my first rental property with a goal of Cashflow! 

My max purchase price is around 200k. 

I have never been to Texas but am planning on making a trip to check the area out. What areas would you recommend for cash flow at my purchase price?

I am open to areas outside of Houston as well. Any insight you can give me is very appreciated!

Thank you!

Hey Zane, like has been said already, it's good to be aware of what you're getting into when buying your first investment property, especially if you plan on investing out of state. I definitely encourage you to visit whatever market you plan to invest in to familiarize yourself with the area and connect with local professionals. I'd also recommend reading David Greene's article on building your core-4 for OOS investing: https://www.biggerpockets.com/blog/core-four-real-estate-tea...

[Patrick Drury]

@Zane K.

If you're unable to invest locally you should invest out of state. I would recommend looking in the Midwest. Columbus, OH is a great place to start. It's a nice balance of cash flow and appreciation. Also, it has lots of job opportunities and population growth. I also live and invest locally here in Columbus.

[Morayo Adebiyi]

Quote from @G. Brian Davis:

Hi @Zane K., glad to hear you're getting into real estate!

It's really hard for new investors to buy good rental properties and oversee them well even when you live nearby and know the area well. It gets infinitely harder when you invest out of state as a novice investor.

I got rid of all my rental properties when I moved away from my hometown. It was just too much work for not enough money.

Today I invest passively in group investments (real estate syndications) and notes. I go in on these with an entire investment club of other sharp investors, and we vet the deals together and invest with $5K instead of the typical $50-100K. I earn much higher returns than I ever did as a rental investor, with almost no work required on my part.

But I would certainly never discourage anyone from investing in rentals if they are truly passionate about building a side hustle business. Just go in knowing that that's what it will be. 

 @G. Brian Davis can we discuss which groups you are involved in? I'm interested in pursuing this route instead of the rental-investment options. Thanks! 

[Morayo Adebiyi]

@G. Brian Davis please see above message.  

[G. Brian Davis]

Quote from @Morayo Adebiyi:

Quote from @G. Brian Davis:

Hi @Zane K., glad to hear you're getting into real estate!

It's really hard for new investors to buy good rental properties and oversee them well even when you live nearby and know the area well. It gets infinitely harder when you invest out of state as a novice investor.

I got rid of all my rental properties when I moved away from my hometown. It was just too much work for not enough money.

Today I invest passively in group investments (real estate syndications) and notes. I go in on these with an entire investment club of other sharp investors, and we vet the deals together and invest with $5K instead of the typical $50-100K. I earn much higher returns than I ever did as a rental investor, with almost no work required on my part.

But I would certainly never discourage anyone from investing in rentals if they are truly passionate about building a side hustle business. Just go in knowing that that's what it will be. 

 @G. Brian Davis can we discuss which groups you are involved in? I'm interested in pursuing this route instead of the rental-investment options. Thanks! 

Hi Morayo, absolutely! Let's connect by direct message. 

[Liam Maher]

Hi Zane, Texas is ok for cash-flow but nothing special. Here's a list of the best major cities for cash-flow...mostly it's the midwest and also upstate NY

[Tyler Baker]

Quote from @G. Brian Davis:

Hi @Zane K., glad to hear you're getting into real estate!

It's really hard for new investors to buy good rental properties and oversee them well even when you live nearby and know the area well. It gets infinitely harder when you invest out of state as a novice investor.

I got rid of all my rental properties when I moved away from my hometown. It was just too much work for not enough money.

Today I invest passively in group investments (real estate syndications) and notes. I go in on these with an entire investment club of other sharp investors, and we vet the deals together and invest with $5K instead of the typical $50-100K. I earn much higher returns than I ever did as a rental investor, with almost no work required on my part.

But I would certainly never discourage anyone from investing in rentals if they are truly passionate about building a side hustle business. Just go in knowing that that's what it will be. 

 Do you mind getting in touch via direct message?

[G. Brian Davis]

Sounds great @Tyler Baker, sending you a connection request now. Always happy to talk real estate!

[Remington Lyman]

Quote from @Zane K.:

Hi Everyone, 

This is my first time posting so I apologize if this is the wrong forum. 

I live in California and like many California Investors prices are just too high in the area I live. I am looking for my first rental property with a goal of Cashflow! 

My max purchase price is around 200k. 

I have never been to Texas but am planning on making a trip to check the area out. What areas would you recommend for cash flow at my purchase price?

I am open to areas outside of Houston as well. Any insight you can give me is very appreciated!

