Looking to buy my first investment property

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Looking to buy my first investment property

Megan Tyberg
Member since 2024 · 23 posts · 55 votes

I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
1y

When you say "open to investing anywhere that makes financial sense" you just invite everyone to pitch, especially when you also say you have 400k to burn so be careful. Anywhere that is high cash flow also means high cap ex and tougher tenant base for the most part so as a new investor, that's not going to be great. You have to do research yourself and consider where you want to invest, where you would want to go to see your properties. Right now, you are just saying - I have money and will throw it into real estate anywhere that someone says is good. You will get too many charlatans. Just mentioning Columbus is going to bring your DMs to the brink of melting down.

Ask yourself why real estate? Make a list of every place you have ever lived and where all of your best friends and family live and see if any of those markets overlap with "good" markets that you see on lists. Then you have a competitive advantage.

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  • Jaycee GreenePro Member
    Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 727 votes
    1y

    Hi @Megan Tyberg, welcome to the BP Forum! Assuming you look for a duplex, what is your price point and are you looking for turn-key properties or something along the lines of a "fixer upper"? Are you considering Section 8 or do you want to steer clear?

    [email protected]
    0Reply
  • Tim Ryan
    Investor / Mentor / Contractor · Arcadia, CA Buying Out of State · Member since 2015 · 654 posts · 622 votes
    1y

    This is not too big of an ask. There are markets around the country that provide both cash flow and appreciation. I agree with you that some markets have already had their day. Like Columbus. I say, if everyone is talking about it, it's probably too late.

    Be careful not to reject someone's advice in a city you haven't heard of much. Maybe it's early stages of a growth market. Waiting for everyone to be there, and saturate is too late.

    2Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    1y

    When you say "open to investing anywhere that makes financial sense" you just invite everyone to pitch, especially when you also say you have 400k to burn so be careful. Anywhere that is high cash flow also means high cap ex and tougher tenant base for the most part so as a new investor, that's not going to be great. You have to do research yourself and consider where you want to invest, where you would want to go to see your properties. Right now, you are just saying - I have money and will throw it into real estate anywhere that someone says is good. You will get too many charlatans. Just mentioning Columbus is going to bring your DMs to the brink of melting down.

    Ask yourself why real estate? Make a list of every place you have ever lived and where all of your best friends and family live and see if any of those markets overlap with "good" markets that you see on lists. Then you have a competitive advantage.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    13Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    1y
    Quote from @Megan Tyberg:

    I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

    I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 


     Lolo, you have an exciting problem on your hands! What to do with your money!? Depending on what strategy you want to use/stabilize with will help you decide on a market or maybe multiple. Best thing to do is pick a strategy and stick with it. Running through some dry scenarios with brokers and lenders would be a good way to get your feet wet. Best of luck!

    [email protected]860-538-3672
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    0Reply
  • Mike PaolucciBusiness Member
    Realtor · Columbus Cleveland Dayton, OH · Member since 2022 · 492 posts · 550 votes
    1y
    Quote from @Megan Tyberg:

    I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

    I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 

     Hey Lolo. As a CA native and former out of state investor I went through some similar issues back in 2021 when I got started. 

    Regarding the deals you see listed after 2 years, sometimes investors choose to take advantage of the appreciation they've gotten and move it elsewhere. I had a duplex in Hilltop that was doing well for me and sold it 2 years later to do my first 1031 into a Hilliard duplex because it was part of my investment strategy (invest in C class with a 2-5 year exit strategy and 1031 into a better asset class). Obviously I can't say for certain that's what happened with those specific properties but it's just a slightly different strategy. 

    If you're looking specifically for cashflow, then take a look at Dayton and Cleveland. Those markets are pretty good for that. 

    Happy to connect and share some additional experiences if that interests you. 

    [email protected]614-892-9184
    Reafco - Mike Paolucci 512 Reviews
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    2Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    1y
    Quote from @Mike Paolucci:
    Quote from @Megan Tyberg:

    I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

    I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 

     Hey Lolo. As a CA native and former out of state investor I went through some similar issues back in 2021 when I got started. 

