Out of State Investing

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Out of State Investing

Vidal Gonzales
Member since 2022 · 7 posts · 14 votes

Hello Everyone,


I wanted to get some advice on investing out of state. I currently reside in California, and it is more costly for me to get started in my area. I am considering looking at properties in the Milwaukee market. Since I am new to real estate and looking to buy my first property, any advice and tips would be greatly appreciated. I look forward to seeing your responses.

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Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
4y

@Kit Elliott

I think there is some definite opportunity in Omaha, but this is not a market we've explored in great detail. Really, I can't a find any market that beats the overall cash flow, immediate equity & appreciation I see in many parts of FL. Especially with new construction. All of our projects in the $300k range for new build SFRs rent out at >$2,500 allowing for double digit ROI and have $50k to $150k of immediate equity we either sell for a gain or cash out refi to be net zero into the deal. This would be like a BRRR for new construction (build, rent, refinance, redo....retire)!

[email protected]800-311-6781Podcast Guest on Show How to Fund Real Estate Deals Right Now
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  • Ashley Nunez
    Real Estate Agent · Blue Springs, MO · Member since 2022 · 2 posts · 4 votes
    4y

    Kansas City area has a great market, strong population growth, affordable prices, and rising rents. I do real estate out here! Important to have a real estate agent familiar with the area you're investing in, that also has connections with vendors like property management, contractors, etc. When it comes to investing out of state biggest thing is connecting with local experts, building a team you trust for the area, understanding the market, and then start offering! 

    3Reply
  • Dallas Regimbal
    Real Estate Agent · OR · Member since 2021 · 34 posts · 27 votes
    4y

    @Vidal Gonzales It is important to remember when investing out of state to be sure you have a capable team of vetted people who are experts in the market and are familiar working with out of state investors. I would recommend building a relationship with a high quality real estate agent who specializes in investment properties, as well as an excellent property manager in the market you're interested in before seriously considering investing out of state.

    3Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    4y

    Cleveland still the best overall rental market in America, 10 years running. 25 30% net caps were to be had, now still 10%  as pricing has more then doubled or even tripled, 

    2Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    4y

    @Vidal Gonzales

    It's all about choosing the right location that meets your goals & working with the right team!  We live in Denver, but invest all across the country in areas that cash flow better, have lower price points to purchase & still have strong appreciation!  My recommendations to look at KC, Indy, OH, FL.

    [email protected]800-311-6781Podcast Guest on Show How to Fund Real Estate Deals Right Now
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    10Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @Vidal Gonzales:

    Hello Everyone,


    I wanted to get some advice on investing out of state. I currently reside in California, and it is more costly for me to get started in my area. I am considering looking at properties in the Milwaukee market. Since I am new to real estate and looking to buy my first property, any advice and tips would be greatly appreciated. I look forward to seeing your responses.


     What has made you choose Milwaukee? I over half of my clients here in Ohio are out-of-state investors and mostly from California. First and foremost, it is so important to get your core 4 https://www.biggerpockets.com/.... Start growing your network, look on Facebook/BiggerPockets for different events, find a mentor who is doing what you want to do, and get to know the local lenders/brokers. I think it is good to start analyzing deals and keep running numbers on properties. The more you do this you will know when you find a good deal and will ask fast to get it. I like to use this calculator https://www.calculator.net/ren.... 

    5Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Vidal Gonzales
    Find an agent here in the forums and use them to build your team. If they work with investors and own real estate, they should be able to help you find a PM, lender, and some contractors in that market which will make up your team or core 4 as David Green calls it. 

    [email protected]614-412-4565
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    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    4y
    Quote from @Vidal Gonzales:

    Hello Everyone,


    I wanted to get some advice on investing out of state. I currently reside in California, and it is more costly for me to get started in my area. I am considering looking at properties in the Milwaukee market. Since I am new to real estate and looking to buy my first property, any advice and tips would be greatly appreciated. I look forward to seeing your responses.


    It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s long-distance investing strategy and consists of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to invest in any market confidently.

    As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio. I am also looking to invest in Cincinnati and Cleveland.
    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    3Reply
  • Aaron Manship
    Flipper/Rehabber · Indianapolis, IN · Member since 2015 · 28 posts · 21 votes
    4y

    I own a construction management company and currently operate in Indianapolis and Louisville (and within the month Cincinnati) and specialize in working with remote/out of state investors.

