Real estate in California is expensive. Especially in the bay area. That's why I'm looking to buy out of state. I have around 50k to put down as a down payment on my first property. The problem is, I am inexperienced and lacking resources and support. I need guidance. That is how I found this website and why I am reaching out. I want a property that cashflows so I can start replacing my income. I think I want a multi-family property (Ive heard they cashflow well). Where can I find a property I can afford, in a good area, that cashflows nicely, and hopefully will appreciate in the next few years? Big thank you for any help.
I'd start by checking out @David Greene's book Long-Distance Real Estate Investing, in the bookstore. https://www.biggerpockets.com/... He's going to address many of your questions and walk you through the entire process.
I'm not sure of your financial situation but another possibility is investing in a syndication. I'm not as familiar with Brian Burke's book, The Hands-Off Investor, but I know it is about investing passively in syndications. https://www.biggerpockets.com/...
Another option is to search out turnkey providers. I know there are quite a few in the Midwest and Southeast that are active on podcasts and online. I haven't worked with any so would not be comfortable making any recommendations. I think there may be a forum here on BP that is geared toward turnkey investing so you could check the forums too.
I'd start by checking out @David Greene's book Long-Distance Real Estate Investing, in the bookstore. https://www.biggerpockets.com/... He's going to address many of your questions and walk you through the entire process.
I'm not sure of your financial situation but another possibility is investing in a syndication. I'm not as familiar with Brian Burke's book, The Hands-Off Investor, but I know it is about investing passively in syndications. https://www.biggerpockets.com/...
Another option is to search out turnkey providers. I know there are quite a few in the Midwest and Southeast that are active on podcasts and online. I haven't worked with any so would not be comfortable making any recommendations. I think there may be a forum here on BP that is geared toward turnkey investing so you could check the forums too.
@Bryan Malone"Where can I find a property I can afford, in a good area, that cashflows nicely, and hopefully will appreciate in the next few years?" When you figure that one out, definitely let me know - I think we're all searching for that answer! In all seriousness, listen to BP podcast #373, another California investor walks us through her trials and tribulations in investing out of state in Kansas City. Best of luck.
@Mack Benson thanks for the resources. I’ll start with the book for sure, and I’ll check out syndication and turkey options because I’ve never heard of those before.
Multifamily is a great source for cashflow. I think you have the right idea by looking outside of the bay area. Finding a good PM you can trust will be key for out of state investing. I invest in the Milwaukee market and it has been strong for cash flow.
Spend some time looking up what others have given you already and reading David’s book (although I never have). You can answer your questions as they come up and you don’t need all the answers to get started.
My standard advice is to buy a duplex that meets the 1% rule or close to it now with upside on the rents with renovation. Make sure there are not major rehab items on the first one-no overhaul of electrical, plumbing, or strctural. You can take on all of those things but it’s nice to just do minor repairs on the first one.
I don't love the turnkey model but a company out of KC has a nice twist doing something similar where they master lease SFH in nice areas from you for 3 years. They assist you in buying the properties.
Owning any property isn’t passive even with a property manager, so that is why syndication can be nice.
You’ve got a lot to wrap your head around but none of it is very complicated-you just have to learn enough to get started, you’ll learn a ton doing your first deal.
I’m in Cali also and every is crazy expensive. Twenty Nine Palms has a couple of triplex for a decent price. I’ve been looking in IN and IL and looks like there are some spots with good properties and at good prices. Best of luck finding your investment.
Bryan - you might consider an out of state joint venture. Partner up with someone who has access to an easier market than you're currently encountering.
@Bryan Malone - In a similar position in California too, looking in Michigan for out of state opportunities. I'd suggest diving in to education for a bit before making any decisions (although be careful of analysis paralysis!). BP podcast has tons of good content, as well as the bookstore here. Give the most recent podcast episode a listen. Convenient timing because it's a high level overview of a lot of this stuff.
Yes, that's the million dollar question every investor wants to know - not just newbies. So, you're on the right track by asking the right questions. There's just no single right answer. It really depends on many factors. A good place to start is with the BP Insights data. You can read through all the market review commentary and look at the spreadsheets the analysts at BP have put together. It's handy to have it all in one place.
Hey @Bryan Malone I bought my first house as a house hack, maybe instead of looking at it as just an income producing property, you could look at it as a house hack. (If you live in a house now) maybe you could sell that and then buy a duplex or triplex in California with all the equity that you had from your previous house.
Reach out to me and I can help you in the Lubbock, Texas Market. You have a lot to consider especially out of state and no matter where you end up investing you should vet the agent who ends up helping you and ensure they understand investment properties.
@Bryan Malone Recommendations are the best way to connect with a good PM. Interview a few different ones then make a decision. Make sure whichever one you go with has technology integrations that allow you to track data.
I recommend Cleveland if you’re looking for cash flow. 10-15% returns aren’t uncommon for turnkey and even higher if you’re rehabbing yourself. I’d be happy to recommend neighborhoods as well as a great contractor if you ever decide to invest in the west side
@Bryan Malone 50k is enough to get you 1 maybe 2 rentals. But if you decide to invest out of state, plan to buy multiple. If you're just going to buy one and be done with it, one turnover is going to wipe out most of your cashflow. This is why people like multifamily. Also, beware of sellers trying to sell you properties in low C/D class areas and marketing them as B class. Many of these deals looking amazing on paper, but rarely pan out in reality due to a poor quality area.
@Bryan Malone definitely check out David Greene's book on Long Distance investing as other have mentioned. My wife and I actually just started looking for our first BRRRR this past July. We came in with 30k initially, only had to bring 18k to the table after 20% down and closing costs with private lender. We kept our rehab to just under 12k, so finding something for 50k is definitely doable.
Main thing is, make sure you're educated in whatever strategy you choose and as David points out in his book, build a solid team. We found an awesome wholesaler who is also a good friend. He's helped me build out my team and manage rehab from out of state (our property is in Texas, we live in Seattle area). Because of him, we're actually getting into our 2nd BRRRR in a week or 2, which is a duplex. Because of his connections, we found a lender that will cover 100% of the property plus rehab up to 70% LTV, so we'll just have to pay closing costs out of pocket, which should only be $2,450 or something like that. We will have to pay for parts of the rehab out of pocket upfront, but will be reimbursed in draws and our estimated rehab is 9.5k on the low end and 15k on the high end.
Went a little off topic there, the main thing is, the deals are out there, you just have to make sure you're as educated as possible and that you start building relationships to form your team.
You've come to the right place, that's for sure! I found a few great article regarding out of state real estate investing that are right up your alley. This first article is about the best and worst states for flipping houses. The next article focuses on the best 3 states for LLCs. You should definitely do some research on LLCs and how they can help you with your real estate investing and protecting your RE assets. You will want to understand the different types of LLCs, specifically the difference between a Traditional LLC and a Series LLC for real estate investing. Finally, there are a number of legal issues that will come up with interstate investing. This article covers some of the legal issues that will come up.