    Regarding the deals you see listed after 2 years, sometimes investors choose to take advantage of the appreciation they've gotten and move it elsewhere. I had a duplex in Hilltop that was doing well for me and sold it 2 years later to do my first 1031 into a Hilliard duplex because it was part of my investment strategy (invest in C class with a 2-5 year exit strategy and 1031 into a better asset class). Obviously I can't say for certain that's what happened with those specific properties but it's just a slightly different strategy. 

    If you're looking specifically for cashflow, then take a look at Dayton and Cleveland. Those markets are pretty good for that. 

    Happy to connect and share some additional experiences if that interests you. 


     If you're gonna look at Cleveland, I'd say you wanna read The Ultimate Guide to Grading Cleveland Neighborhoods before making any buys. Lots of money made here, but lots of money also gets lost here by out of state investors who don't understand what it is that they are buying.

    2Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    When looking for cash flowing markets.. a lot of investors, including myself, are looking in cities like Cleveland.

    Cleveland currently has one of the lowest price/rent ratios in the Nation, with the average home price being $107k and the average rent being $1,416/Mo.

    When investing in high cash-flow markets, I always recommend working with an investor friendly agent so you're able to gain the right insight on the different areas and the risks involved.

    [email protected]614-662-1652
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    3Reply
  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y
    Quote from @Megan Tyberg:

    I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

    I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 


    Hey Lolo, 

    I would highly recommend looking into Cleveland and Dayton for investments that will cash-flow. I would love to see how we can help you build your CORE 4 in either of those cities if you're interested in them. Let me know how I can help

    [email protected]614-490-1163
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    3Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @Megan Tyberg

    i'd pick a market that's easy to get to, where you can be in person - perhaps (gulp) even in California.  "but California is too expensive," you might say.  you know what else is expensive?  buying something random out of state, and getting absolutely crushed by capex and turnovers.  see these threads and see what you think.

    https://www.biggerpockets.com/forums/12/topics/1215726-break...

    https://www.biggerpockets.com/forums/48/topics/1159104-overl...

    https://www.biggerpockets.com/forums/963/topics/1195280-expe...

    https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

    https://www.biggerpockets.com/forums/48/topics/1137397-balti...

    6Reply
  • Eric Gerakos
    Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
    1y
    Quote from @Nicholas L.:

    @Megan Tyberg

    i'd pick a market that's easy to get to, where you can be in person - perhaps (gulp) even in California.  "but California is too expensive," you might say.  you know what else is expensive?  buying something random out of state, and getting absolutely crushed by capex and turnovers.  see these threads and see what you think.

    https://www.biggerpockets.com/forums/12/topics/1215726-break...

    https://www.biggerpockets.com/forums/48/topics/1159104-overl...

    https://www.biggerpockets.com/forums/963/topics/1195280-expe...

    https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

    https://www.biggerpockets.com/forums/48/topics/1137397-balti...

    This....
    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    1y
    Quote from @Megan Tyberg:

    I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

    I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 


    Hi Lolo! Columbus has definitely gotten competitive, and you're right to be cautious about properties that are cycling back to market quickly. But we're still seeing solid opportunities here with good cash flow and appreciation potential. I own a 7-figure rental portfolio here myself. And when a property cycles back to the market, it's not always a red flag – sometimes it's just market dynamics at work. Happy to connect and answer any questions you may have.

    [email protected]614-300-7535
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    0Reply
  • Mike TerryPro Member
    Investor · Fort Myers, FL · Member since 2015 · 292 posts · 278 votes
    1y

    Great post and many of the responses are valuable here.  My two cents are with 400k,  pick a market and get started.  You will learn a ton with your first property.  All the theory and strategy on here can help prepare you but the best education is doing.  Depending on market, I would plan to invest 100k in a single family home, find a good property manager, realtor, attorney in compelling market and just start.  Our current economic conditions are challenging for cash flow in most markets, but I wouldn't let that stop me from diving in.  You must do to learn.  Best of luck.

    0Reply
  • Account Closed
    Realtor · Cleveland, OH · Member since 2023 · 340 posts · 215 votes
    1y

    Hi, yes Ohio is a good place to invest in real estate feel free to reach out if you have any questions. Thanks!

