Cash flow properties

Starting Out
5yFollow

Cash flow properties

Puja Devi
Investor · Los Angeles, CA · Member since 2020 · 30 posts · 15 votes
Hi All - I have $50k to invest and looking for a cash flowing duplex or triplex. Should I invest in CA (Riverside & larger Inland Empire I hear has good tenant base) or out of state--Columbus, Indianapolis, Baltimore to name a few. I've spoken with a few agents and investors and can't seem to make up my mind. Would appreciate any tips on how to think through this. 
3Reply
50 views

Most Popular Reply

Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
5y

@Puja Devi

Out of state in the Midwest you’ll be able to find homes under $200k that make good investments that would be ok with the $50k you have for a down payment at 25% down.

The Columbus market is hot but it’s great for cash flow and appreciation. If you’re looking for no appreciation at all and the lowest possible prices I’d recommend other markets like Detroit, Dayton, Cleveland.

When investing out of state it’s important to have a strong local team of an agent, contractors, property managers, and lenders.

[email protected]614-363-2787
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
WebsiteView Page
2Reply
See this reply in the discussion

16 Replies

Jump to latestLatest
  • Seth Hochberg
    Member since 2020 · 120 posts · 135 votes
    5y

    Hi Puja, welcome to BP. I can only speak about Baltimore, that it is a strong cash-flowing market, but somewhat risky if you've never stepped foot in Baltimore. You would need a really excellent team to overcome that obstacle. 

    If I were deciding between those 4 markets, I'd add those four words to my keywords at BiggerPockets and see what people are saying over the next couple of weeks. Each one has it's pros and cons. Pair down the list. If you really can't decide, you should overcome the analysis paralysis by just picking one - pick out of a hat if you need to. You can make Real Estate investing work in almost any market. Good luck =)

    1Reply
  • Puneet Sharma
    MD · Member since 2020 · 2 posts · 0 votes
    5y

    Thanks, Seth for the Updates. Which one are the upcoming areas of Baltimore to invest in 2021 where we have the most population growth/Job growth?

    0Reply
  • Ozzy SirimsiBusiness Member
    Real Estate Agent · Baltimore, MD · Member since 2016 · 1k+ posts · 782 votes
    5y

    @Puja Devi

    You want to invest 50k total or you have 50k cash and you want to get a loan

    50k for a dublex could be a money maker, also could be a biggest mistake.

    You will be in a pretty rough area.

    You will have to rent it by gut feeling rather than metrics.

    2nd one has many other options.

    0Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    5y

    @Puja Devi, in the current real estate market, strong cash flow means more risk, so you need to balance that.  When investing, you are either going to need to trust your team's opinion or do your own research.

    The questions I always asked myself when investing, which I think would be good to ask a team in any market: are you comfortable going to the property at 2am?  Would you send your spouse or children (assuming the children are old enough) there in the dark?  Would you live there if need be?

    When I look at rougher neighborhoods, I factor in more vacancy, higher turn over costs, and often times these properties in my market are older and have a higher Capex budget. All told, the cash flow is higher for the additional risk, but not what I would call significantly higher when accounting for these reserves.

    1Reply
  • Kerry Noble JrPro Member
    Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    your money could definitely stretch here in Central Indiana

    0Reply
  • Gloria N GearBusiness Member
    Realtor · Indianapolis IN · Member since 2018 · 464 posts · 339 votes
    5y

    All good points in the posts above me -- You need to figure out what your risk vs reward is.  I am from the Indy market and would be glad to have a conversation with you.  I will tell you that the small multi-family inventory is very low here right now, but there are options.  

    0Reply
  • Puja Devi
    OP
    Investor · Los Angeles, CA · Member since 2020 · 30 posts · 15 votes
    5y
    Originally posted by @Ozzy Sirimsi:

    @Puja Devi

    You want to invest 50k total or you have 50k cash and you want to get a loan

    50k for a dublex could be a money maker, also could be a biggest mistake.

    You will be in a pretty rough area.

    You will have to rent it by gut feeling rather than metrics.

    2nd one has many other options.

     Hey Ozzy, so I have 50k for a downpayment. I am comfortable getting a loan for the rest for a good quality multi-unit property in a good area with good tenant base. That is mostly what I care about. 

