Out of state investments

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Out of state investments

Gabriel Almendariz
La Puente, CA · Member since 2016 · 15 posts · 15 votes

Hello, 

I'm a brand new investor in CA.  I've realized i do not have the working capital to currently invest in CA, since all the hard money lenders I've talked with require 20-35% down with a new investor like myself.  That being said how do out of state investors go about choosing a market?  I've been looking into Dallas, Texas and Cleveland, Ohio.  I'd also like to know if out of state investors try to locate a property manager before acquiring deals or is that something you figure out as you go? Any insight you have will be helpful.

Thank you for your time,

Gabriel 

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Jeffrey Allen
Rental Property Investor · Cambridge, MA · Member since 2020 · 32 posts · 45 votes
5y

@Gabriel Almendariz

I invest in Ohio, primarily Columbus.  If I read your thread right, 15K isn't going to get you much if anything multifamily in Columbus either.  You might get into the Linden or Hiltop area, but you will need to make sure you have the right property manager that can support that type of tenant base.  I know of one if you're curious.

With that money, I'd look into Dayton/Toledo.  They aren't big cities and the population is declining but rental market is fairly solid.  You can get into an "ok" property with good cashflow that could set you up.  

Alternatively, you can partner with people dealing out of state that is in on the right deal.  It could enable you to leverage and build more equity faster with better appreciation while also delivering a solid cashflow.

Finally, I would recommend you see TONS of houses locally.  Know what to look for an be sure to ask your agent to take pictures and videos of the things you want to see.  If they miss something send them back.  Familiarize your self with the tenant laws in the state and some of the building code.

Happy hunting

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  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    5y
    Originally posted by @Gabriel Almendariz:

    Hello, 

    I'm a brand new investor in CA.  I've realized i do not have the working capital to currently invest in CA, since all the hard money lenders I've talked with require 20-35% down with a new investor like myself.  That being said how do out of state investors go about choosing a market?  I've been looking into Dallas, Texas and Cleveland, Ohio.  I'd also like to know if out of state investors try to locate a property manager before acquiring deals or is that something you figure out as you go? Any insight you have will be helpful.

    Thank you for your time,

    Gabriel 

    Are you looking at single family or multi? Seems like SFH is a hard row to hoe OOS IMO. I invested OOS in multi and working on automation for now. It seems to be working so far and the margins allow it more than SFH.

    0Reply
  • Ari Hadar
    Investor · Member since 2020 · 401 posts · 86 votes
    5y
    Originally posted by @Mike Reynolds:
    Originally posted by @Gabriel Almendariz:

    Hello, 

    I'm a brand new investor in CA.  I've realized i do not have the working capital to currently invest in CA, since all the hard money lenders I've talked with require 20-35% down with a new investor like myself.  That being said how do out of state investors go about choosing a market?  I've been looking into Dallas, Texas and Cleveland, Ohio.  I'd also like to know if out of state investors try to locate a property manager before acquiring deals or is that something you figure out as you go? Any insight you have will be helpful.

    Thank you for your time,

    Gabriel 

    Are you looking at single family or multi? Seems like SFH is a hard row to hoe OOS IMO. I invested OOS in multi and working on automation for now. It seems to be working so far and the margins allow it more than SFH.

    There are less options for mfh than sfr however 

    0Reply
  • Ari Hadar
    Investor · Member since 2020 · 401 posts · 86 votes
    5y
    Originally posted by @Gabriel Almendariz:

    Hello, 

    I'm a brand new investor in CA.  I've realized i do not have the working capital to currently invest in CA, since all the hard money lenders I've talked with require 20-35% down with a new investor like myself.  That being said how do out of state investors go about choosing a market?  I've been looking into Dallas, Texas and Cleveland, Ohio.  I'd also like to know if out of state investors try to locate a property manager before acquiring deals or is that something you figure out as you go? Any insight you have will be helpful.

    Thank you for your time,

    Gabriel 

     Start looking for mp and contractors just from start because they can help you find a house by giving you comps and rehab estimates that are essential to analyze deals. 

    1Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    I think a lot of it comes down to what your investing goals are and what the inventory of the city looks like compared to your goals. There are also some cities that are growing faster than others so that might affect your cash flow vs. appreciation outlook. @Gabriel Almendariz

    [email protected]614-963-3340
    1Reply
  • Gabriel Almendariz
    OP
    La Puente, CA · Member since 2016 · 15 posts · 15 votes
    5y

    Hi @Mike Reynolds 

    Most of what I’m looking at OOS is MF. What OOS markets are you invested in? Did you do brrr method on theses? Thank you. 