    0Reply
  • Todd Douglas
    Realtor · Detroit, MI · Member since 2017 · 184 posts · 33 votes
    1y

    Starting out I would suggest Detroit(metro area as well), I can help OR Cleveland. These are markets where in the event the first time doesn't go completely as planned, your lesson wouldn't cost you as much as most other markets. On the other hand, these both are markets that are growing steadily so once you improve the property the equity is there.

    0Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    1y
    Quote from @Megan Tyberg:

    I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

    I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 


    Hey Lolo, I am an REI agent in Cincinnati and NKY, just speaking from a point of your question from the market I am in, you can do both, and I recommend sticking with "better appreciating areas". The "high cash flow areas" you speak of are only good on paper, and while they can be if you play everything right and all goes well, I find that is harder than it seems. Short term, "higher cash flow properties/areas" will be better, but long term "better appreciating properties/areas" will yield a better return (in my experience). Cincinnati and Northern Ky have both and I would love to talk more about if this market fits you. Shoot me a message if you like!

    [email protected]859-443-4952
    Sam McCormack Realtor
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    0Reply
  • Paul Novak
    Rental Property Investor · WI · Member since 2023 · 192 posts · 144 votes
    1y
    Quote from @Megan Tyberg:

    I am looking to buy my first investment property, and my goal is to continue building this portfolio every year until I can live off my rental income entirely. I have about $400K to deploy, but would prefer to buy several duplexes rather than 1 more expensive building. I live in CA but am open to investing anywhere that makes financial sense. Cash flow is important of course, but so is appreciation, so I want to ensure I have a balance of both. Is it wise to buy some units with high cash flow and low appreciation, and others with lower cash flow but high appreciation to diversify my portfolio?  

    I was looking in Columbus OH but the market is so saturated and it's been difficult for me to find cash-flowing deals there. Any deal that I've found seems to have sold within the last 2 years, and its alarming as to why it's back on market again unless they have problems with the building and/or tenants. I'm open to all suggestions regarding different cities that meet my requirements and would love to chat with some realtors who have local experience working with investors. 


     Congrats on looking to get started.  I live in Sheboygan Falls Wisconsin and we have a good balance of cashflow and appreciation.  We are a community that has strong manufacturing which supports strong wage growth and jobs.  Our average home price is also only around $250K making it a very affordable market.

    I highly encourage you to get started as I love real estate but I caution you on moving too fast too quickly.  I would recommend getting a property and start building up your systems first before buying multiple properties.  The best way I have found to learn is to be in the game.  You will learn from the first time you purchase a property, market a property, vet tenants, raise rents, handle maintenance requests, etc...  I could see this being a bit overwhelming as a beginner with a bunch of units to manage on the top of trying to learn.

    0Reply
  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 713 votes
    1y

    @Megan Tyberg

    There are many places to invest and each area will have it's advantages and risks. Investing close to where you live and a place where you would want to live has advantages like being able to check on your property and meet with your team. Also consider your lifestyle and if you want to be traveling 3 days just to check to see if a water heater is installed correctly and your property manager is looking after your property. There are more factors than just pure cashflow and it seems like you are in a good position to be successful.  

    1Reply
  • Kevin L OwensPro Member
    New to Real Estate · Northeast, OH · Member since 2022 · 24 posts · 28 votes
    1y

    Have you thought your investment strategy through? Do you have a team together? Do you have the professionals you need to start an LLC, do the proper real estate/tax accounting, solid contractors to rehab or prepare the property, and a property manager to handle the day-to-day operations? With that, I can connect you to a great person familiar with Columbus and Cleveland. If interested in low-cost properties with above-average rents, I would recommend duplexes in Cleveland near the major hospitals and work with the gentleman I am referring to. It is critical to know the condition and rehab costs, but buying low and doing the deal in the purchase helps with overall costs as you enter the rehab phase. Use the tools in BiggerPockets or others like Rentometer.com and Deal.io. I have two properties in the inner ring suburb of Cleveland's east side, and they are going very nicely. All in on both properties is about $155K (cost + rehab) and rent is at $1,750/mth with an ARV appraisal at $210k.

