New Girl Looking to Invest, but where?!

Starting Out
5yFollow

New Girl Looking to Invest, but where?!

Kayde C.
New to Real Estate · San Antonio, TX · Member since 2021 · 11 posts · 16 votes

Hi there, I have never owned my own home before, but my income is 6 figures, my credit is great and my DTI is below 5%. My issue is that I live in SoCal and I do not wish to Invest here since property values are already way too high. I was thinking of places like FL, MN, OH, IN, but I do not have any connections to any of these other states, nor do I even know how to find/rehab in these places. I work remotely so I can pretty much drive to where ever I buy and stick around until the rehab is complete, but how, where do I find a way to start?

7Reply
119 views

Most Popular Reply

Sarah Sass
Rental Property Investor · Member since 2021 · 11 posts · 24 votes
5y

Hi Kay, I've been stalking the BiggerPockets forums for years and finally made an account to join in the conversation. I'm a fellow Californian, now Oregonian, that grappled with the same issue.

I recommend breaking it down market potential into a couple of categories:

1. City investment: What are the major attractions in this city? Ex: amusement parks, sports arenas, concert venue, nightlife, major parks, universities, festivals, races. How often will these draw people? Is there a convenient airport nearby? 

2. Shortterm Rental viability: What are the AirBnB/STR restrictions in the market? Can any of them play to your advantage? What are the booking rates? Are there shortages in available lodging?

3. Longterm Rental viability: Who are the major employers in the city and where are they located? Have any companies announced future campuses to be located in this city? How many major hospitals and colleges are nearby? How are the school zones?

4. Risks/Additional costs: Snow, tornados, flooding, sprinklers, high city taxes. All of these can cause extra damage or require hiring someone to take care of it. For extra credit, consider the impact of climate change on the area. I wouldn't touch California, cost aside, given all the wildfires and heat waves.

Using this framework, I ended up purchasing a place in Nashville for STR purposes. The STR permit structure provided me with an advantage over veteran investors (primary residence only). I discovered that even with hotels and AirBnBs, there's a shortage in STR due to extreme demand for the music scene, 3 sports arenas, the university, 3 nearby hospitals, and the fantastic nightlife, particularly by Bachelorette parties.

The weather means I don't need to run sprinklers or shovel snow. I only have to pay for my grass to be cut 6 months per year. Tornados are supposed to be a non-issue, though one came through a year ago. Longterm, Amazon announced a major investment in the city and recently, Oracle did the same. This means new tech professionals should drive property values up.

I selected my house in an area where supply is limited by geographic barriers, where the safety is starting to improve, and where things are walkable. This cost me $100k more than other homes but paid off in bookings. I paid on the higher side for my home, but got it fully furnished with no needed repairs. After tech-ing it up to automate the process, it took 6 months (pre-pandemic) to break even on all costs/mortgage payments aside from the initial down payment. 18 months in, it's t's already up $90k. I hope this helps!

21Reply
See this reply in the discussion

46 Replies

Jump to latestLatest
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    I would start by thinking about places where you have family, spent time growing up or living and you know the area.

    5Reply
  • Kayde C.
    OP
    New to Real Estate · San Antonio, TX · Member since 2021 · 11 posts · 16 votes
    5y
    Originally posted by @Scott Sklare:

    Hi Kay,

    I live and invest in south-central Wisconsin.  It is an absolute goldmine for investors.  I am a licensed broker, investor, property manager, contractor all rolled into one.  Feel free to give me a call if you want to discuss it.  608-438-6371, Scott

    Thank you Scott! I will be reaching out.

    2Reply
  • Kayde C.
    OP
    New to Real Estate · San Antonio, TX · Member since 2021 · 11 posts · 16 votes
    5y
    Originally posted by @Theresa Harris:

    I would start by thinking about places where you have family, spent time growing up or living and you know the area.

     Unfortunately, I only have family in the 2 most expensive markets (LA & NYC) so I will be having to do this solo and in a place where I don't know anyone. Thank you for your comment though Theresa! 

    1Reply
  • Sarah Sass
    Rental Property Investor · Member since 2021 · 11 posts · 24 votes
    5y

    Hi Kay, I've been stalking the BiggerPockets forums for years and finally made an account to join in the conversation. I'm a fellow Californian, now Oregonian, that grappled with the same issue.

    I recommend breaking it down market potential into a couple of categories:

    1. City investment: What are the major attractions in this city? Ex: amusement parks, sports arenas, concert venue, nightlife, major parks, universities, festivals, races. How often will these draw people? Is there a convenient airport nearby? 

    2. Shortterm Rental viability: What are the AirBnB/STR restrictions in the market? Can any of them play to your advantage? What are the booking rates? Are there shortages in available lodging?

