Ready to buy first investment out of state

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Ready to buy first investment out of state

Madeleine Musante
Homeowner · Member since 2023 · 1 post · 6 votes

I'm a new investor; my husband and I are looking to buy our first investment property out of state (we own our primary residence in CA) and do a BRRR. We are looking for a single-family home in the $100-$150k range. I've been researching markets and Huntsville, AL looks promising. I'm also looking at the Columbia, SC area, but I am seeing that SC property taxes are quite high, which is deterring me. We are on the verge of reaching out to a realtor in the Huntsville area, but just want to see if anyone has any advice or insight into the current Huntsville market before we proceed.

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Min ZhangBusiness Member
Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
2y

Hi Madeleine, I suggest taking a look at this informative article about OOS (Out-of-State) investing, which emphasizes the significance of establishing your core team of professionals. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

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

As someone who invests locally in Columbus, Ohio, I'm more than happy to provide you with a list of contacts in Ohio that can assist you in assembling your property management team. Let me know how can I help!

[email protected]614-412-2912
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  • Simon Ashbaugh
    Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
    2y

    Hi Madeleine, first of all, welcome to BiggerPockets! While Huntsville has its merits, I'd also recommend exploring Cleveland and Columbus. In this price range, both cities offer a favorable price-to-rent ratio currently standing at 15:1. This suggests significant potential for rental income. Additionally, with local housing values appreciating by an average of 5.7% per year over the past five years, these markets show promise for favorable returns. It might be worth considering these options alongside Huntsville. All the best to your search!

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

    Hey Madeleine,

    Fellow Californian here that invests in the Midwest (specifically Detroit). I have 12-doors there. Cash flow is great and the city is going through major revitalization and investment that most folks haven't figured out yet.

    I know analyzing markets can be overwhelming but I'd highly recommend putting Detroit on your list of places to check out.

    0Reply
  • Sunil Kurian
    Investor · Bucks County, PA · Member since 2020 · 41 posts · 52 votes
    2y

    @Madeleine Musante

    You mention BRRR but I think there is alot of additional information needed that would be important in order to provide the best guidance here in terms of market.

    - what type of returns are you looking for? Is cash flow more important than appreciation.

    - what level of neighborhood would you be willing to take on? (A, B, C?)

    - what are your preferences in a property? (SFH vs condo, 1 BR vs 3 BR, sq footage, age, HOAs, etc?)

    - Are you willing to self manage the reno and property management or would you need help with those tasks?

    -What other externalities might you be personally wary of in a market? (Landlord tenant laws, geographical weather patterns, local economy, crime, etc)

    There are hundreds of metropolitan areas in the US and these are just some of the questions where the answers may sway the advice....

    One more point I'd add is that regardless of where you invest, familiarize yourself with the "seasoning requirements" around refinancing to pull your money out. If you are on an aggressive timeline to refi and purchase your next property but refi is your only source of investible capital...this could slow you down a bit.

    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y

    @Madeleine Musante 

    Check out the "Deep Dive" series here on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

    https://www.biggerpockets.com/member-blogs/3094/99854-deep-dive-into-metro-detroit-cities-ecorse 

    Our analysis is a template you can follow for any city, but doubt you'll find this much info for any other market in the US.

    Try finding similar info about any other market!

    So, how can we assist you further?

    Logical Property Management4.9457 Reviews
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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    2y
    Quote from @Simon Ashbaugh:

    Hi Madeleine, first of all, welcome to BiggerPockets! While Huntsville has its merits, I'd also recommend exploring Cleveland and Columbus. In this price range, both cities offer a favorable price-to-rent ratio currently standing at 15:1. This suggests significant potential for rental income. Additionally, with local housing values appreciating by an average of 5.7% per year over the past five years, these markets show promise for favorable returns. It might be worth considering these options alongside Huntsville. All the best to your search!


     If you end up looking at Cleveland you need to account for the risk profile of each of the neighborhoods. We get a lot of investors coming to Cleveland who have no idea why houses in 1 part of town sell for half of the ones in other parts. Do your research before you get burned. The Ultimate Guide to Grading Cleveland Neighborhoods should help you out with this.