    0Reply
  • Gabriel Almendariz
    OP
    La Puente, CA · Member since 2016 · 15 posts · 15 votes
    5y

    @Brandon Goldsmith

    Brandon, most of what I see in Cleveland is MF. I haven’t really looked in Columbus is it the same?

    0Reply
  • Fernan Nava
    Rental Property Investor · Barstow, CA · Member since 2015 · 131 posts · 102 votes
    5y

    Hello Gabriel unless you go turnkey especially when just getting off the ground, I think it will be easier for you to invest locally. Find small towns out of suburbia, where prices are a fraction of the coastal areas. there are many towns where you can find good deals for way  under 100k. This price range makes it easier to put your down payment together so you can start investing.  Good luck to you

    2Reply
  • Alex Grosvenor
    Realtor · Dallas, TX · Member since 2020 · 146 posts · 148 votes
    5y

    @Gabriel Almendariz I agree with @Brandon Goldsmith a lot of what you’re asking about will be solved by narrowing down your criteria. Are you looking for cash flow or appreciation? How much money do you have to put down? Dallas isn’t as expensive as CA but ALOT more expensive than Ohio. SF or MF. If so how many units?

    What area you’re going to look in needs to be a main factor. You can’t be looking and learning about 3 different areas at one time; you will never get anywhere if you keep doing that. Focus on one thing. Get it going and become an expert at that one thing. Then move on to other states or different types of housing. 

    3Reply
  • Gabriel Almendariz
    OP
    La Puente, CA · Member since 2016 · 15 posts · 15 votes
    5y

    @Alex Grosvenor Thank you for reply.  I'm going to dive into the Ohio market since this market is more inline with what I can afford at this time.  I'm hoping I can achieve a good cash flow in MF in this area. I would have liked to invest in Dallas but being realistic the 15k down I have isn't going to get me very far in Dallas.

    2Reply
  • Gabriel Almendariz
    OP
    La Puente, CA · Member since 2016 · 15 posts · 15 votes
    5y

    @Fernan Nava thank you for your reply.  I've looked into these areas but I wasn't convinced i'd be able to occupy my investments.  I'd like to connect with you to discuss these markets.  

    3Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Gabriel Almendariz:

    @Alex Grosvenor Thank you for reply.  I'm going to dive into the Ohio market since this market is more inline with what I can afford at this time.  I'm hoping I can achieve a good cash flow in MF in this area. I would have liked to invest in Dallas but being realistic the 15k down I have isn't going to get me very far in Dallas.

     Ohio is a great market to get started in.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    0Reply
  • David Van Rixel
    Investor · Brookfield, WI · Member since 2017 · 7 posts · 2 votes
    5y

    @Gabriel Almendariz Would you be interested in investing in the Milwaukee, WI market?

    I'm an active investor here that could look for some properties for you and and potentially putting some of my rentals on the market.

    0Reply
  • Matt Santillanes
    Newport Beach, CA · Member since 2018 · 13 posts · 6 votes
    5y

    @Gabriel Almendariz

    Also in California and would like to connect and discuss with you.

    1Reply
  • Travis Frenchak
    Investor · Butler, PA · Member since 2014 · 130 posts · 114 votes
    5y

    You talk about hard money so I assume you want to brrr properties. Ive never done an out of state brrr but it could be difficult enough doing a local brrr. Good luck. 

    0Reply
  • Matt D.Pro Member
    Rental Property Investor · Chattanooga, TN · Member since 2016 · 15 posts · 9 votes
    5y

    @Gabriel Almendariz

    If you haven’t read Long-Distance Real Estate Investing by David Greene yet, I highly recommend it. Good luck!

    Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties https://www.amazon.com/dp/0997584750/ref=cm_sw_r_cp_api_glc_i_gpt6FbV5CGZJG

    4Reply
  • Gabriel Almendariz
    OP
    La Puente, CA · Member since 2016 · 15 posts · 15 votes
    5y

    @Matt D. I just ordered this book today. Are you involved in out of state?

    1Reply
  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    5y

    Definitely connect with a PM before buying an out of state deal.  You can start the deal search process simultaneously with finding a PM but the PM will be able to help a lot with local market knowledge.

    3Reply
  • Gabriel Almendariz
    OP
    La Puente, CA · Member since 2016 · 15 posts · 15 votes
    5y

    @Brock Mogensen thank you for your reply.  I'm going to start looking into PM in the area.  Are there any specific things I should look out for with PM?