    3. Longterm Rental viability: Who are the major employers in the city and where are they located? Have any companies announced future campuses to be located in this city? How many major hospitals and colleges are nearby? How are the school zones?

    4. Risks/Additional costs: Snow, tornados, flooding, sprinklers, high city taxes. All of these can cause extra damage or require hiring someone to take care of it. For extra credit, consider the impact of climate change on the area. I wouldn't touch California, cost aside, given all the wildfires and heat waves.

    Using this framework, I ended up purchasing a place in Nashville for STR purposes. The STR permit structure provided me with an advantage over veteran investors (primary residence only). I discovered that even with hotels and AirBnBs, there's a shortage in STR due to extreme demand for the music scene, 3 sports arenas, the university, 3 nearby hospitals, and the fantastic nightlife, particularly by Bachelorette parties.

    The weather means I don't need to run sprinklers or shovel snow. I only have to pay for my grass to be cut 6 months per year. Tornados are supposed to be a non-issue, though one came through a year ago. Longterm, Amazon announced a major investment in the city and recently, Oracle did the same. This means new tech professionals should drive property values up.

    I selected my house in an area where supply is limited by geographic barriers, where the safety is starting to improve, and where things are walkable. This cost me $100k more than other homes but paid off in bookings. I paid on the higher side for my home, but got it fully furnished with no needed repairs. After tech-ing it up to automate the process, it took 6 months (pre-pandemic) to break even on all costs/mortgage payments aside from the initial down payment. 18 months in, it's t's already up $90k. I hope this helps!

    21Reply
  • Charles Renn
    Real Estate Agent · Los Angeles, CA · Member since 2021 · 215 posts · 103 votes
    5y

    Hi Kay,

    Its true, socal prices are generally high. There are still opportunities to invest here. If you're open to a live-in investment, a house hack is ideal. My team focuses on this type of real estate investment here in socal. Another option is potential short term rentals near Joshua Tree or Plan Springs. My last tidbit to consider is the higher appreciation in California vs other states.

    Feel free to reach out if you have any thoughts or questions.

    4Reply
  • Andrew Bilis
    Investor · Nashville · Member since 2021 · 13 posts · 14 votes
    5y

    Nashville and its surrounding areas are a great place to invest in my opinion. Im an investment agent here and ive seen a huge influx of out of state investors.. and for good reason. No matter what location you decide to invest in, I believe its always a good idea to examine and learn the market before any serious transactions occur!

    1Reply
  • Marijuana (MP) Vandyck
    Investor · FL · Member since 2015 · 40 posts · 24 votes
    5y

    @Kay C.

    I second what @Scott Sklare said. I live and invest in Florida now but I am from Beloit, WI and that general area and although the prices have gone up in that region it is well worth a look.

    1Reply
  • Marijuana (MP) Vandyck
    Investor · FL · Member since 2015 · 40 posts · 24 votes
    5y

    @Scott Sklare

    Hey Scott. Hope all is well.

    1Reply
  • Daniel Molina
    Member since 2020 · 117 posts · 56 votes
    5y

    @Kay C.

    For out of state connections will be key. Find a good realtor from the area. For which area to invest in, depends on what type of property you are looking for. Location is everything.

    1Reply
  • Account Closed
    Valencia, CA · Member since 2021 · 42 posts · 21 votes
    5y

    @Kay C. Hi Kay. I am also in So Cal and you’re right, it is too expensive here. Especially to start! (In my opinion). I hear Midwest is good investing. Also, what about somewhere close that’s a little cheaper, like Bakersfield, Ca? I’ve recently begun my journey there. Cost are doable. Yet, in the right area is profitable. (Check out zip codes like 93312)

    If you go this route let me know! I’d love to connect :)

    Good luck!

    1Reply
  • Meagan Martinez
    New to Real Estate · Salt Lake City · Member since 2021 · 20 posts · 9 votes
    5y

    I'm right there with ya! I was also looking at rentals out of my state because Salt Lake is becoming crazy expensive. 

    I found that it's pretty hard. Particularly if you're wanting to rehab a property. Lenders will be skeptical for you to take on a rehab and rent property if you're not close by, especially if you've never done one successfully before. 

    Investing in your backyard is the best idea to start with. Get financing in your state, start driving for dollars and look for distressed properties or have an agent find you an under-valued home. 

     But if you choose out of state- find a great agent and property manager to help you with the process.

    2Reply
  • Aaron Burke
    Rental Property Investor · Tehachapi, CA · Member since 2020 · 4 posts · 3 votes
    5y

    @Chrissy Posney

    I'm currently looking in the Bakersfield area as well. South West Bakersfield is growing quite a bit as well as the west.

