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Jared M Pilarski
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looking to buy first rental property out of state!

Jared M Pilarski
Posted Jan 23 2022, 17:42

Hello everyone! My wife and I are looking to start our real estate journey! Currently we live in Hawaii and I am an active duty Soldier, we have decided that investing in Hawaii is too much of a risk for us at the moment, but are looking at other markets that offer good value but also not a warzone. We would love to do multi family, but are also open to doing SFR as well. Our max price range is around 170k as we would have to put 20% down. Cash flow would be nice, but long term appreciation and with break even cash flow is even better! Any advice and leads are very much appreciated

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Dahlia Khalaf
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Dahlia Khalaf
Replied Jan 25 2022, 05:14

@Jared M Pilarski if you would like to know more about Tulsa OK we can totally get you a nice property in that 170k pricepoint that is turn key and will cash flow. Let me know if you would like to learn more.

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Clay Boykin
  • Real Estate Agent
  • Columbus, OH
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Clay Boykin
  • Real Estate Agent
  • Columbus, OH
Replied Jan 25 2022, 05:51

@Jared M Pilarski So there are multiple ways to go about investing OOS. First and foremost, you should have an idea on how you are going to finance/purchase said property. I recommend either purchasing something with LOC/HM/Cash, or if you can do delayed financing. As far as something around your said purchase price, I would also recommend Columbus, OH for a starter market/somewhere to plant your investment roots. The majority of sub-markets in Columbus favor the 1% rule if not super close. Feel free to reach out to me if you would want to learn more about this market. Either way, Happy Investing!!

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Patrick Bavaro
  • Fort Lauderdale, FL
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Patrick Bavaro
  • Fort Lauderdale, FL
Replied Jan 25 2022, 06:11

@Jared M Pilarski I was just in Hawaii not even a month ago. You have a nice duty station! Beats my duty at 29 Palms in California, lol. You definitely have options! I would recommend networking with one of the many turnkey companies that are here on BP. Many of them have an enormous amount of reviews that will help you find the right one. RentToRetirement is one of the ones I'd recommend as I've done business with them and have been extremely happy. It's a bit outside your price point, but as an example, right now I am building a new build 4/3 construction through RTR where my all in cost was around $270k financed, rents are estimated to be $2300/mo and post construction appraisals for this model are averaging $377k. My plan is to cash out refi this home once it's built, to pull my money back out to use it again. Good luck and feel free to reach out! 

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Michael Blum
  • North Carolina
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Michael Blum
  • North Carolina
Replied Jan 25 2022, 07:43

@Jared M Pilarski

Congrats on making the decision to jump! Wishing you the best. There is a lot of knowledge here. Take in all you can. In the end it’ll be your choice and don’t forget the most important thing: make your choice and pull the trigger.

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Henry Lazerow#1 Chicago Real Estate Forum Contributor
  • Real Estate Agent
  • Chicago, IL
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Henry Lazerow#1 Chicago Real Estate Forum Contributor
  • Real Estate Agent
  • Chicago, IL
Replied Jan 25 2022, 08:52

Use a VA loan and buy local. It's so easy to get ripped off when buying out of state and end up with a flop property especially at $170k budget you will be looking at junky properties. I have seen out of state work best with bigger deals for example 4 units, etc. where it's easier to afford a good manager/out of state maintainance.

FYI a lot of these rust belt midwest areas with "nice" properties at $170k used to be $80k a few years ago and still have the same low credit tenants as when they were half the price. A lot of these homes also have major settling which you can't see in the photos. 

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Laura Marks
  • Real Estate Broker
  • Independence, MO
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Laura Marks
  • Real Estate Broker
  • Independence, MO
Replied Jan 25 2022, 14:55
Originally posted by @Henry Lazerow:

Use a VA loan and buy local. It's so easy to get ripped off when buying out of state and end up with a flop property especially at $170k budget you will be looking at junky properties. I have seen out of state work best with bigger deals for example 4 units, etc. where it's easier to afford a good manager/out of state maintainance.

FYI a lot of these rust belt midwest areas with "nice" properties at $170k used to be $80k a few years ago and still have the same low credit tenants as when they were half the price. A lot of these homes also have major settling which you can't see in the photos. 

 I agree that it is easy to get ripped off, as an OOS investor UNLESS you have amazing boots on the ground. We have plenty of great properties in the KC area for 100k - 150k. You have to do inspections and check out the home thoroughly. Also, having a Realtor that actually rents the properties after purchase, is very helpful. It eliminates Realtors who have no skin in the game and will sell you anything. Low credit can be deceptive and there are lots of people that have good income with job history and landlord history but hang out in the 550. I was included in this category at one time, spending about 450k in rent in my lifetime, without a missed rent payment. Looking at the whole picture will find you qualified tenants. 

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Edward Vinnett
  • General Contractor
  • Destrehan, LA
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Edward Vinnett
  • General Contractor
  • Destrehan, LA
Replied Jan 25 2022, 19:58

@Randall Alan Thank you Randy, you never know who you are motivating!!!