    Until you have invested in an area long enough to build your own connections yourself I always suggest to just pay a little extra for a project management company to just have a little added peace of mind instead of just crossing your fingers and hoping your contractor is doing what they say. Eventually, hopefully you can build your team and have guys you trust and not need to use me or a group like mine any longer, but until then it is a good way to ease into remote investing instead of just jumping right into the deep end.

    Feel free to reach out, I am happy to answer any questions you may have!

    0Reply
  • Charles ClarkBusiness Member
    Real Estate Broker · Milwaukee, WI · Member since 2020 · 306 posts · 209 votes
    4y
    Quote from @Vidal Gonzales:

    Hello Everyone,


    I wanted to get some advice on investing out of state. I currently reside in California, and it is more costly for me to get started in my area. I am considering looking at properties in the Milwaukee market. Since I am new to real estate and looking to buy my first property, any advice and tips would be greatly appreciated. I look forward to seeing your responses.


    Bom dia, I hope all is well with you. Being in the Milwaukee market, I can share as someone currently investing here it is a good place to start. I purchase my first investment in 2019 by buying a four unit using a FHA loan. Since then my fiancé and I have scaled to 15 units in 3 years. We are house hacking a duplex and own a 8 unit and 5 unit buildings.

    The first step would be to reach out to either a real estate agent, property manager, and/or lender. The key to being a successful OOS investor is having boots on the ground and trusting someone to manage your affairs. Getting approved is the next step. Knowing what you can afford will make the process easier for the agent to find you a property. Third step is know your criteria for what is a good investment for you. Are you looking for $200/door or 15% COC ROI? Be able to explain to your team what is a good investment in your eyes so they can run the numbers on properties before they send them your way. Streamline and scale is my motto.

    If there's anything I can assist you with, please do not hesitate to contact me. 

    Beleza,

    Charles Anthony
      

    [email protected]414-719-6090
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    0Reply
  • Kevin Gregg
    Real Estate Agent · Waukesha, WI · Member since 2016 · 48 posts · 13 votes
    4y

    @Vidal Gonzales Milwaukee is a good place to invest. I am a Real Estate agent and have five duplexes in Milwaukee. I also work for a property manager and we handle 2,500 units in and around the city. I have several clients from California doing the same thing as you are looking at. Feel free to reach out. We are a one stop shop for out of state investors.

    0Reply
  • Jon Feldman
    Member since 2021 · 29 posts · 9 votes
    4y

    @Vidal Gonzales

    NEED GREAT MANAGEMENT COMPANY THAT'S IT

    IF YOU FO NOT HAVE A GREAT MANAGEMENT COMPANY

    DO NOT BUY OUT OF STATE

    2Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    Buy "Long-Distance Real Estate Investing" by David Greene in the bookstore. It explains the process in easy-to-understand terms.

    The DIY Landlord Book4.7248 Reviews
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    2Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    4y

    Milwaukee is often a bit misunderstood, people often think of it in a stereotypical way, while the differences between neighborhoods could not be greater: we have literally $5,000 houses a couple miles from $5,000,000 mansions. The big question is always where on this sliding scale do you want to invest. Best tip I can give you is book a flight and spend a weekend and drive through the metro area from east to west, you'll see a cross section. Plus MKE is a lot of fun in the summer. You can also look on YouTube. Milwaukee is also while lower priced than CA a lot more competitive than people expect, especially around the median price range multiple offers over asking are still the norm.

    0Reply
  • Mackaylee BeachPro Member
    Real Estate Agent · Kansas City, MO · Member since 2020 · 1k+ posts · 492 votes
    4y

    @Vidal Gonzales You'll be attracted to several midwest markets that offer lower entry points and positive cash flow.  I work in the Kansas City, Missouri market if you want to run some numbers here!  I usually have about 5-10 single family properties for sale at any given time.  With any market you choose, be sure to be diligent!  Always get your home inspection and secure reliable property management. 

    [email protected]
    0Reply
  • Porter Linton Anderson
    Real Estate Broker · Layton, UT · Member since 2019 · 18 posts · 11 votes
    4y

    There are a ton of markets that can get you what you are looking for but, building a team in the market you pick is the most important step for your growth by far. Be sure to really vet your potential agent and property managers is the best advice I can give for out of state investing.