    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    2y
    Quote from @Madeleine Musante:

    I'm a new investor; my husband and I are looking to buy our first investment property out of state (we own our primary residence in CA) and do a BRRR. We are looking for a single-family home in the $100-$150k range. I've been researching markets and Huntsville, AL looks promising. I'm also looking at the Columbia, SC area, but I am seeing that SC property taxes are quite high, which is deterring me. We are on the verge of reaching out to a realtor in the Huntsville area, but just want to see if anyone has any advice or insight into the current Huntsville market before we proceed.

    Hi Madeleine, I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!
    [email protected]614-300-7535
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  • Jay ThomasPro Member
    Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
    2y

    As a new investor exploring the BRRRR strategy in Huntsville, AL, there are key factors to consider. Huntsville's positive aspects include a robust economy driven by aerospace and defense, leading to steady job growth and high rental demand, especially for single-family homes. The market exhibits appreciation in property values, creating equity and potential profits upon resale. With favorable conditions for the BRRRR strategy, including relatively affordable housing and strong rental rates, Huntsville seems promising. However, challenges include increased competition, limited property inventory, and rising construction costs impacting overall BRRRR investments.
    While both markets offer potential, consider the following:
    Property taxes: Huntsville's property taxes are significantly lower than Columbia's, impacting your overall profitability.
    Rental rates: Rental rates are generally higher in Huntsville compared to Columbia.
    Appreciation: Huntsville's market is currently experiencing higher appreciation rates than Columbia.


    [email protected]832-889-5607
    0Reply
  • Jayson Cain
    Lender · Manhattan Beach, CA · Member since 2017 · 423 posts · 268 votes
    2y

    Hi @Madeleine Musante,

    I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals. I've started looking at Columbus because my business partners have found success doing Mid Term Rentals there and the returns are solid.

    I've also helped other investors with their DSCR loans and flip projects in Columbus. Happy to share my experiences and chat with you more if you're interested.

    0Reply
  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    Hi Madeleine, I suggest taking a look at this informative article about OOS (Out-of-State) investing, which emphasizes the significance of establishing your core team of professionals. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

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

    As someone who invests locally in Columbus, Ohio, I'm more than happy to provide you with a list of contacts in Ohio that can assist you in assembling your property management team. Let me know how can I help!

    [email protected]614-412-2912
    Reafco.512 Reviews
    View Page
    3Reply
  • Caleb Bryant
    Rental Property Investor · Huntsville, AL · Member since 2015 · 401 posts · 309 votes
    2y

    @Madeleine Musante going to be tough finding that price range in Huntsville right now but as far as a market I think it’s a good choice!

    0Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 679 votes
    2y
    Quote from @Madeleine Musante:

    I'm a new investor; my husband and I are looking to buy our first investment property out of state (we own our primary residence in CA) and do a BRRR. We are looking for a single-family home in the $100-$150k range. I've been researching markets and Huntsville, AL looks promising. I'm also looking at the Columbia, SC area, but I am seeing that SC property taxes are quite high, which is deterring me. We are on the verge of reaching out to a realtor in the Huntsville area, but just want to see if anyone has any advice or insight into the current Huntsville market before we proceed.


    Huntsville, great market! Worked on a handful of deals myself in that area this year. Want to make sure you get preapproved with a DSCR loan ahead of time to position yourselves when it comes to making offers on the fly!

    [email protected]860-538-3672
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  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 720 votes
    2y

    @Madeleine Musante Welcome to BP.  Have you thought about investing in the Reno Tahoe area.  We are seeing some good cash flowing properties with solid appreciation.  We are seeing tech job growth and many investors from California like that it's a short drive or flight away.  I'm happy to set you up with some resources in the Nevada area to begin investing. 

    0Reply
  • Mackaylee BeachPro Member
    Real Estate Agent · Kansas City, MO · Member since 2020 · 1k+ posts · 494 votes
    2y

    Kansas City boasts a fantastic selection of investment properties that can generate significant cash flow. If you're interested, I would love to connect with you, have a chat about the market, and share what's available in our inventory.

    [email protected]
    0Reply
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