    1Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    1y
    Quote from @Kevin L Owens:

    Have you thought your investment strategy through? Do you have a team together? Do you have the professionals you need to start an LLC, do the proper real estate/tax accounting, solid contractors to rehab or prepare the property, and a property manager to handle the day-to-day operations? With that, I can connect you to a great person familiar with Columbus and Cleveland. If interested in low-cost properties with above-average rents, I would recommend duplexes in Cleveland near the major hospitals and work with the gentleman I am referring to. It is critical to know the condition and rehab costs, but buying low and doing the deal in the purchase helps with overall costs as you enter the rehab phase. Use the tools in BiggerPockets or others like Rentometer.com and Deal.io. I have two properties in the inner ring suburb of Cleveland's east side, and they are going very nicely. All in on both properties is about $155K (cost + rehab) and rent is at $1,750/mth with an ARV appraisal at $210k.


     Go ahead and state who you're working with, this sounds eerily similar to something we've heard on this forums over & over.

    2Reply
  • Kevin L OwensPro Member
    New to Real Estate · Northeast, OH · Member since 2022 · 24 posts · 28 votes
    1y
    Quote from @V.G Jason:
    Quote from @Kevin L Owens:

    Have you thought your investment strategy through? Do you have a team together? Do you have the professionals you need to start an LLC, do the proper real estate/tax accounting, solid contractors to rehab or prepare the property, and a property manager to handle the day-to-day operations? With that, I can connect you to a great person familiar with Columbus and Cleveland. If interested in low-cost properties with above-average rents, I would recommend duplexes in Cleveland near the major hospitals and work with the gentleman I am referring to. It is critical to know the condition and rehab costs, but buying low and doing the deal in the purchase helps with overall costs as you enter the rehab phase. Use the tools in BiggerPockets or others like Rentometer.com and Deal.io. I have two properties in the inner ring suburb of Cleveland's east side, and they are going very nicely. All in on both properties is about $155K (cost + rehab) and rent is at $1,750/mth with an ARV appraisal at $210k.


     Go ahead and state who you're working with, this sounds eerily similar to something we've heard on this forums over & over.


    Josh Janus, since you asked.
    Yesterday I sent Josh the link to Lolo Druff's post and my reply so the two of them can connect privately.  Josh has been on BP and he was on a BP podcast.  That is how we met.  I work with other professionals he has referred me to that he has used or knows.  He is from Northeast Ohio, went to Central Ohio, and is back on the east side of Cleveland.  There is nothing eery about it.

    0Reply
  • Kevin L OwensPro Member
    New to Real Estate · Northeast, OH · Member since 2022 · 24 posts · 28 votes
    1y
    Quote from @V.G Jason:
    Quote from @Kevin L Owens:

    Have you thought your investment strategy through? Do you have a team together? Do you have the professionals you need to start an LLC, do the proper real estate/tax accounting, solid contractors to rehab or prepare the property, and a property manager to handle the day-to-day operations? With that, I can connect you to a great person familiar with Columbus and Cleveland. If interested in low-cost properties with above-average rents, I would recommend duplexes in Cleveland near the major hospitals and work with the gentleman I am referring to. It is critical to know the condition and rehab costs, but buying low and doing the deal in the purchase helps with overall costs as you enter the rehab phase. Use the tools in BiggerPockets or others like Rentometer.com and Deal.io. I have two properties in the inner ring suburb of Cleveland's east side, and they are going very nicely. All in on both properties is about $155K (cost + rehab) and rent is at $1,750/mth with an ARV appraisal at $210k.


     Go ahead and state who you're working with, this sounds eerily similar to something we've heard on this forums over & over.

    Below is Josh's link.  I was trying to show some class in connecting them together off of the thread.  With the link below, people on the forum will know I have integrity and trust.  https://www.biggerpockets.com/users/joshjanus

    Josh has been good to me, I was trying to pay it forward by connecting Lolo Druff to Josh.  One thing Josh taught me some time ago is to always have or return value to your team.  As an investor, and with others teaching and mentoring, a person in real estate should never leech off of a host. Instead, an individual should strive for self-growth and initiative and be aware of how they can add value to members of their team or those who have helped them. I have done this routinely with people like Josh in my real estate world.  I also have over-improved my properties for various reasons. I forgave a tenant of a certain circumstance, and I treat my contractor's crew to lunch when they are working on my property.

