Investor · Massachussetts · Member since 2013 · 4 posts · 2 votes
Wrestling with this idea in my head. I've got around $100-150k to work with. In the area I'm in (eastern MA) that won't stretch past 1 deal. Would it be worth it to stretch my dollar and look outside my home state? I've run the number on a few multi family properties and the COC return is just barely better than what the stock market returns, historically. I am looking 3+ unit properties in the Worcester area at the moment.
I see a lot of coastal investors coming to OKC to stretch their buck. You could get 7 properties that cash flow as is with 150k here. We've got population growth, a lot of insulation to recession and obviously an approachable price point. Something to consider! Even if you're not looking at Oklahoma I'm happy to answer questions. Good luck!
This is always the first thing investors ask. Do I go somewhere with lower cost of living and get more bang for my buck, or do i invest near my house. It all comes down to your personal risk tolerance and trust of others. I have a condo in AZ that i havent seen in over 10 years, and it makes me a little money. Personally, I would like to 1031 it back to Worcester, MA where I work, but that has costs as well. There is a ton of stuff in Northeast CT with great returns which is still close to MA, and close to Worcester, but you need to figure out why you pick an area. Population Growth, Economic Viability, Historical Investment returns? what are you looking for most? Or is it just about the CAP Rate.
I see a lot of coastal investors coming to OKC to stretch their buck. You could get 7 properties that cash flow as is with 150k here. We've got population growth, a lot of insulation to recession and obviously an approachable price point. Something to consider! Even if you're not looking at Oklahoma I'm happy to answer questions. Good luck!
I live in California. That wasn’t the first question I had. My first question was “how can I get the most cashflow” ? Investing in California is mostly for appreciation and flips. I didn’t have the knowledge for a flip and appreciation doesn’t cashflow. This is why I looked elsewhere. I started investing in OKC. They have a lot of blue collar areas that cashflow nicely, areas that are for appreciation and the ability to flip. I liked it because it was all in one area and in my price range. I flew over there to meet some property managers and I found the perfect one “ Table Investments “ . I was worried about the management because I have a W-2 job. After meeting with them, I was confident I could invest there. They basically did everything from start to finish. All I did was tell them what I was looking for, they gave me options listing the cashflow for each, I pick out the property I wanted, paid the title company and a month later it was rented. They did everything. They updated weekly on repairs, documents, improvements. I would talk to them and see what they can offer, this way you can decide for yourself. It’s not for everyone. I bought all my properties sight unseen from them and it’s worked out nicely.
It isn't about the number of rentals, but how much it brings in and the quality. Some the less expensive places will have higher turn over and more problems (not always, but more often than not). Is the $100-150K your total amount or what you have in cash? How much will the bank lend you and can you split that money over a couple of good properties?
If you do choose to invest out of state make sure you are willing to put the time and effort into building an effective team in that area. Your financial wellbeing will be more connected to the actions of others as opposed to a local investment you can monitor yourself. Do your research on areas of interest then begin looking at real estate agents in the area as well as property managers. These will be your two most useful team members as you start out. If you feel comfortable with that then out of state investing may be something worth looking into.
I live in California. That wasn’t the first question I had. My first question was “how can I get the most cashflow” ? Investing in California is mostly for appreciation and flips. I didn’t have the knowledge for a flip and appreciation doesn’t cashflow. This is why I looked elsewhere. I started investing in OKC. They have a lot of blue collar areas that cashflow nicely, areas that are for appreciation and the ability to flip. I liked it because it was all in one area and in my price range. I flew over there to meet some property managers and I found the perfect one “ Table Investments “ . I was worried about the management because I have a W-2 job. After meeting with them, I was confident I could invest there. They basically did everything from start to finish. All I did was tell them what I was looking for, they gave me options listing the cashflow for each, I pick out the property I wanted, paid the title company and a month later it was rented. They did everything. They updated weekly on repairs, documents, improvements. I would talk to them and see what they can offer, this way you can decide for yourself. It’s not for everyone. I bought all my properties sight unseen from them and it’s worked out nicely.
@Joe S. Yeah, I’m starting out also. It was scary to buy the first one but I bought it sight unseen. I was only able to do this because of the “team” I had helping me. @Kiera Underwood walked through the whole process and basically took care of everything. After that it needed to get rented. They had a property management team they recommended and worked with regularly. It was easy, they scheduled everything and sent before and after photos. The “team” is what makes out of state so successful.
I worked with “T&J Property Management” on the first rental. After I got the second one, I moved to “ Table Investments Property Management “. The switch was mostly due to having both rentals under one management team. But having Table do the investing side, project management side and the property management side...really made things flow a lot easier.
Your COC return might be barely better than what you get in the market, but you're only considering one factor of your total returns from real estate investing. You also have appreciation, debt pay down, and tax benefits. These might easily double your overall return.
Investing out of state you’ll likely lose a lot of competitive advantages you have vs those who are investing out of state. I currently invest out of state, but had I chosen to invest locally I could have done things such as do some of the rehabs myself, find and hire my own subcontractors instead of using GCs, drive for dollars, connect with other local investors, etc. All of these things will enable you to find better deals and increase your returns.
I’d be more than happy to share my experience investing OOS. Feel free to reach out if you’d like to connect!
Wrestling with this idea in my head. I've got around $100-150k to work with. In the area I'm in (eastern MA) that won't stretch past 1 deal. Would it be worth it to stretch my dollar and look outside my home state? I've run the number on a few multi family properties and the COC return is just barely better than what the stock market returns, historically. I am looking 3+ unit properties in the Worcester area at the moment.
Come on down to Connecticut! You'll get a few properties for that money, and we're still local to you as opposed to traveling across the country. A lot of the MLS properties are still above the 1.3% rule down here. We're getting ready to list a 5 unit in East Hartford for 370K that generates $4,800 a month, not a bad day! Any questions just ask, I'm a licensed agent and property manager in both CT and MA.
@Nicholas Van Blarcom how's the research going? For more comparable numbers if you're talking cash on cash OKC is usually at 10-12% in C class areas. Those deals are 60-80k and have a tenant in place. No upgrade needs to happen up front so you cash flow from day one.