Hi everyone! My husband and I are looking at buying our first investment property. We are trying to decide on trying to find a property in Southern CA/surrounding areas like Phoenix or Nevada or if we should look to invest long distance in Texas where our family lives. We don't have much cash, but we feel ready to jump into the game. Any advice would be greatly appreciated!
@Madison Guess depends on what strategy you are trying to pursue, what you define as SoCal and what kind of returns you are looking for.
@Aaron K. we are aiming to purchase a buy and hold rental possibly using the BRRRR method. We are in Northern San Diego county and would be willing to go anywhere within a five hour radius of us. As far as returns, we are looking at long term rental properties.
@Madison Guess I think Aaron was asking about the monetary return you’re trying to achieve.
Both Cali and Texas property taxes will hurt your bottom line. I'd choose Texas over California based on purchase prices and the landlord friendly it is. Will be hard to BRRR out of state. I live in NorCal and won't invest here, too hard to evict, tenants have too many rights here.
@Nic S. ah thank you. Do you invest in properties long distance that don’t need any renovations or just outside of California? We were also considering Arizona or Nevada since they are within driving distance.
@Madison Guess for buy and hold in state I'd probably do either the Inland Empire or North county. If you want to go out of state I'd expand beyond just the neighboring states because once you are driving 3+ hours it just isn't worth it to drive often enough for that to be a good criteria for purchase in my opinion. and yes as @Nic S. said I was referring to a rate of return of x%
Do you plan on renovating yourself or being the property manager? I have no interest in either so location doesn’t matter
I agree with others who have said that you should determine the rate of return you want. I don’t do work on the properies I own - I have contractors and PMs for that. Therefore, I do not need to drive to my properies, so they can be any market that I KNOW.
I think an out of state investment that is good to get started with when you have limited capital is a duplex in a B to C+ market in the Midwest. I invest in the Kansas City market where duplexes for 150k in these areas that gross 1600-1800/mo are plentiful.
Of course you have to determine what is right investment for you based on risk appetite and desired returns.
@Nic S. gotcha - just curious what other people were doing since you didn’t invest in California. This is kind of the hard part to figure out if we should be planning on doing our own renovations/hiring a PM/out of state. Little overwhelmed with where to begin to figure it out! Read a few books and love the rookie podcast, but we’re struggling with making the first move. And thanks @Aaron K. ! That’s helpful and makes sense if we’re driving that far anyway to consider other places besides neighboring.
Thanks @Lee Ripma ! That’s really helpful. When trying to find a good deal in a market that you’re aware of, but do not live in, how do you go about finding these off market deals? When listening to the podcast it seems like most everyone finds a deal that is a gem, but if you’re not connected in the market how do you find these kinds of deals? Or are these properties, like you mentioned in Kansas, found on Zillow/Redfin?