    0Reply
  • Puja Devi
    OP
    Investor · Los Angeles, CA · Member since 2020 · 30 posts · 15 votes
    5y
    Originally posted by @Evan Polaski:

    @Puja Devi, in the current real estate market, strong cash flow means more risk, so you need to balance that.  When investing, you are either going to need to trust your team's opinion or do your own research.

    The questions I always asked myself when investing, which I think would be good to ask a team in any market: are you comfortable going to the property at 2am?  Would you send your spouse or children (assuming the children are old enough) there in the dark?  Would you live there if need be?

    When I look at rougher neighborhoods, I factor in more vacancy, higher turn over costs, and often times these properties in my market are older and have a higher Capex budget. All told, the cash flow is higher for the additional risk, but not what I would call significantly higher when accounting for these reserves.

    Hi Evan, thanks for this. Does this mean that it's more unlikely to have cash flowing properties in good areas with solid tenant base? I have $50k for a down payment but wanting to take a loan out to cover the rest of the property. I'd like to stay away from rough neighborhoods. Can you elaborate on the relationship between cash flow and risk? 

    0Reply
  • Puja Devi
    OP
    Investor · Los Angeles, CA · Member since 2020 · 30 posts · 15 votes
    5y
    Originally posted by @Seth Hochberg:

    Hi Puja, welcome to BP. I can only speak about Baltimore, that it is a strong cash-flowing market, but somewhat risky if you've never stepped foot in Baltimore. You would need a really excellent team to overcome that obstacle. 

    If I were deciding between those 4 markets, I'd add those four words to my keywords at BiggerPockets and see what people are saying over the next couple of weeks. Each one has it's pros and cons. Pair down the list. If you really can't decide, you should overcome the analysis paralysis by just picking one - pick out of a hat if you need to. You can make Real Estate investing work in almost any market. Good luck =)

    Great idea, Seth! I'll definitely do that! Any neighborhoods in Baltimore you recommend digging into? I'm looking for a safer area, with good tenant base. Should I go with a turnkey company instead?

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

    Hi Puja, you have the hard step figured out already with cash available so the rest should be easy :) 

    I am from Northern VA and similar to CA, property prices are high and there is a lot of competition so I decided to go out of state. I decided to work with Martel Turnkey and Roofstock to close on 2 Single Family Homes in Cleveland and Memphis. So definitely look into those two. Let me know if you want to connect and chat about the purchase process.

    1Reply
  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    5y

    @Puja Devi it all depends on your personal objectives. Which market will help you best achieve those objectives? Since you are looking for cash flow, can you get the kind of cash flow in Riverside or Inland Empire that you can get in Columbus, Indianapolis or Baltimore? Another major consideration is that CA is notoriously unfriendly towards landlords. You're going to have a much higher mortgage on a CA property than one in the Midwest. Will you be able to cover the debt service if get a bad tenant and can't evict them in CA?

    2Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Puja Devi

    Out of state in the Midwest you’ll be able to find homes under $200k that make good investments that would be ok with the $50k you have for a down payment at 25% down.

    The Columbus market is hot but it’s great for cash flow and appreciation. If you’re looking for no appreciation at all and the lowest possible prices I’d recommend other markets like Detroit, Dayton, Cleveland.

    When investing out of state it’s important to have a strong local team of an agent, contractors, property managers, and lenders.

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
    WebsiteView Page
    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Puja Devi:
    Hi All - I have $50k to invest and looking for a cash flowing duplex or triplex. Should I invest in CA (Riverside & larger Inland Empire I hear has good tenant base) or out of state--Columbus, Indianapolis, Baltimore to name a few. I've spoken with a few agents and investors and can't seem to make up my mind. Would appreciate any tips on how to think through this. 

    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
    Reafco512 Reviews
    WebsiteView Page
    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities and City of Detroit Neighborhoods:

    https://www.biggerpockets.com/...

    [email protected]248-209-6824
    Logical Property Management4.9459 Reviews
    WebsiteView Page
    1Reply
  • Mike Mocek
    Property Manager / Licensed Realtor · Toledo/Columbus, OH · Member since 2019 · 244 posts · 262 votes
    5y

    Hey There @Puja Devi Do you have your core yet already established?  I invest in areas where I do not live and before I look in a new area, I get my core lined up.  If you do, you should be golden, the support is really going to help you along the way!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free