    1Reply
  • Account Closed
    Valencia, CA · Member since 2021 · 42 posts · 21 votes
    5y

    @Aaron Burke Have you found anything yet?

    1Reply
  • Aaron Burke
    Rental Property Investor · Tehachapi, CA · Member since 2020 · 4 posts · 3 votes
    5y

    @Chrissy Posney

    Just doing my DD till something comes up with good numbers. Markets still crazy.

    2Reply
  • Deana Vasquez
    Real Estate Agent · Eastvale, CA · Member since 2021 · 7 posts · 18 votes
    5y

    @Kay C. Hi Kay, my husband and I live in Socal and purchased an investment property in Mentor, Ohio in 2020. We connected with a great realtor who helped us through the process, as well as, providing a referral to a trustworthy general contractor in Ohio. We manage our out of state rental ourselves. We are currently in the process of buying our 3rd investment property in Ohio. We have had a great experience with monthly cash flow and property appreciation. If you are interested in learning more about our process please feel free to reach out, we are happy to help.

    Take care

    Deana Vasquez

    3Reply
  • Arturo Lopez
    Investor · Sacramento, CA · Member since 2020 · 11 posts · 6 votes
    5y

    @Deana Vasquez Thanks for sharing that! Like @Kayde C. I'm also in California and looking to invest out of state. Ohio is actually where I want to get started. I'd love to connect and ask you about your experience in Mentor, OH.

    2Reply
  • Deana Vasquez
    Real Estate Agent · Eastvale, CA · Member since 2021 · 7 posts · 18 votes
    5y

    @Arturo Lopez please provide your contact information and I'll be happy to reach out.

    1Reply
  • Louis Madrigal
    Member since 2021 · 1 post · 1 vote
    5y

    @Scott Sklare

    That’s awesome info, I might look to contacting you in the future and maybe working with you. Thanks for the information!

    1Reply
  • Mohamed Mahmoud
    Real Estate Agent · Lexington, KY · Member since 2017 · 8 posts · 3 votes
    5y

    @Deana Vasquez can you provide more info please?

    1Reply
  • Jesse Ruiz
    Member since 2020 · 19 posts · 7 votes
    5y

    Great info here for a noob investor like myself. :)

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Kayde C.:

    Hi there, I have never owned my own home before, but my income is 6 figures, my credit is great and my DTI is below 5%. My issue is that I live in SoCal and I do not wish to Invest here since property values are already way too high. I was thinking of places like FL, MN, OH, IN, but I do not have any connections to any of these other states, nor do I even know how to find/rehab in these places. I work remotely so I can pretty much drive to where ever I buy and stick around until the rehab is complete, but how, where do I find a way to start?

    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. I am also looking to invest in Cincinnati and Cleveland.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    3Reply
  • Sunil Sequeira
    Member since 2021 · 1 post · 1 vote
    5y

    @Scott Sklare

    Hi Scott

    Can you please send me a few listing that would be a good investment , I am Canadian investor looking to invest

    1Reply
  • John Daniels
    Rental Property Investor · Gilbert, AZ · Member since 2017 · 40 posts · 23 votes
    5y

    @Kay C.

    Lots of great responses so far, so I just have one more variable to consider. What is your crystal clear criteria? For example, I was looking for small multi family units with a low entry point where I could do some light rehab to force some appreciation.

    I live in the Phoenix metro area so the options were very limited. I slowly increased my search scope until I was able to find some good deals.

    Not having my criteria was frustrating because nothing seemed to fit and I could not evaluate properties well because it was never an apples to apples comparison.

    I recommend writing out your CCC. That might help clarify the best place to invest.

    Good luck!

    2Reply
  • Chinmay N.
    Investor · Jersey City, NJ · Member since 2020 · 39 posts · 22 votes
    5y

    @Deana Vasquez that sounds amazing. I'm curious what made you decide to self manage over hiring a PM. What has your experience been self managing your investments remotely? How do you find find, screen, then lease to tenants, handle maintenance, etc. effectively while being remote?

    2Reply
  • Thomas J Mele
    Investor · Fairfield County, CT · Member since 2021 · 48 posts · 29 votes
    5y

    @Kay C.

    Have you considered the northeast? My market in the Fairfield, New Haven and Litchfield county areas of Connecticut. The market is booming with all NYC residents moving out of the city and heading up north to CT. Close enough to the city but far enough away to get more bang for their buck and not be living on top of their neighbor anymore. Covid has really impacted my market. I love when I keep hearing “this market stinks, there’s no inventory out there” I just smile and nod and say “yea you’re right”. 😂🤦🏻‍♂️🙄

    Meanwhile the investing game is through the roof. You just have to think outside the box and get creative rather than only looking on Realtor and Zillow. Let me know if I can help in anyway. Always looking for new partners on deals! Best of luck!

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free