Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
Currently, I have rental property in California, Colorado, Texas and Virginia. I am looking to buy another SFR or possibly duplex, and the main issue is monthly cash flow. What state or states seem to be the best for cash flow investing in 2009?
People like to be patronized, that's for sure. In another thread, Josh was talking about SmallerPockets.com. I think he should start that site and only allow GURU B.S. and "positive" responses.
Here's how it might go:
Newbie Question: I found a property in California that I think would make a great rental. In 2005, it sold for $575,000. I can get it for $485,000 and rent it for $900 per month. What do you think?
Guru response: That property has great potential. However, to make it cash flow, you'll need the SECRET to real estate investing and you're in luck. The SECRET to achieving MASSIVE SUCCESS with California rentals will be revealed in my upcoming bootcamp and for the next 2 1/2 minutes the cost is only $4,999! You will be rewarded with MASSIVE RICHES if you take MASSIVE ACTION and give us your credit card number RIGHT NOW!
MikeOH Response: Sorry to be blunt, but you are a freaking genius! Paying only $485,000 for a property that sold during the boom for $575,000 is the deal of the century!!! As they say in the shoe business: JUST DO IT! You da man! My advice is to buy a large box truck now -- you're going to need the space in that truck to haul your MASSIVE RICHES to the bank! And when you get back from the bank, the supermodels will be sitting by the pool at your new ocean-front mansion, waiting for their turn for a ride in your new yacht!
I'm in Josh! Where do I sign up for SmallerPockets? All that positive energy is making me SMILE! Just thinking about the positive energy has got me hyped up. Now I know that I can take my business to THE NEXT LEVEL! I might even skip a level and go to the level after that!
after reading this thread, I appreciate the fact that everyone is here to evaluate the situation to the best of their knowing, and that your willing to tell the truth from your perspective. I am happy to be apart of this community.
I don't have it listed currently, but did for $147,900. I have it rented above market but should be able to keep it that way due to it's unique location.
Please feel free to tell me if ya'll think this is a good deal or not. I took it off the market b/c I liked it as a long term investment, but my income has dropped a little in my current job and I could use the equity.
I've really enjoyed this thread. I wanted to post the same thing - I essentially did with my topic asking for rent-to-price ratio data across the country.
I appreciate what many have said about (1) the best place to do RE is where you live (2) there are deals wherever you are (3) it will be easiest and most effective in the long run to keep investment properties close by.
But like someone else said, what about if you live in CA? I am in San Francisco now. The best thing I've found so far is a gorgeous 2/1 TIC of 900 s.f. with parking for $429,000. That will command a rent of $1,800 a month. I've looked at triplexes and duplexes that start at $575,000, and they'd get $1,200 rent per unit. Really, there is just no way. I went to the county auction last week, and a great deal on a house worth $450,000 in Redwood City started at $57,000 and went for $319,999. I've found "cheap" condos in Milpitas, an area with excellent schools, for $190,000 that rent for $1,500 - problem is the $340 HOA and higher taxes. Suffice to say, I agree with the other post, it's darn near impossible right where I live. I saw the other post about going 100 miles away like Fresno or Stockton or Modesto and would consider it (details?).
I am pretty much a beginner, with just 6 properties, mostly in Charlotte. My take is, I'd rather, as the original poster asked and why I enjoyed reading this thread, find out where there is some consensus, or if not that, some strong indicators based on real numbers (pop growth, price-to-rent ratio, unemployment, etc.) that certain cities are good to look in. Because I'm for sure going to invest in 4 $50,000 houses that rent for $850 each before I shell out $200,000 for some condo in Milpitas that, while it's beautiful and will likely (but who knows?) a better long-term upside, is going to drag me down $200 a month. Those days are gone.
Let's put it this way - for those of you who live in OK or MS or LA or NC or IN and have read this post and said "just invest where you're at" - let's say you lived in Norcal and had to buy here. I'd love to see what you can find because I can't find anything under $400,000 to even think about within 50 miles of me.
So I'm already pretty ramped up in Charlotte - any other parts of the state to consider? Raleigh?
And when I started putting my own data together and seeing Cincy and Cleveland and St. Louis and Indy as possible, I was interested to see in this thread that Indy is a recurring idea. Then tonight I read this:
To the original poster of this thread, the good news is, you're already surrounded by opportunity in Dallas and that area. Thanks to everyone for contributing on this topic and keep the info rolling in.
