OOS Investing from California - partner?

41 Replies

I've been antsy for months to get in on my first rental property. I have the savings to do so, but I live in the East Bay in California where rentals are through the roof and cash flow is almost nonexistent. 

I have a mentor (my grandpa) who lives north of Sacramento, and we have been scouring that area for buy and hold for cash flow for some time with no luck yet.

My mentor is older and while he has had out of state properties in the past, he is not familiar with the new OOS market and the modern day advantages technology offers for finding rentals. He thinks it's sketchy (which it can be!)

I've read David Greene's book on out of state RE investing and have been searching the MLS in markets like the Midwest, TX, and Ohio. I know about the system and team I need to create if I want to do this (agent, lender, property manager, etc.).

I would feel a whole lot more comfortable if I had an experienced OOS investing partner to help me through my first deal. I realize it's asking a lot, but I'm highly motivated, have the capital, time, and am ready now! If there is anyone out there who is willing to help in any way, that would be a godsend. If not, I understand.

Regardless, good luck to everyone in their RE journey!

Hey Kyle, 

I would be happy to help you if you decide to look towards the Oklahoma City market. I would definitely recommend you narrow down a few markets and then try to visit the city you are most interested in and meet some "boots on the ground" contacts. You can definitely do out of state investing without ever setting foot there, but I think it's helpful to get on the ground at least occasionally to get a feel for the areas you are looking at and make sure your "boots on the ground" people are leading you in the right direction. 

What kind of properties are you hoping to get into? Seems like you might be focusing on the more complicated ways of doing things...fixing up properties, etc. Maybe not, but sounds like you're thinking it will be more complicated than it has to be. 

You can make an OOS investment as easy or as complicated as possible. Turnkey being the easiest usually, rehabbing being the hardest. I'm in CA and I've always done turnkey just to keep it more simple and straightforward.

@Ali Boone

In the beginning I am definitely hoping to invest more in turnkey properties, or properties with minimal rehab work. I'm looking for buy and hold rentals that will cash flow in an area that will hopefully appreciate.

You've had success in OOS investing from CA using turnkey?

@Cassi Justiz

Yes, I have had another recommendation about the OKC market. It isn't one I have studied, but I'm going to now. I'm really interested in any market where buy and hold properties can cash flow with some appreciation over time. 

Also I understand visiting the area is important, but not necessary. This is why I was hoping to partner with someone who already has had success in the area and is knowledgeable about the market.

Originally posted by @Kyle Marek :

@Ali Boone

In the beginning I am definitely hoping to invest more in turnkey properties, or properties with minimal rehab work. I'm looking for buy and hold rentals that will cash flow in an area that will hopefully appreciate.

You've had success in OOS investing from CA using turnkey?

Yeah, that's mostly all I've done. I have a couple properties I didn't buy turnkey but everything else is. To each their own of course, and not everyone likes the turnkey idea, but it's worked great for me. It switches my "job" to be managing the manager, so to speak, rather than managing the property and the tenants. I still have to do due diligence and keep an eye out and occasionally make decisions, but it's really minimal time investment on my part. And there's very little I haven't been able to handle over the phone.

Hope that helps! Reach out anytime if I can be of any help.

@Kyle Marek , you can go a different route and do short term vacation rentals. They can be pretty easily self managed once you figure out a routine and there’s tons of info here to help. I’m about 30 miles south of you and I invest OOS in Hawaii vacation rentals and do quite well. However, this is an expensive market to get into. There are less expensive markets in TN and FL that also do quite well. If you have the time to put in some work your returns will be exponentially better. But don’t be fooled, you’re buying a part time job unless you manage it out.

@Mike V.

Mike, my DREAM is to own a vacation rental in Hawaii. I love Maui, go there to chill and surf and hang as often as I can. It is an expensive market though like you said, and probably not a great one for me to start in right now. That being said, I'd love to talk to you about your experience should I find myself ready to look there!

@Mike V. I should hit you up for coffee in a month or so. I live in San Jose and I’ve thought about Hawaii for VRBO but didn’t know if the numbers would work. But I keep seeing a few people who seem to be doing alright.

@Kyle Marek Did you get a deal done? I'm also in the East Bay. I've been trying to house hack a multifam for almost a year but haven't been able to get a deal done. Thinking about going OOS with a partner to split costs and risk.

Im in the East Bay and I invest in Cleveland. If you need an agent out there let me know 

Only if you're already pre-approved sir. There are way to many tire kickers that that reach out about Cleveland and over 90 percent don't do anything.....that includes the bigshots that claim they don't need a pre-approval because they are "supposedly" paying cash. 

No disrespect....just basing this on experience.

Originally posted by @Brian Garlington :

Only if you're already pre-approved sir. There are way to many tire kickers that that reach out about Cleveland and over 90 percent don't do anything.....that includes the bigshots that claim they don't need a pre-approval because they are "supposedly" paying cash. 

No disrespect....just basing this on experience.

Preach

 

@Kyle Marek   There are multifamily properties in the Modesto area that can still cash flow if you buy and manage them right.  I'm not selling anything, but feel free to dm if you're interested in hearing more.  I've got a property manager I'm super happy with I can refer to you as well if you're interested.