Hello BP community. My name is Tanner. I am fairly new to RE investing, currently having no deals under my belt. I live in Corona, CA which isn't the most ideal market to purchase cash flowing properties. Since I am only 23, I don't have the proper financing for these 500, 600, 700, and 800k houses.
My main question is, knowing that there are much cheaper houses in the midwest and south eastern states that are more ideal for cash flow, what is your process for choosing an out-of-state market with 0 knowledge/experience of that market?
Thank you sooo much!
Zero knowledge of a market means zero success. You have to first decide what you want to do and what return makes it worth doing. Then decide how you sustain your cash flow from the property. Is it a long time rental play? Are you looking to sell it in a year or two? What's the exit? You will want a market that is not only "cheap" but will provide year-over-year rental price increases and/or property appreciation. Then look at states that you wouldn't mind visiting - because you will need to actually go there from time-to-time. Go online and gain knowledge on employers and growth in a market. And, when you've narrowed your search, find an investor-friendly realtor/broker in that market to add bench strength to your search. As a buyer, you don't pay commissions (and don't think the seller will lower the price if you don't use a realtor...in those cases, the seller's agent gets both sides of the commission).
The fastest way to do yourself wrong is this business is to be ignorant. You gotta know and you gotta know a lot. Do the work first. It's really hard to overcome stupid.
Hope this helps...
@Patricia Steiner this helps a ton. I am planning to buy and hold forever, and have heard time and time again that buying high quality properties and making them "tenant proof" is a must ensure the property lasts for decades to come. I appreciate the advice on looking at employers and market growth as well.
@Tanner Shore look for teams that have great reviews. Ask to talk to their past clients and look over past deals. If many people that work with them are telling you they're great, better chances you're in great hands! @Jose Pena and @Greg Ko were in similar shoes recently. Happy to answer any questions!
I was in the same boat as you a couple months ago. Being in Portland, I couldn't justify risking my life's savings on one deal. It was too much risk. This led to @Zach Lemaster over at Rent to Retirement. They provide turnkey ready rentals in markets that provide high cash flow and appreciation. The best part is that the properties are very affordable.
I recently just closed on my first property through them. You can find the details on my profile. What impressed me was the quality of rehab, return on investment and ease of closing. The experience from this has given me the confidence to venture into more active investments.
Feel free to PM me. I'm happy to answer any questions or elaborate.
@Joseph Crunkilton I definitely will be reaching out to you and looking more into Rent to Retirement. Thank you Joseph!
@Tanner Shore Piggybacking off of what everyone else has said, your local team is one of the most important things you need to put together. Once you figure out which area is a good fit for you to invest, find a local realtor who specializes in working with investors from out of state. If they’re a good agent, they will provide you a list of specific neighborhoods for investment properties, send you video walkthroughs and pictures of potential properties for you to acquire, put you in contact with property managers and contractors etc. The agent will put you in contact with the people they trust so they get your repeated business in the future. A lot of the “acquiring of a team” part of the process the agent can do themselves if you find the right one. Good luck!
Originally posted by @Tanner Shore :
@Ali Boone @Kiera Underwood Thanks for the great advice. I will definitely start reaching out to teams to start to narrow down that search to find my market. I also think that a turnkey property will be my best bet considering it will be not only my first OOS deal, but first deal in general.
They've definitely been my preference. Even after I got a lot of experience. If you need any help with it, reach out any time. I have a turnkeys Facebook group and the whole get-up. Side note- I volunteer at a prison in Corona! CIW- the women's prison. And my parents live in Redlands, so I'm through there quite a bit getting out there.
@Joseph Crunkilton Thank you for the shout out!
Please let me know if you have any questions on anything. I typically like to start with an initial phone call to discuss your investment goals/experiences, answer any questions you have, and tell you all about what our company has to offer. Please let me know if this is something you would like to schedule.
Also for your reference, here are some other forum discussions from investors that have worked with us in the past like Joseph. I'm sure you'll find this informative. Looking forward to hopefully connecting in the near future!