Invest in backyard(Socal) or go out of state?

Starting Out
2yFollow

Invest in backyard(Socal) or go out of state?

Alan Wedemeyer
Member since 2023 · 6 posts · 16 votes

My Wife and I would like to buy another property here in Ventura County CA near us but we are looking at 7-800K, maybe a little less if a fixer. Do we use all our cash to do something in our back yard which will appreciate well or do we start smaller out of state?

13Reply
198 views

Most Popular Reply

Austin McClainBusiness Member
Real Estate Agent · OH · Member since 2021 · 350 posts · 603 votes
2y

Ohio has done well for out-of-state investments. The prices are still pretty affordable and the state is predicted to grow. 

[email protected]614-710-4827
5Reply
See this reply in the discussion

43 Replies

Jump to latestLatest
  • Cole Sullivan
    Realtor · Sacramento CA · Member since 2023 · 16 posts · 7 votes
    2y

    Hey Alan! I'm a real estate agent and investor here in Sacramento with Hardin Realty and Property Management. We manage over 100+ STR/MTR (Sacramento, Phoenix/Scottsdale, Smokies TN). We have found the best of both worlds (cashflow and appreciation) here in CA with short term and mid term rentals. Would definitely recommend looking into it. Out of state, depending on where you buy, you are mostly looking at cash flow instead of appreciation. Feel free to reach out if you have any questions. Hope I helped!

    0Reply
  • Alan Wedemeyer
    OP
    Member since 2023 · 6 posts · 16 votes
    2y

    Hey Cole thx man! I’m an agent myself here in Vta County. You’re doing medium term and short term in Sac town? What are prices like up there? We are looking in South Carolina as we have a fellow investor there but just so far away. Much cheaper but won’t appreciate like here

    0Reply
  • Cole Sullivan
    Realtor · Sacramento CA · Member since 2023 · 16 posts · 7 votes
    2y

    Always good to look at all options! For an average home around 500k you are looking at around $3500-$4250 per month revenue in Sac. Depends on the property, amenities, and location.

    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    2y

    Alan, what are you trying to accomplish?

    Do you have a W2 you greatly enjoy and wish to stay at until you retire? If so, I like the Ventura County option.

    If not, and you want to work toward being more work optional, I'd say go out-of-state.

    I'm a bit north of you up here in SLO county. I invest in Detroit and have 12-doors there. We're also building an ADU and, once finished, our net rental income exceeds our monthly expenses.

    But I've never been one cut out for a W2, so...

    4Reply
  • Austin McClainBusiness Member
    Real Estate Agent · OH · Member since 2021 · 350 posts · 603 votes
    2y

    Ohio has done well for out-of-state investments. The prices are still pretty affordable and the state is predicted to grow. 

    [email protected]614-710-4827
    5Reply
  • Alan Wedemeyer
    OP
    Member since 2023 · 6 posts · 16 votes
    2y

    I’m a physical therapist but also have my brokers license   Would love to just do investing full time ! Goal is to get enough doors so that we can retire or at least not be dependent on our W2s anymore.  So trying to figure out the best path to that

    1Reply
  • Evan HoppleBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 285 posts · 420 votes
    2y

    @Alan Wedemeyer

    I invest in Columbus, OH. Taxes are low, and minimal landlord laws. Huge growth to come from recent additions to the tech sector (google, intel, amazon, honda, and many start ups). Columbus has a great mix of appreciation and cashflow

    [email protected]614-924-8151
    Reafco Real Estate
    View Page
    2Reply
  • Jake AndronicoBusiness Member
    Realtor · Reno, NV · Member since 2019 · 1k+ posts · 938 votes
    2y

    @Alan Wedemeyer

    My family and I have invested in Reno and in Santa Barbara (go Gauchos). 

    Being in your backyard has a lot of advantages. But, my family also bounces back and forth to Lake Tahoe so there's always an eye on things. 

    Is there anywhere that you guys consistently visit and/or like to be? 

    415-233-1796
    1Reply
  • Tony Clark
    Real Estate Agent · Ventura, CA · Member since 2020 · 340 posts · 166 votes
    2y

    Hey @Alan Wedemeyer, I probably don't have a popular opinion here but I live locally in Ventura County and sold our entire out of state portfolio to start investing locally. 

    I focus mostly on ADU conversions, which allow you to cashflow here and typically build in $70-$100k+ of equity for each deal. Because of that, I've been able to do less deals with bigger spreads and make the same returns I was seeing out of state.

    Sample deal I'm in the middle of the reno on in Ventura

    3/2 main house, 1/1 mother in law suite, and a 1/1 detached garage conversion

    Purchase: $925k ($1.1 all in after reno & ADU conversion)

    Reno: $80k for main house, $100k for ADU

    Rents: $4k/mo for the main house, $2.5k/mo for each of the ADUs. More if I choose to mid term rent them. So $9k/mo in total rents. 

