Out of state market in 2021

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Out of state market in 2021

Fernando E.
Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes

Hi BP community,

I hope everyone’s having a great start of the year

Wanted to get your insights on what market will be cash flowing for either turnkey or SFR. My plan is to finance and put in 20% down, have the property managed by a property manager and I manage remotely from California. I paused on my real estate in 2020 and planning to make my moves in Q2, I'm in my recon and planning stage right now.

I also have a real estate group in FB focusing on the Cleveland market, amazing group but I also wanted to get other opinions for those who achieved some success in other areas. Thanks in advance.

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Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
5y

Unfortunately the real question of 2021 for turnkeys isn't which markets will cash flow, but which ones actually have inventory. Turnkey inventory is majorly strapped right now because of all the foreclosure moratoriums preventing access to foreclosures for the turnkey providers to fix up.

There are a lot of markets that can cash flow- Chicago, Cleveland, Kansas City, Indianapolis (although it's getting tighter there), Harrisburg, Birmingham, OKC, Memphis, Jacksonville, Baltimore... But some of those markets are mostly out of inventory (Chicago) or on wait lists (Baltimore) or selling out the minute the properties hit their email lists (Harrisburg, Cleveland, Indy, etc.)

Do you have any other criteria for a market other than whether or not it cash flows? What's your budget and/or preferences for a property? Can make some recommendations for markets that have TK providers with available inventory that fits. Or if you're waiting until Q2 to buy, I'd wait to know exactly who will have inventory then, because it's changing all the time right now.

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  • Ari Hadar
    Investor · Member since 2020 · 401 posts · 86 votes
    5y
    Originally posted by @Fernando E.:

    Hi BP community,

    I hope everyone’s having a great start of the year

    Wanted to get your insights on what market will be cash flowing for either turnkey or SFR. My plan is to finance and put in 20% down, have the property managed by a property manager and I manage remotely from California. I paused on my real estate in 2020 and planning to make my moves in Q2, I'm in my recon and planning stage right now.

    I also have a real estate group in FB focusing on the Cleveland market, amazing group but I also wanted to get other opinions for those who achieved some success in other areas. Thanks in advance.

    What do you mmean what market will cf? Probably b, c areas will cf and no so much A areas. 

    What is the wonderful FB group of Cleveland... I found one group with shaddy deals availavle... 

    1Reply
  • Saleh RiaziPro Member
    Investor · San Jose · Member since 2018 · 47 posts · 65 votes
    5y

    Hello Fernando, Welcome to BP. Being from CA, I also started looking out-of-state for investing and came across OH. Depending on your desired cash flow, I think Cleveland can be a pretty good market to start. 

    Good luck

    2Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y

    @Saleh Riazi thank you for the reply! I’ll re-connect with with cleveland contacts. I appreciate it man!

    0Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y

    @David A. Great point man, thank you! I've read David Greene's book 2 years ago and will need to revisit. I had a property manager there that was a good resource but no formal contract as I didn't have a property, my first 2 deal fell through after inspection, then COVID happen and I stopped REI. Thanks man!

    0Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y

    @Ari Hadar thanks for the response, this closed FB group CLE out of state investor have some good investors and the group is run well by the admin. Violators not following guidelines are removed.

    0Reply
  • Joseph Schweizer
    Investor · Member since 2020 · 291 posts · 592 votes
    5y

    Hi @Fernando E.!

    As yourself and others have mentioned, Ohio has good potential for cash flow. Another to consider would be Kansas City, MO. I recently invested there myself (see post below) and I am able to cash flow.

    https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

    Best Wishes!

    4Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    Hi Fernando, 

    Most turnkey companies offer good COC returns with 20% down. I have connected with several investors from CA who have been looking to invest out of state because of the competitive and high price market. I recently closed on a turnkey in Cleveland, OH with Martel Turnkey. Let me know if you want to connect and chat about the purchase process.

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    5y

    Unfortunately the real question of 2021 for turnkeys isn't which markets will cash flow, but which ones actually have inventory. Turnkey inventory is majorly strapped right now because of all the foreclosure moratoriums preventing access to foreclosures for the turnkey providers to fix up.

    There are a lot of markets that can cash flow- Chicago, Cleveland, Kansas City, Indianapolis (although it's getting tighter there), Harrisburg, Birmingham, OKC, Memphis, Jacksonville, Baltimore... But some of those markets are mostly out of inventory (Chicago) or on wait lists (Baltimore) or selling out the minute the properties hit their email lists (Harrisburg, Cleveland, Indy, etc.)