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Nick Giulioni
  • Rental Property Investor
  • Fishers, IN
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Nick Giulioni
  • Rental Property Investor
  • Fishers, IN
Replied Jan 26 2022, 02:38

Hi Jared, welcome to the real estate industry! I'm from California but started my RE journey here in Indianapolis. Now, I have almost a hundred doors. I would love to share my experiences and chat with you more if you're interested.

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Seth Young
  • Specialist
  • Southlake, Tx
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Seth Young
  • Specialist
  • Southlake, Tx
Replied Jan 26 2022, 06:18

I have some experience with SFH in the Southern/Midwest states! However, prices are closer to 200k-300k because those homes typically attract better residents and have higher appreciation. Best of luck in all your investing!

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Lane Kawaoka
  • Rental Property Investor
  • Honolulu, HAWAII (HI)
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Lane Kawaoka
  • Rental Property Investor
  • Honolulu, HAWAII (HI)
Replied Jan 26 2022, 18:10

If your net worth is over 500k, I can't really find a good reason to buy a rental property. Especially with the recent run up in Residential pricing (due to low supply)... Commercial (apartments) is where its at. Ultimately its all about getting away from the "mom and pop" retail investor who are buying turnkeys right now.

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Gerald Amasol
  • New to Real Estate
  • Kapolei, HI
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Gerald Amasol
  • New to Real Estate
  • Kapolei, HI
Replied Jan 27 2022, 21:50
Originally posted by @Laura Marks:

Hi Jared! I'm currently working with investors in Hawaii. We've just begun but I recently advised them to back out of a home after the inspection. I am fiercely protective of my clients and I think that it helps that I start the process by being their Realtor. I don't want to help buy something that isn't going to do well as a rental. I know my market very well and I don't even have to run numbers anymore to tell you if it's a good deal. If you have any questions, please feel free to reach out.

I'm shamelessly asking for a plug @Gerald Amasol :)

Hey Jared.  Tropic Lightning!  Yeah, it’s hard out here if you don’t have a whole lot of up front cash.  It’s a highly appreciable market (regret selling my first two homes!) so you will definitely get your money back and then some in five years or so.

That being said, my wife and I have been working with Laura and yes, we backed out of a deal.  That was a week ago.  But today we’re starting to close in on another property and my wife and Laura are already working on a second one.  I really need to separate them lol.  So I +1 Laura for sure!  🤙🏽
 

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Todd Rasmussen
  • Rental Property Investor
  • La Verne, CA
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Todd Rasmussen
  • Rental Property Investor
  • La Verne, CA
Replied Jan 27 2022, 23:05
Originally posted by @Doug Spence:

@Randall Alan Isn't the PM cost only 10% of the gross revenue in your example? Not 1/3.

Whether you have a PM or not, you're still going to have to pay taxes, insurance, repairs, maintenance, and capex. I think $100 is a reasonable price to pay to be able to invest out of state when the alternative is not investing at all!

 10% of gross is a much bigger % of net. In that example given, you'd have $300 in cash flow self managing and $200 with a property manager, ergo 1/3 of cashflow.

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Laura Marks
  • Real Estate Broker
  • Independence, MO
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Laura Marks
  • Real Estate Broker
  • Independence, MO
Replied Jan 28 2022, 03:03
Originally posted by @Gerald Amasol:
Originally posted by @Laura Marks:

Hi Jared! I'm currently working with investors in Hawaii. We've just begun but I recently advised them to back out of a home after the inspection. I am fiercely protective of my clients and I think that it helps that I start the process by being their Realtor. I don't want to help buy something that isn't going to do well as a rental. I know my market very well and I don't even have to run numbers anymore to tell you if it's a good deal. If you have any questions, please feel free to reach out.

I'm shamelessly asking for a plug @Gerald Amasol :)

Hey Jared.  Tropic Lightning!  Yeah, it’s hard out here if you don’t have a whole lot of up front cash.  It’s a highly appreciable market (regret selling my first two homes!) so you will definitely get your money back and then some in five years or so.

That being said, my wife and I have been working with Laura and yes, we backed out of a deal.  That was a week ago.  But today we’re starting to close in on another property and my wife and Laura are already working on a second one.  I really need to separate them lol.  So I +1 Laura for sure!  🤙🏽
 

@Gerald Amasol I appreciate you! Don't separate us, we're already planning our summer visits. Besides, she needs me to keep her grounded. :)

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Amy Shutes
  • Real Estate Agent
  • Charlotte, NC
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Amy Shutes
  • Real Estate Agent
  • Charlotte, NC
Replied Jan 28 2022, 11:18

@Doug Spence

Well said and sometimes PM companies are lower than 10%. They can be as low as 8%. Let me know if I can help in anyway.

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Replied Jan 30 2022, 17:24
I'm glad I came across this forum. So many valuable perspectives. Thanks everyone for sharing your experiences. My husband and I are new to investing and we are looking forward to learn as much as we can to get our first multi-family property.