    ARV is $1.35 mil


    SO I'll be able to build in about $200k of equity and then cashflow right around 10% cash-on-cash once it's all said and done. I do some flips out here as well and those are good to generate quick cash, but I think if you're considering investing locally the ADU route is the way to go (specifically converting existing garage space, ground up ADU construction is much more expensive).

    I saw a good candidate for this type of project on Avenida De Las Flores a couple days ago with a detached garage. Plenty of options out there if you're willing to get creative. 

    2Reply
  • Dan NelsonBusiness Member
    Real Estate Broker · Chicago and Kansas City · Member since 2016 · 113 posts · 104 votes
    2y

    While opinions on the "better" real estate market varies based on your preferences and investment goals, I think their are many markets that make more sense than SoCal.  For example Chicago - the market I am in -has more affordability compared to many areas in Southern California. The city's lower cost of living and real estate prices can provide investors with more accessible entry points and potentially better cash flow opportunities. The economy is extremely stable with diverse industries like finance, technology, and manufacturing and Unitrd Airlines and McDonalds.  SoCal has historical property appreciation and high demand for housing but much tougher laws and zero chance for cashflow.

     Chicago tends to offer affordability, geographical diversification, and potentially better cash flow opportunities due to its lower cost of living and real estate prices and rent control is illegal in Illinois. 

    I am focusing on Chicago because it is the area I represent and know the best but I prefer the fact that it has both cashflow potential and future appreciate at a much lower starting price.

    [email protected]773-295-1751Podcast Guest on Show 2 “Slam Dunk” Small Multifamily Deals in 2023 (and Where to Find Them)
    Dan Loves Houses4.981 Reviews
    WebsiteView Page
    0Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    2y
    Quote from @Evan Hopple:

    @Alan Wedemeyer

    I invest in Columbus, OH. Taxes are low, and minimal landlord laws. Huge growth to come from recent additions to the tech sector (google, intel, amazon, honda, and many start ups). Columbus has a great mix of appreciation and cashflow


     surprisingly taxes aren't low. check this out, but rent, appreciation, price per sq ft, general price, etc are over rides compared to this. anyone looking at just taxes is silly. ohio is one of the cheapest places on average in the whole nation. not by taxes though. source: 

    https://www.rocketmortgage.com/learn/property-taxes-by-state

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
    WebsiteView Page
    0Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    2y
    Quote from @Alan Wedemeyer:

    My Wife and I would like to buy another property here in Ventura County CA near us but we are looking at 7-800K, maybe a little less if a fixer. Do we use all our cash to do something in our back yard which will appreciate well or do we start smaller out of state?


     buy an apartment complex. 800k isn't a fixer in ohio 

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
    WebsiteView Page
    0Reply
  • Armando Carrera
    Member since 2023 · 85 posts · 51 votes
    2y

    Hi Alan 

    A native from Ventura myself, I invested in the Phoenix area. Even today with sky high home prices, you can buy two homes in AZ for the price of one in the 805. Rents average about 1900-2100 monthly. I think the advantage of having 2 properties is if an emergency comes up, selling one at 350k is easier than a 800k home while still keeping the other one. 
    I’m not a realtor, just your average joe trying to build generational wealth. Good luck!

    3Reply
  • Peter McKenziePro Member
    Property Manager · Ventura County, CA · Member since 2018 · 26 posts · 6 votes
    2y

    Alan,

    Would be happy to beat up this topic with you.  I have invested out of state and now invest in my backyard, which is Ventura County.  I own  a property management company here as well which gives me a unique perspective.  I had this same conversation with someone last week.  I feel strongly about investing where you live for a number of reasons.  This wasn't always the case but as time went on my opinion changed.  

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Alan Wedemeyer:

    My Wife and I would like to buy another property here in Ventura County CA near us but we are looking at 7-800K, maybe a little less if a fixer. Do we use all our cash to do something in our back yard which will appreciate well or do we start smaller out of state?


     So cal

    0Reply
  • Alan Wedemeyer
    OP
    Member since 2023 · 6 posts · 16 votes
    2y

    thank you everyone for all the valuable info! Ultimately We want to be able to retire and rely on our RE portfolio to live comfortably and long term obviously that is both cash flow and equity right. Trying to stay away from the short term space but very interested in the medium term and We are going to do that with our garage that WE are converting here at our residence. Back yard we cannot beat weather and beaches! And will always appreciate here but just wondering if We can get a better jump start out of state, do more with less to start

    @Tony Clark We are actually converting the garage in our current home to an ADU so I am definitely open to this idea as well but is taking forever to get it done here in Oxnard. What is typical turn around time for you? WHo do you have doing the work for you?