    Do you have any other criteria for a market other than whether or not it cash flows? What's your budget and/or preferences for a property? Can make some recommendations for markets that have TK providers with available inventory that fits. Or if you're waiting until Q2 to buy, I'd wait to know exactly who will have inventory then, because it's changing all the time right now.

    7Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    5y
    Originally posted by @Aj Parikh:

    Hi Fernando, 

    Most turnkey companies offer good COC returns with 20% down. I have connected with several investors from CA who have been looking to invest out of state because of the competitive and high price market. I recently closed on a turnkey in Cleveland, OH with Martel Turnkey. Let me know if you want to connect and chat about the purchase process.

    I saw in another thread you rebutted someone who suggested you might be a shill. This kind of post would be why you might get accused of it... when you recommend a turnkey provider when recommendations for specific providers weren't asked for. :)

    2Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Hi Joseph,
    Thanks for reaching out, Congrats on the first investment very excited for you! I sent you a direct message. Happy to connect 😄
    Originally posted by @Joseph Schweizer:

    Hi @Fernando E.!

    As yourself and others have mentioned, Ohio has good potential for cash flow. Another to consider would be Kansas City, MO. I recently invested there myself (see post below) and I am able to cash flow.

    https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

    Best Wishes!

    0Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    @Ali Boone I am just trying to suggest turnkey providers that I have worked with. I have personally been able to help multiple investors by talking with them on the phone or walking them through my purchase process which has helped some. I don't get paid to promote any of these providers so I don't have any vested interest. Just trying to help out new investors if they are looking to buy turnkeys in the markets I bought in. 

    3Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    thanks Aj, I appreciate it man!
    Originally posted by @Aj Parikh:

    Hi Fernando, 

    Most turnkey companies offer good COC returns with 20% down. I have connected with several investors from CA who have been looking to invest out of state because of the competitive and high price market. I recently closed on a turnkey in Cleveland, OH with Martel Turnkey. Let me know if you want to connect and chat about the purchase process.

    1Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Thanks Ali, I appreciate it. We’re still in the recon phase with my partner and we’re  discussing our top priorities. Cheers! 

    Originally posted by @Ali Boone:

    Unfortunately the real question of 2021 for turnkeys isn't which markets will cash flow, but which ones actually have inventory. Turnkey inventory is majorly strapped right now because of all the foreclosure moratoriums preventing access to foreclosures for the turnkey providers to fix up.

    There are a lot of markets that can cash flow- Chicago, Cleveland, Kansas City, Indianapolis (although it's getting tighter there), Harrisburg, Birmingham, OKC, Memphis, Jacksonville, Baltimore... But some of those markets are mostly out of inventory (Chicago) or on wait lists (Baltimore) or selling out the minute the properties hit their email lists (Harrisburg, Cleveland, Indy, etc.)

    Do you have any other criteria for a market other than whether or not it cash flows? What's your budget and/or preferences for a property? Can make some recommendations for markets that have TK providers with available inventory that fits. Or if you're waiting until Q2 to buy, I'd wait to know exactly who will have inventory then, because it's changing all the time right now.

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    5y

    Good idea! That's the key take lazy equity and buy higher ROI.

    3Reply
  • Robert Matelski
    Rental Property Investor · Austin, TX · Member since 2018 · 214 posts · 270 votes
    5y
    Originally posted by @Aj Parikh:

    @Ali Boone I am just trying to suggest turnkey providers that I have worked with. I have personally been able to help multiple investors by talking with them on the phone or walking them through my purchase process which has helped some. I don't get paid to promote any of these providers so I don't have any vested interest. Just trying to help out new investors if they are looking to buy turnkeys in the markets I bought in. 

    But... that $500 referral bonus that Martel pays you (or anyone) who refers them a client who actually closes a deal makes posting about this over and over and over a potentially lucrative side hustle of sorts, no? I am on Martel's email dist list, though I have never bought a property from them (buying TK isn't my investment model, but I do like to keep tabs on all the players in the Cleveland market). Screenshot of what shows up repeatedly in their promotional emails below.

    @Ali Boone I think you might be onto something.

    5Reply
  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    @Robert Matelski True but what is wrong in recommending a turnkey provider that you have worked with. I have not got any referral bonus yet and I am willing to help out investors trying to buy a turnkey so I wouldn't say I am doing it just for that referral bonus. I purchased my turnkey in August of last year and its been 6 months since then that I have been trying to help out other investors. 