    1Reply
  • Jeffrey Allen
    Rental Property Investor · Cambridge, MA · Member since 2020 · 32 posts · 45 votes
    5y

    @Gabriel Almendariz

    I invest in Ohio, primarily Columbus.  If I read your thread right, 15K isn't going to get you much if anything multifamily in Columbus either.  You might get into the Linden or Hiltop area, but you will need to make sure you have the right property manager that can support that type of tenant base.  I know of one if you're curious.

    With that money, I'd look into Dayton/Toledo.  They aren't big cities and the population is declining but rental market is fairly solid.  You can get into an "ok" property with good cashflow that could set you up.  

    Alternatively, you can partner with people dealing out of state that is in on the right deal.  It could enable you to leverage and build more equity faster with better appreciation while also delivering a solid cashflow.

    Finally, I would recommend you see TONS of houses locally.  Know what to look for an be sure to ask your agent to take pictures and videos of the things you want to see.  If they miss something send them back.  Familiarize your self with the tenant laws in the state and some of the building code.

    Happy hunting

    6Reply
  • Andrew Rosenberg
    Honolulu, HI · Member since 2020 · 196 posts · 190 votes
    5y

    @Gabriel Almendariz Definitely suggest you establish PM relationship. What an inspectors sees as fair as safety/repairs and what a PM sees as needing "sprucing" to optimize rent aren't necessarily the same. Like a bonehead I once bought a property in a tertiary market and struggled to find a PM, let alone a good one. Ended up selling and only made money, despite my rookie mistakes, because of luck/timing. Bought during the 2008/2009 market crash.

    3Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Jeffrey Allen:

    @Gabriel Almendariz

    I invest in Ohio, primarily Columbus.  If I read your thread right, 15K isn't going to get you much if anything multifamily in Columbus either.  You might get into the Linden or Hiltop area, but you will need to make sure you have the right property manager that can support that type of tenant base.  I know of one if you're curious.

    With that money, I'd look into Dayton/Toledo.  They aren't big cities and the population is declining but rental market is fairly solid.  You can get into an "ok" property with good cashflow that could set you up.  

    Alternatively, you can partner with people dealing out of state that is in on the right deal.  It could enable you to leverage and build more equity faster with better appreciation while also delivering a solid cashflow.

    Finally, I would recommend you see TONS of houses locally.  Know what to look for an be sure to ask your agent to take pictures and videos of the things you want to see.  If they miss something send them back.  Familiarize your self with the tenant laws in the state and some of the building code.

    Happy hunting

     Which parts of Columbus, Ohio do you invest in?

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    0Reply
  • Jared Lomker
    Rental Property Investor · Livermore, CA · Member since 2019 · 77 posts · 23 votes
    5y

    @Gabriel Almendariz

    Hi Gabriel I’m in the same bot as you. Finishing a Brrrr here in NorCal then I am going to begin long distance. I read David Greene’s long distance investing which was helpful. Talks about how to acquire your core four. Their is a podcast with Alex felice talking about this. We should connect and help each other out as we go.

    I’m currently networking in NC amd trying to focus down my searches.

    Good luck.

    2Reply
  • David NutakorPro Member
    Rental Property Investor · Palmdale, CA · Member since 2016 · 122 posts · 88 votes
    5y

    @Gabriel Almendariz, based on the amount of money you are starting with, l suggest you consider cities in Ohio as others recommended. Another city to consider is Kansas City in Missouri, which may even have a lower tax rate than cities in Ohio. I wish you good luck on your real estate journey.

    1Reply
  • Gabriel Almendariz
    OP
    La Puente, CA · Member since 2016 · 15 posts · 15 votes
    5y

    @Jeffrey Allen Thank you for your response. I'm looking into Dayton at this time, but its been hard for me to figure out ARV and the right price to pay. It seams like they are all over the place. Are you familiar with the Dayton area. It would be great if you can refer a PM in that area.

    How would you go about finding people to partner with on out of state deals?

    @Jeffrey Allen I really appreciate your detailed reply!

    0Reply
  • Shawn Bhatti
    Investor · Miami, FL · Member since 2020 · 80 posts · 66 votes
    5y

    I would read up on best ways to add value to a house and use an FHA 203k loan to buy a house-hack property. Then refinance to realize the added equity and obtain a HELOC to help you finance rehab costs on new BRRRR deals out of state. House hacking really is the best way to get started.

    0Reply
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