What’s up all! I hope this post finds you all well and in good health! My name is Sean Michael and I’m a newbie, like really newbie. Im really interested in beginning my RE investment journey and living in CA it’s much more of a challenge out here, and I’m determined not to let a costly state to stop me. I do understand that investing out of state has its obstacles however it’s the way I’m going to get my foot in the door. Can anyone recommend what cities/states I should be looking into?
And if there is anyone who has experience investing out of state I would really appreciate any tips and advice that you would be willing to share!
Thank you all so much I really appreciate your insights and look forward to reading your responses.
So lots of these posts are just - hey come invest in my market. Nothing wrong with that but take any of that advice with a grain of salt.
I live in LA and I invest in Kansas City (and LA). I have lots of posts talking about it and I was on the BP podcast. I think it’s more important to get started then to do things perfectly. I picked KC by googling the top 10 markets for cash flow. I was in KC in June for 5 days and I never even drove by a single one of my properties. I did put 2 new ones under contract and scope out a few more potential new ones. I also closed on a refi and met with my local contacts/friends. Out of state investing in KC is great. I also invest in LA but the strategies are different. Just get going, you’ll be glad you did!
What’s up all! I hope this post finds you all well and in good health! My name is Sean Michael and I’m a newbie, like really newbie. Im really interested in beginning my RE investment journey and living in CA it’s much more of a challenge out here, and I’m determined not to let a costly state to stop me. I do understand that investing out of state has its obstacles however it’s the way I’m going to get my foot in the door. Can anyone recommend what cities/states I should be looking into?
And if there is anyone who has experience investing out of state I would really appreciate any tips and advice that you would be willing to share!
Thank you all so much I really appreciate your insights and look forward to reading your responses.
Sean Michael
I buy Turnkeys in Phoenix. Good cash flow, easy to get to and a reliable source. I'd look close by first. CA to AZ isn't far, and see if there is anything you like there.
@Sean Rice I would add OKC to your list. It's popular with OOS investors but doesn't feel flooded like other cash flowing markets where you have to get on a waiting list or just take what you can get. You can typically lock down 60-80k properties, utilize conventional lending and cash flow from day one! In C class areas you can easily snag those at 8% cap rates as long as you're working with a good provider.
Honestly in any market, your provider is going to be key. Research them, read reviews and talk to people that they've worked with before. There are deals everywhere, but your provider can make or break you!
Happy to answer any OOS investing or OKC specific questions. Good luck to you!!
What’s up all! I hope this post finds you all well and in good health! My name is Sean Michael and I’m a newbie, like really newbie. Im really interested in beginning my RE investment journey and living in CA it’s much more of a challenge out here, and I’m determined not to let a costly state to stop me. I do understand that investing out of state has its obstacles however it’s the way I’m going to get my foot in the door. Can anyone recommend what cities/states I should be looking into?
And if there is anyone who has experience investing out of state I would really appreciate any tips and advice that you would be willing to share!
Thank you all so much I really appreciate your insights and look forward to reading your responses.
Sean Michael
Start with reading David Greene's book on long distance investing. You need a local team that you can trust to get it done. Broker, property manager, local lender and insurance.
then consider markets in the Midwest like KC in which you can get 8-10% cash on cash year 1. If you need any help in Kansas City let me know.
@Sean Rice Hey Sean! Congrats on starting to invest!
I would love to talk to you about where I live and invest in. Evansville Indiana.
I used to live in Oceanside California and flipped a few homes there. While the returns were great, it was so hard to compete and coming up with the cash for even a down payment was rough!
I have since moved to and became a licensed agent in Evansville Indiana.
I am helping my in-laws from California (Cathedral city, next to Palm Springs) and a few others from California build their rental empire out here.
Houses range from $15k (no joke) up to million dollar houses here. I stick in the 50k-75k rental market a lot.
If you'd like to discuss more , shoot me a message :)
Hi Sean I live in Ontario and invest in the states. Have been investing in Ohio for 5 years now and have built great teams on the ground. The numbers are great in Ohio but the big secret to investing out of state is to have a great on the ground team working with you the best deal can go bad fast if you dont have a great team. more then willing to chat at any tie and share what I have learnt.
Hi @Sean Rice. Your post saved me having to create my own. I, too, am thinking of getting a property elsewhere. I'm also curious to hear how often the OOS investors actually visit their properties, if at all and how long did it take to vet your boots on the ground dream team?
Thank you all so much for the responses and insights! I’m really grateful for your replies and I can’t wait to learn more from each of you, much appreciated!
Hi Sean, welcome to BP. You'll find that this is a great resource. I'm from CA also so I'm fully aware how difficult it is, CA is a great appreciation market but the barriers to entry are too high for most people and if you're goal is cash flow, you really have no choice but to look elsewhere. I have a lot of experience with out of state investing. Feel free to reach out if I can help.
IMO before asking "where" ask yourself some other questions.
Important Questions You Should Be Asking Yourself (before investing):
1.How much funds do I have?
2.What’s the source of the funds?
3.Do I have money in my rainy-day fund?
4.How free/busy am I and do I want to be actively or passively involved?
5.Can I get a loan?
6.What am I trying to accomplish?
7.What are my concerns:
•Vacancy, mortgage, will it go up or down, will it rent, can I trust the property manager
8.Do I know how to analyze a deal?
9.Do I understand the risks that are involved?
10.Do I have exit strategy/ies?