Thank you!

I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

https://www.biggerpockets.com/blog/core-four-real-estate-tea...

I invest locally in Columbus, Ohio

[Travis Timmons]

If you find a place that will cash flow at a 200k budget on long term rents in Houston, I promise you that you do not want to own in that neighborhood AND it probably does not actually cash flow due to the class of tenant, capex, vacancy, and turnover costs.

I'd suggest you try to find some connection to a place rather than randomly picking a market. And if you do randomly pick a market, spend a fair amount of time there. And by connection, I mean a place where friends and family live, where you went to college, somewhere that you have spent time. Otherwise, you're kind of relying on the word of strangers that likely have something to sell.

[Michael Dumler]

@Zane K., if cash flow is your primary focus, you must get creative with your strategy. The days of long-term cash flow rentals are over unless you're willing to put down 35%+. Creative investment strategies to achieve high-yield cash flow include short-term, medium-term, rent-by-the-room, nursing/retirement homes, etc. Moreover, to piggyback off others, $200k in virtually any market means C/D-class unless you have vital information about the area turning around/gentrifying (new development/infrastructure). However, this approach is speculative and risky. 

[V.G Jason]

$200k is almost half the median income. In true Houston, you're not finding that. You can find that in bad areas of Houston, but you're opening yourself up to whole other areas of risks.

$200k is your max purchase price or max downpayment funds? If the former, keep that growing and wait to invest later. If the former, ok that's a bit different. You can likely find a distressed property here in Houston in a good area with $80k-$100k out of pocket and fully funded by HML for the other % & rehab, then maybe keep some of the money in the house and have it more cash flow oriented or take all out and eat the little OTM play. But the quality of property would be worth the investment today.

[Sam McCormack]

Quote from @Zane K.:

Hi Everyone, 

This is my first time posting so I apologize if this is the wrong forum. 

I live in California and like many California Investors prices are just too high in the area I live. I am looking for my first rental property with a goal of Cashflow! 

My max purchase price is around 200k. 

I have never been to Texas but am planning on making a trip to check the area out. What areas would you recommend for cash flow at my purchase price?

I am open to areas outside of Houston as well. Any insight you can give me is very appreciated!

Thank you!

It doesn't happen too terrible often, but sometimes you can find a duplex under 200k in Greater Cincinnati. Doesn't hurt to at least look in the area, and when it comes up we can see it. Let me know if you have questions on the area!

[Sergio P Ramos]

@G. Brian Davis would ypi mind sharing your investment groups?

[Jimmy Lieu]

Quote from @Zane K.:

Hi Everyone, 

This is my first time posting so I apologize if this is the wrong forum. 

I live in California and like many California Investors prices are just too high in the area I live. I am looking for my first rental property with a goal of Cashflow! 

My max purchase price is around 200k. 

I have never been to Texas but am planning on making a trip to check the area out. What areas would you recommend for cash flow at my purchase price?

I am open to areas outside of Houston as well. Any insight you can give me is very appreciated!

Thank you!

Hey Zane, totally can relate with you being from an expensive real estate market - I moved to Columbus a few years ago (from Portland, Oregon which was super expensive) to become a full time real estate investor, and ever since, I've completed quite a lot of BRRRRs, flips, and own a successful rental portfolio here in Columbus Ohio. There's so many catalysts for population and job growth (Intel, Honda, Amazon, Nationwide Hospital, etc). I can definitely tell you there's still a lot of positive cash flowing and 1% rule deals and you get amazing appreciation. As an investor and agent here in Columbus Ohio, if you have any questions or want to connect, definitely reach out!

[G. Brian Davis]

Quote from @Sergio P Ramos:

@G. Brian Davis would ypi mind sharing your investment groups?

Hi Sergio, my partner and I oversee SparkRental's Co-Investing Club, but it's largely member-driven. We vet different deals together as a club every month.

[Aaron Cunningham]

I am selling a rental property in the Philadelphia Area for 150k.  We just renovated and rented unit for 1500 a month.  Let me know if you want more details.Zillow link

[Alan Asriants]

Real Estate is one of the only investments where spending more can actually be less risky. 

Investing 200k and looking for cash usually means investing in riskier areas (for most of the US). Make sure you visit the places you want to invest in and don't just trust an agent or wholesaler in the area. Not everyone is so honest. Many just want to make a buck, especially wholesalers who have timelines to meet. 

If you do decide to invest in a riskier area, don't expect to get the same returns you had on paper. Expect the risk...