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    4y

    @Vidal Gonzales find a market you can drive to.  Attend REIAs. Meet agents. Look at houses.  Network.

    0Reply
  • Ruchit Patel
    Bay area, CA · Member since 2021 · 383 posts · 306 votes
    4y

    I am also from California and I do out-of-state investing. If you want to connect and know my story, message me.

    --Ruchit

    0Reply
  • Scott AllenBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
    4y

    @Vidal Gonzales

    First identify your market, build your core four (Realtor, Property Manager, Contractor, and Lender), then start sending offers. Feel free to reach out if you have any other questions!

    [email protected]614-698-1227
    Reafco - Columbus, OH
    WebsiteView Page
    0Reply
  • Kit Elliott
    Real Estate Agent · Monterey, CA · Member since 2022 · 48 posts · 23 votes
    4y
    Quote from @Zach Lemaster:

    @Vidal Gonzales

    It's all about choosing the right location that meets your goals & working with the right team!  We live in Denver, but invest all across the country in areas that cash flow better, have lower price points to purchase & still have strong appreciation!  My recommendations to look at KC, Indy, OH, FL.

    @Zach Lemaster

    Hi Zach,

    What do you think of Omaha, NE? Some members in my REI Club brought that up recently and felt it was a solid market.

    0Reply
  • Luther Wilson IIIPro Member
    Real Estate Broker · Kansas City, MO · Member since 2017 · 535 posts · 292 votes
    4y

    Hey, @Vidal Gonzales, welcome aboard!  I second Kansas City all day.  Cheers!  

    0Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
    4y

    @Kit Elliott

    I think there is some definite opportunity in Omaha, but this is not a market we've explored in great detail. Really, I can't a find any market that beats the overall cash flow, immediate equity & appreciation I see in many parts of FL. Especially with new construction. All of our projects in the $300k range for new build SFRs rent out at >$2,500 allowing for double digit ROI and have $50k to $150k of immediate equity we either sell for a gain or cash out refi to be net zero into the deal. This would be like a BRRR for new construction (build, rent, refinance, redo....retire)!

    [email protected]800-311-6781Podcast Guest on Show How to Fund Real Estate Deals Right Now
    Rent To Retirement5334 Reviews
    WebsiteView Page
    11Reply
  • Ryan Cousins
    New to Real Estate · San Diego, CA · Member since 2020 · 34 posts · 27 votes
    4y

    @Vidal Gonzales welcome! I am based out of CA and invest mainly in Tennessee and Kentucky. Great cash flow, good appreciation, and easy to get a tenant. Happy to chat!

    0Reply
  • Rene G.
    Real Estate Coach · LandlordSkool.com · Member since 2017 · 109 posts · 88 votes
    4y

    Vidal,


    I say look at Florida! Whatever state, definitely consider if the state is landlord-friendly now, and whether or not it might trend away from being landlord-friendly in the future. 

    Also, most people will tell you that you need a property manager. That is NOT a requirement. I've been doing long-distance management for ten years, even while I've spent most of that time deployed to the Middle East. I developed self-service management along with other systems that grant me Real Freedom! If I can manage my rentals on the other side of the world, with crappy internet, in a backward timezone, then you can manage your rentals on the opposite coast. 

    Let's do this!

    Rene G

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    @Vidal Gonzales

    We think the Midwest is a GREAT place for OOS investors to consider!

    YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods: https://www.biggerpockets.com/...

    Your biggest question shouldn't be WHERE to invest, but HOW you will invest!

    Many OOS investors set themselves up for failure because they don't truly take the time to understand:

    1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

    2) The Class of the PROPERTY they are buying - which is relative to the overall area.

    3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

    4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

    5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

    6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

    7) That OOS property Class rankings are often different than the Class ranking of the local market they live.

    8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.

    9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.

    10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.

    11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
    ***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.

    https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799

    Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?

    Good luck with whatever you decide😊

    [email protected]248-209-6824
    Logical Property Management4.9450 Reviews
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    0Reply
  • Rebecca KnoxBusiness Member
    Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
    4y

    Hi Vidal, 

    I'd love to connect and see how we can help each other. My husband and I run several local real estate clubs--one for contractor networking and a private one for WI real estate investors. Reach out anytime. 

    Captain Save-A-Home LLC
    WebsiteView Page
    0Reply
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