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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  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    5y

    @Fernando E. Ohio in general is doing really well! Cash flow and appreciation has been happening in all three of the big C's (Columbus, Cincinnati, Cleveland).

    3Reply
  • Moises B.
    Investor · Bronxville, NY · Member since 2017 · 114 posts · 48 votes
    5y

    @David A. POA on a PMnger?? Why would anyone do that??

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    A lot of CA money is pouring into the midwest turnkey space right now; however, there are inventory issues with certain markets. 

    As a result, some investors have considered other asset classes. For instance, the self-storage and industrial spaces are doing quite well right now. Just a different perspective! 

    1Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    You need to pick and Niche and master that niche.

    It's a bidding war in most markets and a lot of buyers are not crushing numbers or looking for cash flow. 

    Narrow down your market to 3 and do extensive research on them.

    @Ali Boone has done a great job mentioning those cities. Start from there and follow your intuition.

    Goodluck

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  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Thanks @Lane Kawaoka! Great podcast bro - Simple Passive Cash Flow! 
    Originally posted by @Lane Kawaoka:

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

    0Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Great point, I appreciate it Robert! 

    Originally posted by @Robert Matelski:
    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.

    1Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Thanks Remington! I appreciate the input man

    Originally posted by @Remington Lyman:
    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.

    1Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Thanks Zeke, I appreciate it man! Seems like Ohio is really a popular place for cash flow. 

    Originally posted by @Zeke Liston:
    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! 

    1Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y

    Thanks @Gary Swank, I appreciate the input. I'll keep PA in mind in my search for OOS properties in addition to Ohio and Texas. Cheers! 

    1Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Thanks Zachary, first time hearing from a CA investor in a long while man, happy to hear that. Where do you invest? I live in the bay area, unless I house hack or put in a good down payment, it won't cash flow. Do you mind sharing locations where you invest?  Thanks man
    Originally posted by @Zachary Beach:

    @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
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Hey Brandon, still narrowing down my search with my partner, we have Ohio and Texas as top in our list. Great input from folks here in BP on other states we will consider. 

    Originally posted by @Brandon Leffler:

    @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.

    0Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Thanks Steven, great input! Cheers 
    Originally posted by @Steven Foster Wilson:

    @Fernando E. Ohio in general is doing really well! Cash flow and appreciation has been happening in all three of the big C's (Columbus, Cincinnati, Cleveland).

    0Reply
  • Fernando E.
    OP
    Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
    5y
    Hi Ola, 
    I appreciate the input, yes I've heard that as well from some TK providers that there is a small inventory.  Thanks 

    Originally posted by @Ola Dantis:

    A lot of CA money is pouring into the midwest turnkey space right now; however, there are inventory issues with certain markets. 

    As a result, some investors have considered other asset classes. For instance, the self-storage and industrial spaces are doing quite well right now. Just a different perspective! 

    0Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ 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. 

    I totally get it, and I think it's awesome. A lot of people want help with that. It may just get perceived as something different... to no fault of your own- people just know what the shills sound like because there have been plenty on here in the past, and many of them have been called out for it and shut down.

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    5y
    Originally posted by @Fernando E.:
    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.

    You bet! Good luck!

    0Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    5y
    Originally posted by @Robert Matelski:
    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.

    Uh oh, Aj. You sure you don't make anything? ;) Also, not sure if it's worth pointing out... many could argue this referral fee is illegal if you aren't a licensed real estate agent.
    3Reply
  • Zachary Beach
    Specialist · Los Angeles, CA · Member since 2018 · 291 posts · 231 votes
    5y

    @Fernando Enrile I invest in BIG bear California about an 100 miles from downtown LA and 150 miles from San Diego. Basically a different state from Northern California. It's a ski and lake town in the mountains with nature, hiking, mountain biking, fishing boating, rock climbing Etc. we where already doing extremely well but even better now. We have had super high inflation and even higher rent growth on properties that already had some of the best cashflow in the country. We have had over 20%CoC and 20% appreciation plus now markets rents are up 58% and my properties so far 2021 are up 63%. The inventory is almost to nothing because it's all being bought up super quickly. This time of year weekends are over a thousand dollars a night. I have been paid 1.9k for one night on Property I bought for 196K 2.5 years ago almost one percent rule for a day! They also still positively cashflow every month of the year with crazy numbers for winter and holidays seasons. We do a lot better than average about 2-3 times as much revenue as 50th percentile for comps because of our management including having the highest revenue of any property for 6 or less guest for the whole city.

    1Reply
  • Billy Bailey
    Member since 2019 · 6 posts · 0 votes
    5y

    @Zachary Beach, we live in Big Bear and are fixing up our home for STR. Would you mind telling us which management property you are using?

    0Reply
  • Zachary Beach
    Specialist · Los Angeles, CA · Member since 2018 · 291 posts · 231 votes
    5y

    @Billy Bailey my wife and I started our own management company because we were fair from impressed with the ones up here. We only did our own properties for the first two years but now offer our services to other people.

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    5y

    We've seen a lot of investors have success in Detroit.

    [email protected]248-209-6824
    Logical Property Management4.9462 Reviews
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  • Billy Bailey
    Member since 2019 · 6 posts · 0 votes
    5y

    @Zachary Beach, thank you for the info. ✌️

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

    @Samara Huntley thanks for the input, I’ll definitely add Charlotte, NC to my consideration. Cheers!

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

    @Remington Lyman thanks for the input, CORE 4 is key as David G. mentioned love his book 📚

    1Reply
  • David MansfieldPro Member
    Rental Property Investor · Lehi, UT · Member since 2018 · 3 posts · 3 votes
    5y

    Hi everyone, I've come here with the same questions. A little background, I'm from Lehi, UT which is right between SLC and Provo. It has become a pretty solid tech hub in its own right and the housing market has skyrocketed over the last 2-3 years. I'm interested in investing, but this area has become much more than I can afford. I'm looking for out-of-state areas that are affordable, will cash flow, and show good promise for job growth. In my own research, I've become about 90% settled on focusing on Columbus, OH. Nice to see some validation here. Having said that, are there any exceptional core 4 members anyone can recommend that I should be seeking out?

    0Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @David Mansfield I'm glad you landed on the Columbus market...it sounds like you have done your homework...a quick search of the SLC MF market suggests our market price points are about the same...the one difference in Columbus is there are still a multitude of neighborhoods in full transition that are still affordable...as long as you are OK with c-class assets, you can do very well here. The alternative is to expand to SFR investment and your horizon will open greatly. To give you a better idea:

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