    @Peter McKenzie We love it here, born and raised but we might be able to get one property in  hopes that there would be enough forced equity to pick up another, etc etc  But open to any conversation that will help us

    2Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    2y
    Quote from @Alan Wedemeyer:

    My Wife and I would like to buy another property here in Ventura County CA near us but we are looking at 7-800K, maybe a little less if a fixer. Do we use all our cash to do something in our back yard which will appreciate well or do we start smaller out of state?

    Hey Alan, 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!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9122 Reviews
    WebsiteView Page
    0Reply
  • Alan Wedemeyer
    OP
    Member since 2023 · 6 posts · 16 votes
    2y

    @Jimmy Lieu Right on Jimmy! Will def keep that in mind.

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    2y
    Quote from @Alan Wedemeyer:

    My Wife and I would like to buy another property here in Ventura County CA near us but we are looking at 7-800K, maybe a little less if a fixer. Do we use all our cash to do something in our back yard which will appreciate well or do we start smaller out of state?


     I usually think people are better off investing close to home. BUT you live in that communist hell hole California so buying a rental property close to home is probably a bad move.

    1Reply
  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    2y

    I wonder how many people have made millions of dollars on real estate in CA compared to Ohio? 

    3Reply
  • Alan Wedemeyer
    OP
    Member since 2023 · 6 posts · 16 votes
    2y

    @James Wise aka Komifornia lol  I mean that's true in regards to more and more rental restrictions..They are passing an additional tax on STRs here in 25 I believe which may basically shut down STRs here...another 15% tax I believe..I would try to stay in medium term space if possible

    @Steve K. Gotta have lots of money here to make that money is the problem

    0Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
    2y
    Quote from @Alan Wedemeyer:

    My Wife and I would like to buy another property here in Ventura County CA near us but we are looking at 7-800K, maybe a little less if a fixer. Do we use all our cash to do something in our back yard which will appreciate well or do we start smaller out of state?


    I would recommend OOS. Seeing as landlord-tenant laws are much more tenant favored, unless you bought a while ago, I can't imagine a tenant (LTR or STR) being easily able to kill any profit you may have by taking advantage of those laws. But what do I know, I am not super knowledgable out west. But I am in Cincinnati and Northern Ky, which has seen a lot of growth and can't recommend enough

    [email protected]859-443-4952
    Sam McCormack Realtor
    View Page
    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Steve K.:

    I wonder how many people have made millions of dollars on real estate in CA compared to Ohio? 


     A lot …. Mine included, I would say almost everyone that purchased in 2009 at least would have 500 700k by now

    0Reply
  • Peter McKenziePro Member
    Property Manager · Ventura County, CA · Member since 2018 · 26 posts · 6 votes
    2y
    Quote from @Alan Wedemeyer:

    thank you everyone for all the valuable info! Ultimately We want to be able to retire and rely on our RE portfolio to live comfortably and long term obviously that is both cash flow and equity right. Trying to stay away from the short term space but very interested in the medium term and We are going to do that with our garage that WE are converting here at our residence. Back yard we cannot beat weather and beaches! And will always appreciate here but just wondering if We can get a better jump start out of state, do more with less to start

    @Tony Clark We are actually converting the garage in our current home to an ADU so I am definitely open to this idea as well but is taking forever to get it done here in Oxnard. What is typical turn around time for you? WHo do you have doing the work for you?

    @Peter McKenzie We love it here, born and raised but we might be able to get one property in  hopes that there would be enough forced equity to pick up another, etc etc  But open to any conversation that will help us

     I feel your pain.  Cash flow is hard to chase in our area.   Here is what we are doing to make it better.  Not quite short term rental level income but far better than traditional long term income.  Most professional management companies wont touch this with a ten foot pole.   Happy to connect if you want to discuss further. 

    0Reply
  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 720 votes
    2y
    Quote from @Alan Wedemeyer:

    thank you everyone for all the valuable info! Ultimately We want to be able to retire and rely on our RE portfolio to live comfortably and long term obviously that is both cash flow and equity right. Trying to stay away from the short term space but very interested in the medium term and We are going to do that with our garage that WE are converting here at our residence. Back yard we cannot beat weather and beaches! And will always appreciate here but just wondering if We can get a better jump start out of state, do more with less to start

    @Tony Clark We are actually converting the garage in our current home to an ADU so I am definitely open to this idea as well but is taking forever to get it done here in Oxnard. What is typical turn around time for you? WHo do you have doing the work for you?

    @Peter McKenzie We love it here, born and raised but we might be able to get one property in  hopes that there would be enough forced equity to pick up another, etc etc  But open to any conversation that will help us


    Hey Alan - I relocated a few years ago from SLO to Tahoe Reno and there is a great appreciation market and some cash flow properties especially in the MTR and some STR opportunities. I like to proximity to CA and family but all the advantages of Nevada. If you are thinking of house hacking there are some VA assumable loan options that pop up with low interest rates. Let's connect and I'd be happy to be a resource for you for the Reno Tahoe area.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free