    0Reply
  • Robert Matelski
    Rental Property Investor · Austin, TX · Member since 2018 · 214 posts · 270 votes
    5y
    Originally posted by @Aj Parikh:

    @Robert Matelski True but what is wrong in recommending a turnkey provider that you have worked with. I have not got any referral bonus yet and I am willing to help out investors trying to buy a turnkey so I wouldn't say I am doing it just for that referral bonus. I purchased my turnkey in August of last year and its been 6 months since then that I have been trying to help out other investors. 

    Typically investors find it more useful when you give them specific details, useful info, context, etc. rather than simply pasting more or less the same short message over and over and over about how you bought a TK through Martel and they should inbox you to find out more. Just a thought, in the off chance you're truly interested in being helpful.

    6Reply
  • Claudio Salvatorelli
    San Diego, CA · Member since 2020 · 150 posts · 54 votes
    5y

    I know that the Cleveland market is great. If you are doing out of state and using Cali money plus using property management that's a great idea.

    Good luck,

    Claudio Salvatorelli

    1Reply
  • Samara HuntleyPro Member
    Investor · Charlotte, NC · Member since 2020 · 124 posts · 189 votes
    5y

    @Fernando Enrile have you checked out the submarkets of Charlotte, NC?

    With Charlottes steady population/job growth, home price appreciation and relative affordability it’s a solid market to invest in.

    Now, I'm not advising looking into SFH within Charlottes city limits as the rent markets have not came near to keeping up with the insane appreciation and cashflow is limited. However, in the submarkets of Charlotte, in Concord, Kannapolis, Gastonia, Matthews etc. there are constant opportunities for generously cash flowing turnkey SFH rentals.

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Fernando E.:

    Hi BP community,

    I hope everyone’s having a great start of the year

    Wanted to get your insights on what market will be cash flowing for either turnkey or SFR. My plan is to finance and put in 20% down, have the property managed by a property manager and I manage remotely from California. I paused on my real estate in 2020 and planning to make my moves in Q2, I'm in my recon and planning stage right now.

    I also have a real estate group in FB focusing on the Cleveland market, amazing group but I also wanted to get other opinions for those who achieved some success in other areas. Thanks in advance.

    It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s strategy for long-distance and made up of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to confidently invest in any market.

    As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    4Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Fernando E.:

    Hi BP community,

    I hope everyone’s having a great start of the year

    Wanted to get your insights on what market will be cash flowing for either turnkey or SFR. My plan is to finance and put in 20% down, have the property managed by a property manager and I manage remotely from California. I paused on my real estate in 2020 and planning to make my moves in Q2, I'm in my recon and planning stage right now.

    I also have a real estate group in FB focusing on the Cleveland market, amazing group but I also wanted to get other opinions for those who achieved some success in other areas. Thanks in advance.

     Hi Fernando, Cleveland is a great city for cashflow. I would also check out Columbus, OH. I would really focus on equipping the right team, this will be crucial for your success with out of state investing. Good luck! 

    3Reply
  • Gary Swank
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 822 posts · 255 votes
    5y

    @Fernando E. Hi Fernando, Many investors are interested in the greater Pittsburgh, PA area. I've especially had the pleasure of talking to Investors from California who say that Pittsburgh offers them a more conducive buy-in rather than other more saturated markets. They have had great success on finding those cash flow properties that also offer a strong return on their investments. I've lived here my whole life and have really seen this great city turn into a vibrant and thriving area that attracts people to live and/or invest here. But in order to invest here you really have to know the areas as properties prices and conditions change street by street and often on the same street. That's why if you consider Pittsburgh, get with someone who really knows the city well and can help you succeed. Best of luck to you. 

    2Reply
  • Zachary Beach
    Specialist · Los Angeles, CA · Member since 2018 · 291 posts · 231 votes
    5y

    @Fernando Enrile consider California we have some of the highest appreciation and total IRR rates in the world and with STR markets in California (if managed optimally the cashflow over  maintenance is better than any markets I have heard of.) be where people want to be not where they don't want to be. This has been a good year no doubt and not every year will be as high but my California properties have had over 100% return on equity in the last year and both rents and appreciation are still getting hotter. Rents are up 58% in my market and they were double digit cash-flowing properties before that.

    1Reply
  • Brandon Leffler
    Rental Property Investor · Stockton, CA · Member since 2020 · 35 posts · 22 votes
    5y

    @Fernando Enrile

    I’m in the same boat

    It’s a lot of information to soak up!

    Have you narrowed down the states you want to look into.

    1Reply
  • Gary Swank
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 822 posts · 255 votes
    5y

    Whatever market you do choose, You should make at least one personal visit to that area. 

    1Reply
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