I'm Minyan from Southern California, new to BP. After reading some books (Poor day rich dad, The millionaire real estate investor, Long distance investing by David Greene), and listening to tons of BP podcasts, I'm ready to get started. So excited!! As my backyard is so hot and expensive, my plan is to look for out-of-state rental properties, which I can buy and hold. What are some of the good markets (cash flow + appreciation)? I searched the internet, cities from Florida (Orlando, Jacksonville) and Texas (Austin, San Antonio) come up a lot, along with some other cities. Can anyone share her/his experience of investing in these markets? Or re-direct me to the previous posts regarding this topic? I'm sure this is not a new topic. Thanks!!
Realtor · Flagstaff, AZ · Member since 2020 · 106 posts · 118 votes
6y
The market here in San Antonio is desirable for a few reasons. Just a little insight into the town here:
This has been traditionally a military town with a few major local basis within the city limits. We're home to the San Antonio Spurs NBA franchise (5 chips, don't hate), a great Mexican American culture with the old missions spread throughout the city (Remember The Alamo!!!), terrific food and night life, and really great outdoor things to do both within the city and just outside the city in neighboring towns. Like other major cities, there are a lot of opportunities for all types of investors but naturally you'll develop a sweet spot for yourself.
Some pockets of the city are more attractive to out of state buy and hold investors than others and I think it mostly breaks down to the same basic things. The out of state investors I work with typically try to avoid areas of town with subdivisions dominated by older homes. These homes, although can be bought on bigger discount in some cases, typically come with larger rehabs that out of state investors don't want to manage from so far away. The consensus for my out of state investors is to locate homes that are not as old and not in too bad of shape. I mostly deal in off-market distressed deals that need fixing up before making it a rental or selling so a key thing my out of state investors look for is having good teams in place to handle the rehab. Networking here on BP, on local GC Facebook boards, and with local pros to utilize their contacts are good ways to go about putting this side of your team together. Always do your diligence.
The competition for the turn-key, great location, good condition, 3 bed, 2 bath deal on discount here is too much for many of the out of state investors - they just don't have the ability to move fast enough. In some cases you'd have to buy sight unseen which without a team in place and a great amount of experience I would not recommend. Giving yourself the best competitive advantage by having your ducks in a row in advance of having deals pitched to you is a HUGE plus. This is likely the first step. Network with pros, property managers, contractors, agents, finance guys, etc etc. Pick their brains about areas, recent projects they've done, current rentals they own, and any bad experiences they've had in the past. A lot can be learned from others' mistakes.
Have a plan and share your plan with your team so that they can be on the same page with you as the right opportunities become available. If everyone in your team has an aligned interest in your investing success and the proper diligence is done, San Antonio can facilitate your goals both in the short-term and long-term. I'm sure as others will chime in you'll see similar ideas and other unique ideas. But it seems like you've done a lot of homework and I commend your drive to get going. Best of luck!
Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
6y
@Minyan He I can connect you with people that live in CA and that invest in OKC! I'm also happy to answer any questions on the market and what the process looks like. It's more of a safe cash flow market. I wouldn't invest here for appreciation, although there are some areas where you may see more of it! Taxes are low here and it's pretty easy to snag a good deal if you work with the right team.
Realtor · Flagstaff, AZ · Member since 2020 · 106 posts · 118 votes
6y
The market here in San Antonio is desirable for a few reasons. Just a little insight into the town here:
This has been traditionally a military town with a few major local basis within the city limits. We're home to the San Antonio Spurs NBA franchise (5 chips, don't hate), a great Mexican American culture with the old missions spread throughout the city (Remember The Alamo!!!), terrific food and night life, and really great outdoor things to do both within the city and just outside the city in neighboring towns. Like other major cities, there are a lot of opportunities for all types of investors but naturally you'll develop a sweet spot for yourself.
Some pockets of the city are more attractive to out of state buy and hold investors than others and I think it mostly breaks down to the same basic things. The out of state investors I work with typically try to avoid areas of town with subdivisions dominated by older homes. These homes, although can be bought on bigger discount in some cases, typically come with larger rehabs that out of state investors don't want to manage from so far away. The consensus for my out of state investors is to locate homes that are not as old and not in too bad of shape. I mostly deal in off-market distressed deals that need fixing up before making it a rental or selling so a key thing my out of state investors look for is having good teams in place to handle the rehab. Networking here on BP, on local GC Facebook boards, and with local pros to utilize their contacts are good ways to go about putting this side of your team together. Always do your diligence.
The competition for the turn-key, great location, good condition, 3 bed, 2 bath deal on discount here is too much for many of the out of state investors - they just don't have the ability to move fast enough. In some cases you'd have to buy sight unseen which without a team in place and a great amount of experience I would not recommend. Giving yourself the best competitive advantage by having your ducks in a row in advance of having deals pitched to you is a HUGE plus. This is likely the first step. Network with pros, property managers, contractors, agents, finance guys, etc etc. Pick their brains about areas, recent projects they've done, current rentals they own, and any bad experiences they've had in the past. A lot can be learned from others' mistakes.
Have a plan and share your plan with your team so that they can be on the same page with you as the right opportunities become available. If everyone in your team has an aligned interest in your investing success and the proper diligence is done, San Antonio can facilitate your goals both in the short-term and long-term. I'm sure as others will chime in you'll see similar ideas and other unique ideas. But it seems like you've done a lot of homework and I commend your drive to get going. Best of luck!
Realtor · Evansville, IN · Member since 2020 · 61 posts · 76 votes
6y
@Minyan He Hello Minyan! I am happy you are getting excited. REI is my favorite path to financial freedom!
I used to live and invest in southern California. But, as you know, the prices are through the roof and coming up with a 20% down payment there is sickening!
I have moved and invested in Evansville, Indiana. I work with many OOS investors and have helped them start their rental empire out here.
We are a city of 118k people across about 50 sq miles. The market I stick in is the 14k-75k rental market. ROI is on average 20-30% annual. And 20% here is less than Ive spent on a used car...
I'd love to talk to you more about Midwest investing if you want.
Columbus, OH · Member since 2019 · 78 posts · 66 votes
6y
@Minyan He
A lot of cities right now that offer cash flow and appreciation are hot. I would look into finding off market deals if you want to invest in these areas. Im in Columbus OH and have had some success with this.
