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1 rental per kid. That's my goal and i'm behind.  I have 50K at my disposal.  I live in Nor Cal but California seems utterly hopeless for my price range and cash flow ambitions.  Texas or Ohio seem promising.  Ideal find would be a duplex for 80K that rents out 800 per side.  Timing is another concern.  2020 has been a train wreck and i have heard of an increase in tenants not paying rent.  Interest rates are amazing but its not as amazing for investor loans.  With the second wave of Corona panic/shutdown this fall combined with the election season I feel utterly bamboozled as to if I should pull the trigger on something.  Any tips or advice from fellow investors would be greatly appreciated.

Zeke Liston · Answer

You won't be able to find the 2% rule in Columbus, OH but I would check out Cleveland or Dayton if you're after pure cash-flow. If you want appreciation to pay for your kid's college, Columbus would be a great market @Morgan Hill. You can also still have positive cash flow.

Check out the population growth differences...

Nicole Heasley Beitenman · Answer

If you invest in Cleveland, you can target areas around the clinic. Medical staff probably have no worries about losing their jobs right now.

Ryan Howell · Answer

This is that recession everyone who has been sitting on the sidelines, have been waiting for!

I haven't really had any impact in my rents.  I did have some extended vacancies that were ill timed.  While the news always pitches the extreme version of the situation, reality is, when I talk with other investors or listen to large property managers like Chris Clothier (recently on the podcast) the impact wasn't very large (~8% lost rent, I believe Chris stated on ~6000 units).

If your first deal is an $80k duplex, its a small enough deal you should be able to pay out of pocket and be okay.  Even if it was completely vacant for 12 months, it would be worth paying out of pocket for expenses for the experience you will learn.  Treat that as your education expense.

Mikael Winkler · Answer

@Morgan Hill I agree with the above regarding Columbus. While you may be able to find a crusher of a cashflow deal, they are becoming exceedingly rare. Could probably find them if you're direct marketing to owners, but in any other circumstance, listed or wholesaled property, you're probably closer to the 1% rule. That is still really good, though. And, Columbus is seeing some fantastic appreciation, like @Zeke Liston mentioned. Definitely an opportunity for both, with the right property.

Remington Lyman · Answer

Check out Columbus, Ohio.

It sounds like you have great goals! It also sounds like you are thinking about all of the reasons not to get started and none of the reasons to get started

Raul Velazquez Jr · Answer

@Trent Ecklar @Remington Lyman

Morgan Hill · Answer

@Mikael Winkler, @Remington Lyman, @Nicole Heasley, @Andrew Weiner, @Raul Velazquez Jr, @Zeke Liston, @Ryan Hill I appreciate all of your feedback.  I was surprised to find so much after getting home from work!  The example deal that I mentioned I was looking for was actually one that I found with a wholesaler in Columbus.  Regrettably I passed on it unsure if it was a real deal, Turns out it was!  I like Columbus in Ohio but have concidered cleveland...  Dayton has amazing deals but something has to be wrong there... One wholesaler offered me 5 properties/9 doors for 110K...  In texas I like san antonio but the market is a little rich for my blood.  Killeen and Waco, Texas are much better cash flowers but I'm figuring out the line of how getto do I want to go.  Getto = cashflow I have found and every investor has a line.  I have been looking for a property for 1.5 years.  I have read every book and listened to every podcast and I even became a realtor.  I need to pull the trigger on something but haven't found an exciting property recently.  Part of me wishes their was a cheap cashflow market closer to the west coast but all the good ones seem to be back east.

Ryan Hill · Answer

@Morgan Hill good question. I agree with you wholeheartedly in regards to your comment about investing outside of CA. Texas and Ohio both have some good rental markets, I know a few people who are investing there. Have you narrowed down your search at all as far as what cities in Texas and Ohio? In my honest opinion there is always going to be a reason you can come up with to not invest in real estate, same goes for the stock market. If you focus on long term goals (buying rentals) then I believe getting started as soon as you can will yield the best results as long as you are clear on the steps to take. I'd say you're more likely to fail and become discouraged because of a mistake you made because of a lack of understanding of the process, lack of due diligence/analysis on a property you purchase than going through an eviction or someone not paying for a month. Vacancy should be something you factor in when you're running your analysis. It will happen and it shouldn't be a surprise or completely take you out of the game.

How long have you been considering pulling the trigger?

Andrew Weiner · Answer

You can find a property in Cleveland that will meet your 2% goal but there will be greater costs to manage it and the property will not be in great shape.  As a local investor I stay away from this type of properties.

Jon Schwartz · Answer

@Morgan Hill, talk to @Remington Lyman about buying a duplex in Columbus, OH. Columbus is a great market right now (listen to the most recent interview episode of the Cash Flow Connections podcast for a lengthier explanation). Remington is legit the best out-of-state-investor-friendly agent I’ve ever encountered. I’m in Socal; if I were buying for cashflow, I’d be buying in Columbus with Remington.

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