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!
Pflugerville is a nice rental market. My property there has several applications as soon as we advertise it. One of my best friends rented there for years too. I think they city is strategically located for people working in North Austin (Round Rock?...Samsung?) to get to major employers like Dell. I tried to buy a property on Worley from a guy late last year...he didn't own it (nice!)...or I would have 2 units there.
Round Rock is really a nicer area of town and is positioned better in the path of the nice growth IMO. Our home in Round Rock is close to Cedar Park where they will be building the new Schlitterbahn....I would say you should check out that area of town some too.
Wow, I started this thread almost 2 years ago and it got active again. How markets do change, not only year over year, but month over month. I ended up adding Oklahoma and Arizona to my list last year. Rich mentioned Utah so I may have to look into that market this year.
I have been looking at Memphis but my wife is reluctant and I have read some negatives on that market.
Mike-went to Phoenix in 2009 looking at real estate and couldn't get a feel for it. The Realtor didn't help an out of state investor.
I called a property manager out of the phone book and asked him how the rental market was and he said he couldn't tell me because the Realtor would get mad.
How do you put all that together in a strange town? Are your places getting rented?
Jeff
Right now, all my places are rented. I am a numbers guy, not a visual type person. I don't need to look at a house or neighborhood. Most of that data can be researched on in the internet. I just want a newer house, one that pays a minimum of 1% rent (which gives me a 6% return with the 50% rule), in a nice middle class area. Appreciation is where your large chunks of money are made, but rent is your monthly cash flow. Paycheck vs. annuity.
Find a good property management company, one that manages no fewer than 1,000 units, and work with them. That is how I found my last 5 deals.
Mike
I too have a bunch of Fresno rentals and since I live in Northern Cal, have a bunch there. About 60+ SFH. I buy in groups of houses, usually on one parcel. These are not apartments. I learned this over the years from Fixer Jay DeCima. Jay and I now do seminars together, but Jay has actually been doing them for 25 years. It may be worth you while to check his web site [REMOVED] or see the facebook sites we are currently builiding, see [REMOVED], or [REMOVED] or our newest, under construction,[REMOVED]
My last piece of advice is to learn from those that have actually done what you are asking.
Thank you Dan, but actually, my Fresno rentals are going to be the first one's I get rid of when I start selling. I don't see appreciation there in my lifetime (at least 30 years) and the Fresno area has the highest hunger in the US with 27 percent of the folks there not having enough money for food sometime in 2010. It may be a good time to buy there, but I can't sell my Fresno houses for what I paid for them in the 1980s.
I still believe Texas and Oklahoma look to be the better markets today.
wow, i actually read through this whole thing..took me almost an hour, but boy, do we have some big personalities on this site??! i'm glad to see others have pushed charlotte...i'm cashflowing like a son of a gun out here...mike, i'm assuming the charlotte broker was the one i recommended, scott...did he help? if you-or anyone else- is interested in charlotte, i'd be more than happy to recommend an area, agent, whatever..i don't want your money, i'm just a nice southern guy!!
What I like about this thread is that it is a valid question at any time, no matter what market conditions exist. Instead of asking "what state", maybe I should have asked "what market" as each state has a plethora of markets.
Also, each investor has different criteria, flipping, cash flow, appreciation, etc...
I have learned so much from BP since my original post on this thread, so I just want to say THANK YOU.
Yeah...and it seems you are being treated much better now Mike. Hopefully new posters will continue to be treated well going forward. Some of the comments early in this thread are ridiculous.
Bryan- All posters, new and old, should be treated well here on BP. I would suggest that your previous sentence that " some of the comments early in this thread are ridiculous" , isn't the way you encourage members to post here, imo. Actually, that is what most posts on BP are, just an opinion. Posters shouldn't be ridiculed for their opinion, imo.
Better to all get along and let all posters feel they may have a comment or opinion without the criticism for it. Good idea? Rich.
Yeah….I think it is a great idea. I see people borderline attacked when they first start posting very often though. I understand being vigilant, but there is a line that get crossed often.
Wow, just read the first few posts. My mother was in the process of dying when I started this thread (she died less than a year after I started this thread) and I was a bit edgy. OK, I was REALLY edgy :oops:
So I am apologizing for my first few posts on this thread, especially to Karen.
MikeOH, haven't seen you for a while, but I am making a good income and am no where near financial ruin even though I am investing in 7 states.
Diversifying your Real Estate Investing is the best way to maximize your return AND minimize risk. Just ask those that put everything in Phoenix, So Cal or Las Vegas from 2004-2008. People who bought in those markets in 2001 and sold in 2007 think they are Real Estate Geniuses and started giving seminars.
As for treating posters right, that should go without being said. I probably didn't ask my question in my OP correctly and that is my fault. I have gained most of my knowledge on BP just reading other's posts, not having a specific question answered. Good, Average and Bad deals are available in any market/any place. As we on BP say, "You make your profit on the BUY, not on the SELL!"
I love TX investing. While the prop. taxes are higher, the rents to acquisitions make up for that and I feel TX is a great cash flow state. Not only that, TX has several cities that rank in the top 10 in the COUNTRY for growth!
Yes and the Texas property code is very landlord friendly :clap:
The best state is a state that you love living in! There are deals everywhere. I could go to just about any area of the country and inside of a couple of weeks have a deal goin. I would not get to wrapped up in being in multiple regions while you are just starting out. Pick a place you would love to be and start there.
If you could illustrate it in $ terms that would be greatly appreciated
Very simply put, if I pay $100,000 for a house, I want at least $1,000 rent. For instance, I bought a house in Crowley, Texas last year for $155,000 and it rents for $1,650 a month. The house already had tenant and management in place, and was only 5 years old (meaning less maintenance in the first few years)
Some investors on BP like to get 2% of the purchase price or ARV in rent, but most of them are purchasing homes under $100,000 and many are under $50,000. Several on BP have even talked about what sidearm they carry when they collect rent and that is not the type of rental I enjoy owning, even if it gives a higher return.
What I have found is that the best chance for appreciation is with homes that are newer and in better neighborhoods. You also have a higher class tenants in these areas.