    In the future, show some professional courtesy and class by contacting a poster or BP directly if you think a post contains something "eerie" or nefarious.  My questions in my post are solid, my info about Cleveland is accurate based on Cleveland neighborhood grades and Cleveland health systems, and my property values are fact.  And Josh is real.  After a great 35 years in law enforcement in Northeast Ohio, I would not begin to be "eerie" through a single post on BP.  I noticed your double standard in your reply as you don't mention the thing that is "eerily similar to what we've heard...".  You questioned me on my contact; so to use your own words, "Go ahead and state "what is this thing you're referring to?  Trying to cast some undisclosed drama to elevate yourself over others in your reply to their post makes you look small. 

    2Reply
  • Julia Lyrberg
    Lender · TX · Member since 2024 · 308 posts · 196 votes
    1y

    Hi Lolo, Sounds like you’ve got a great plan in place. Balancing properties with strong cash flow and others with higher appreciation is a smart way to build a well-rounded portfolio. If the market feels too crowded, it might be worth exploring other areas where you can still find good deals. Connecting with local realtors who specialize in investment properties is a great move — they can help you spot opportunities before they hit the market.

    5Reply
  • Becca F.
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    Hi @Megan Tyberg,

     @Nicholas L. referenced my previous post about buying out of state - I've had mixed results in Indianapolis metro area, Class A (nice suburb, great schools) rental has done well but Class C has been a huge headache (repair costs, stolen AC unit, attempted break in). I'm deciding how long I should hold onto those properties and if the Class C will appreciate enough. My property tax increases have been 17% for both homes (no Proposition 13 like in CA with our max of 2% increase).  Also you'll need to winterize a vacant property in the Midwest. In contrast I can keep an eye on my Bay Area properties, try to do a minor repair myself, etc. 

    I'm going to offer a different perspective of looking more at the asset instead of cash flow on paper. With $400k you could invest in California. If you're in the Bay Area have you considered Sacramento? It's 2 hour drive. 

    I talk to lots of investors who buy locally as well as OOS. Some strategies to lessen the negative cash flow are: house hack and rent out the other unit as a mid-term rental (to traveling professionals or for people temporarily displaced because of insurance reasons like fire) or short-term rental (business or vacation). One of the smarter strategies I've seen recently is buying a single family with two levels and an ADU. The owner is living in the ADU and renting out both levels of the main house on AirBnb. They are usually fully booked - it's in San Francisco. For obvious reasons, STRs won't work in every market. Rent by the room for long term rentals is another strategy.

    With OOS, what about Nevada? If you're in SoCal you could almost drive to Vegas or if you're in the Bay Area drive to Reno. I'm looking at Nevada - property tax rates are low and there's lots of appreciation.

    I'd recommend attending local meetups so you can talk with investors who buy in CA as well as OOS and ask lots of questions. Good luck.

    3Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    1y

    @Megan Tyberg

    When investing in properties, I aim to balance high cash flow with appreciation potential in affordable, stable markets with strong rental demand. I’m exploring emerging areas like San Antonio, Houston, Austin and Dallas. To scale, I plan to build a reliable local team, leverage 25% down payments, and use strategies like HELOCs or cash-out refinancing for future acquisitions.

    Good luck!

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  • Jeff Roth
    Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 461 posts · 250 votes
    1y

    Hi Lolo in California.

    Great questions. You have $400K to invest and are thinking about duplexes out-of-state and Columbus, OH has been tough to find cashflowing deals.

    I think you are wise to be thinking about duplexes as they are more affordable and you should always, hopefully, have at least one tenant paying. Section 8 tenants are another way to secure rent payment with government backing.

    The Midwest is a solid market for rent growth, cashflow, and decent appreciation.

    Look at a market like Lansing, MI. You can get a duplex for around $150K or less. It is the state capital with lots of economic development driving job growth and demand for housing with a lower cost of living to keep maintenance costs down.

    To Your Success!

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