11.Have I set my investment criteria (baseline)?
12.Am I a doer?
Will I be able to pull the trigger when the time is right?
I personally have invested in more than 45 US metros in the past 18 years. And you can find different types of opportunities in almost any metro.
But I can tell you few things:
I love PHX, invested there 2002-2008, 2010-2013. then stopped because I could get higher rent for the same price. Is it a bad market? not at all. Can you get better rents/cashflow these days? for sure. Again I LOVE metro PHX
Another example: I have been active in metro OKC since 2005. Stopped investing there in 2016. Why? not a bad market but it had pretty much-done nothing (or VERY little/much less than other metros during the same times) in 15 years price-wise. Bad metro? not at all! Can you do better? no guarantees but probably.
But it all comes done to what type of properties you are looking for and other factors.
There are opps in every metro, OKC and PHX included.
What’s up all! I hope this post finds you all well and in good health! My name is Sean Michael and I’m a newbie, like really newbie. Im really interested in beginning my RE investment journey and living in CA it’s much more of a challenge out here, and I’m determined not to let a costly state to stop me. I do understand that investing out of state has its obstacles however it’s the way I’m going to get my foot in the door. Can anyone recommend what cities/states I should be looking into?
And if there is anyone who has experience investing out of state I would really appreciate any tips and advice that you would be willing to share!
Thank you all so much I really appreciate your insights and look forward to reading your responses.
Sean Michael
Develop your core 4 team (Realtor, Property Manager, Contractor, and Lender). Then buying gets easy.
I'm starting to research the mid-west markets. I'm also thinking of Philly, since it's only 1.5 hours away from me. I've been in property management for 23 years and I have major control issues, so even though I plan to get a PM if I go mid-west, I will likely self-manage if I end up investing in Philly. Where do you currently invest Zeke?
@Sean Rice seems like you hAve made up your mind to invest OOS. I would highly recommend starting with your own home as your first purchase here in SoCal. Purchase a duplex to house hack with an fha loan. You will get a much bigger bang for your buck and you’ll have something to compare to in 5-10 years once you buy out of state to see if your OOS rentals outperform your local investment.
@John Farady I live in Phoenix and would love to keep it local. Would you mind sharing where you find your turnkey properties? Do they have CashFlow right off the bat?
@Kiera Underwood I was looking into Oklahoma. Do you do BRRRR out of state or other routes? How did you find a good provider? And, forgive my ignorance, what do you mean exactly by provider? Real estate agent? Any help and insight is appreciated.
@John Farady I live in Phoenix and would love to keep it local. Would you mind sharing where you find your turnkey properties? Do they have CashFlow right off the bat?
Sure, if you DM me I can give you what I know. Bigger Pockets doesn't like things like that posted in posts.
I think developing a team is very important. Another thing is managing expectations. Aligning yourself with others who can manage expectations is key as well. I would find an investors agent in your market. This is an agent with property management experience. Do not call a realtor and take the first person you get on the phone with. Vet them here. They should be able to get you realistic expense numbers. You should be able to start to analyze data but certain things have a tendency to be market specific. So to finalize tweak your numbers they should be able to help you with this. Since they are getting a commission they should be incentivized to help you. A good one will have a lot of contacts and know there capabilities from there experience with value adds. In general I recommend being at a point where you can go to the property atleast twice a week to manage a gc. To do this I recommend staying within a half days drive and be prepared to drive a little. The other option is to hire a third party project manager or pay for a larger more reputable contractor. Either way it will be more money. Turnkey or leaving an outdated place that way is another option. I recommend the latter in areas that are b grade at minimum. It will not be the cheapest but you should be able to cash flow and you might be able to manage remotely and have an agent lease it. Turnkey has a tendency to overcharge or worse yet lie about the state of the properties since they know the investors wont come to the property.
Getting a good investors agent and going for outdated but well functioning properties in B grade areas which can attract minimum B grade tenants might be the way to go.
Be careful with turnkey providers.
Hi @Giani Brussich! Great to see so many interested in RE investment. I'm personally more familiar with the market in MA, but have definitely seen a fair amount of people from the NY/NJ areas invest OOS in that market since properties have continued to rise in value, but it remains within reasonable distance from NY/NJ. If you think you'd be interested in MA, feel free to connect, and I'd be happy to share more of my experience / insights!
So lots of these posts are just - hey come invest in my market. Nothing wrong with that but take any of that advice with a grain of salt.
I live in LA and I invest in Kansas City (and LA). I have lots of posts talking about it and I was on the BP podcast. I think it’s more important to get started then to do things perfectly. I picked KC by googling the top 10 markets for cash flow. I was in KC in June for 5 days and I never even drove by a single one of my properties. I did put 2 new ones under contract and scope out a few more potential new ones. I also closed on a refi and met with my local contacts/friends. Out of state investing in KC is great. I also invest in LA but the strategies are different. Just get going, you’ll be glad you did!
@Lee Ripma thank you for your honest feedback I really appreciate that very much. I love that you suggested just get going because we can totally overthink things as humans and all of a sudden it seems too big and keeps us on the sidelines. I definitely plan on doing my DD and continue to build a solid foundation around my REI education. One thing I love about the BP podcast is the transparency of all of the guests and being able to learn from their mistakes. I definitely don't want to be over ambitious and get my REI journey off to a bad start. Again thank you for your honesty it's much appreciated