I have lived in a lot of different places. Research Triangle in NC being one of them. I agree that you probably can't make the numbers work where you are. I would focus on one or two areas in one market.
Do your research before you decide which market. For example I am avoiding South and West Jackson for now. Why? b/c I want all my rentals in retail areas with current comps, so that I have an exit strategy if I need to liquidate. Parts of South Jackson are ok, but I am willing to sacrifice a little cash flow in order to be in a owner occupied market. The risk/reward is better, which I feel make the long term investment better.
depends on what state you want to be in and whether you want apartment buildings to rent or single family etc etc
I'm in MN and I have found 2 unit duplexes (with solid renters in the building already for positive cash flow) for around $120K (dirt cheap) Lakeshore is always a good deal too (since we have 10,000 lakes in MN) Makes great vacation rentals. Good Luck (IF you decide to purchase anything in MN please feel free to contact me)
One of the best places to invest in is without doubt New Zealand.
It is the only first world country where there is no capital gains tax, no stamp duty, very liberal depreciation and tax laws. The country is not only green & picturous but also free from crime and terrorism.
Best state to invest? The state of Israel of course... Growing population, shortage of land. How high can they go?... Oh and by the way, great internet service too... After all, Israel has the most start up companies in the world.
I am rather frustrated that people say cash flow is in all 50 states. My experience with my properties in Portland, Oregon is that my return is around 2 to 3% on a cash on cash basis. I bought these in 1991 with break-even at the time but can in no way buy stuff here with a loan and get decent returns because of high values. I am sure many cities have the same problem.
I'm surprised that no one has added Rochester,NY to this thread as a cash flowing mecca! You can find cap rates of 20%+ in the less desirable neighborhoods and 10% can certainly be had in the "better" areas. Houses for $50K that rent for 850/mo come fairly easy and even better deals are available! Watch out for our property taxes and closing costs, though...they will bite you! If anyone wants me to help you scope something out up here...I would be glad to.
This is an outdated article but the content is still applicable.
Florida may be getting close to bottom and time to buy.
A recent article showed FL RE sales in 2010 were up 29% for condos and 5% for homes. However prices were down 15% for condos and 4% for sfrs. This was an improvement over 2009 when prices for homes dropped 24% for homes and 34% for condos, in the SINGLE year. These #'s were furnished by Florida Association of Realtors.
A sobering bit of info from Moodys Analytics said home prices in Naples will not return to their pre-recession peak until 2038! This could lead to more "strategic foreclosures" by homeowners as this info becomes more widely known. It would also slow recovery, due to more inventory hitting the market, imo. Rich
I also like certain areas in Utah and will be visiting there next tuesday on a possible buying trip. Rich
Hey Mike, this will probably get to 100! Good luck on your trip Rich.
If I were traveling to other states for other reasons or built a portfolio to travel to as a recreational benefit, I can see going out of state.
I know there are some good deals in FL and NY, don't really want to go there and buying property you don't want to visit seems like asking for problems to me. Allowing someone else in some far away place to manage my assets and trust them not to rip me off isn't my idea of investing, more like gambling.
Someone like Rich who knows an area is different, I don't know the economic and social aspects of any town other than in my area, to the extent of making buy any decissions. Statistics don't drill down close enough to a property to base any purchase on IMO, at least at my comfort level. Each to his own I guess.
I agree that Florida would appear to look very good longer term, from these depressed levels. It'll remain a vacation and retiree destination, with strong future demand from the tidal wave of retiring baby boomers.
I agree David, FL is hot and will remain so, but anyone willing to address the profit potential of out of state properties by an individual investor and the risks involved?
Finance made good points. I've ALWAYS been willing to move to areas I wanted to invest in and organize a crew/group/mgmt on my own.
If you have that flexibility, it works well. I've been successful doing it in so. Utah, casa grande AZ, TX, and swfl.
You'll notice something interesting here, and not by accident. ALL these areas were sunny areas and as David posted, lots of interest in those areas for the foreseeable future. I rode the wave in so. Utah, got out before the bust and now going back for a second round. Rich
I gather you sell in these areas when you leave "got out before the bust." That is amazing.
When I saw Rochester New York's real estate for the first time I got excited. But I like to keep rent a little below market and keep tenants for a very long time. I noticed many properties (houses) renting for $500 and taxes of $2,000. It looked like you could pay cash and with just a few problems end up feeding it too.