Market for Out Of State Investing

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Market for Out Of State Investing

Apoorva Modali
Member since 2019 · 6 posts · 15 votes

Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

I am looking for markets with;
YOY population growth (>1.5%)
Low unemployment rate
Stable local government
Job growth 
Job Diversity
Cash flow with current interest rates

My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

Looking forward to all the responses.

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y

@Apoorva Modali

is this going to be your first purchase?  I just don't think that buying a random property thousands of miles away to break even or cash flow negatively is a good use of your 100K. 

can you house hack locally?

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  • Jason WrayPro Member
    Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
    3y

    I have seen a lot of activity in Indiana just outside of carmel and all around Dayton Ohio.  Majority of my customers have been buying in IN, OH, TN, FL, TX just need to narrow down to cities of choice.

    [email protected]727-637-4289
    2Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    Hey Apoorva, I'd definitely point you in the direction of the Detroit but it's not going to hit your population growth benchmark... not technically at least. There's some questions as to whether that last census count was accurate.

    Even still, if you understand what's happening in Detroit you know it's a sleeper right now. There's massive investment and revitalization that's been happening for the last 10 years and folks are starting to figure it out.

    FWIW, I live up in the Central Coast and have 12-doors there. I'm extremely active in the market outside my own investing.

    1Reply
  • Peter Dorinsky
    Real Estate Agent · Columbus, OH · Member since 2020 · 149 posts · 193 votes
    3y
    Quote from @Apoorva Modali:

    Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

    I am looking for markets with;
    YOY population growth (>1.5%)
    Low unemployment rate
    Stable local government
    Job growth 
    Job Diversity
    Cash flow with current interest rates

    My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

    Looking forward to all the responses.

    Hey Apoorva, I'd also suggest looking into some of the Ohio markets. Columbus specifically has many big-tech companies either moving into the market or expanding their business here, which is contributing to rapid economic development. Intel is investing $20 billion to build chip manufacturing plants in Licking County, which is projected to create 30,000 new jobs. This is the largest private investment in state history. In addition to Intel, other big companies like Google, Amazon and Facebook are also expanding their business here in Columbus. Columbus is also home to The Ohio State University, one of the largest public universities in the country, as well as L Brands, a big player in the retail industry. Happy to connect if you're interested in learning more about the market! 
    3Reply
  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    So you want a property in a growing, desirable, economically booming location that cash flows as a long term rental in an A-B neighborhood with little to no rehab?

    I'm not sure that that exists at the moment. And if it hits the MLS, it's going to get bids from every Zillow prowler out there with cash burning a hole in his/her pocket. You need a time machine or the willingness to take on a project to add value to make that happen.

    I hope I'm wrong. Good luck in your search. If you start looking at populations of $50k-150k, you may have better luck. That 1.5% population growth is certainly easier to hit given the lower denominator. 

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    3y
    Quote from @Apoorva Modali:

    Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

    I am looking for markets with;
    YOY population growth (>1.5%)
    Low unemployment rate
    Stable local government
    Job growth 
    Job Diversity
    Cash flow with current interest rates

    My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

    Looking forward to all the responses.


     Columbus, Ohio would fit that criteria

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    2Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    3y
    Quote from @Apoorva Modali:

    Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

    I am looking for markets with;
    YOY population growth (>1.5%)
    Low unemployment rate
    Stable local government
    Job growth 
    Job Diversity
    Cash flow with current interest rates

    My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

    Looking forward to all the responses.

    Hey Apoorva, totally can relate with you being from an expensive real estate market - I moved to Columbus a few years ago (from Portland, Oregon which was super expensive) to become a full time real estate investor, and ever since, I've completed quite a lot of BRRRRs, flips, and own a successful rental portfolio here in Columbus Ohio. There's so many catalysts for population and job growth (Intel, Honda, Amazon, Nationwide Hospital, etc). I can definitely tell you there's still a lot of positive cash flowing and 1% rule deals and you get amazing appreciation. As an investor and agent here in Columbus Ohio, if you have any questions or want to connect, definitely reach out!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9124 Reviews
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    2Reply
  • Evan HoppleBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 285 posts · 420 votes
    3y

    @Apoorva Modali
     
    Columbus, OH checks those boxes

    [email protected]614-924-8151
    Reafco Real Estate
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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Apoorva Modali:

    Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

    I am looking for markets with;
    YOY population growth (>1.5%)
    Low unemployment rate
    Stable local government
    Job growth 
    Job Diversity
    Cash flow with current interest rates

    My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

    Looking forward to all the responses.


     You should only purchase in area where the inventory is  reduced. The other factors are secondary. 

    Oakland, MI and Orange,CA are the two counties with shifting inventory nationwide.

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Apoorva Modali:

    Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

    I am looking for markets with;
    YOY population growth (>1.5%)
    Low unemployment rate
    Stable local government
    Job growth 
    Job Diversity
    Cash flow with current interest rates

    My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

    Looking forward to all the responses.

     I am very familiar with most, Indi, Memphis, Detroit and others. We picked Cleveland about 10 years ago and boy were we correct. We were getting about 30% net caps, now about 15- 20% as everything has doubled tripled quadrupled or more. Still going strong. I just picked up 7 more, all 80kish, all with 1100- 1400 in rents,,,,,,, All the best 

    I ASSUME you are just searching MLS, that is not where the deals are. I have done about 500, yes 500 in my market, all off market, no realtor involved.

    Oh we started in Jackson MS about a month ago, similar numbers but no snow, 

    3Reply
  • Taz Zettergren
    Real Estate Agent · Memphis, TN · Member since 2019 · 365 posts · 264 votes
    3y

    @Apoorva Modali Memphis/North MS or Little Rock, AR would be great areas for you to invest and you don't have to deal with inclement weather. I've helped clients with hundreds of deals in these markets and they're all still cash flowing positively with the current rates. 

    Feel free to reach out if I can be of any assistance. Best of luck investing! 

    1Reply
  • Joe HammelBusiness Member
    Real Estate Agent · Metro Detroit, MI · Member since 2018 · 614 posts · 666 votes
    3y

    Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.

    I cash flow $100k a year off 20 doors and have built a ton of equity in a short amount of time. See portfolio pic.

    Purchase: $80k-$130k

    Rent: $1100-$1500 (no rent control in MI)

    1% rule: 1%-1.4% rule deals

    ROI: 10-14%

    Cash flow: $200-$300/door (after all expenses and budgeting for maint, capex, vacancy)

    Appreciation: 3-10%+ (has been double digit for a decade)

    Location: C+, B-

    These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

    We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

    The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties. We don’t buy those. We have found what works and repeat it as much as funds allow. Detroit is known as the highest rent to price ratio in the country…and we’ve found the perfect balance of price/location within the area.

    There are 2 types of people who dog on Detroit..

    1. People who don't actually own property in Detroit

    2. People who did it wrong or weren't able to execute.

    If you do it right, its statistically the best market in the country for cash flow.

    Here is a picture of my portfolio...

    [email protected]248-422-1685
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    2Reply
  • Carlos Ramirez
    Investor · Santa Barbara · Member since 2022 · 30 posts · 12 votes
    3y

    Hey Apoorva, here is some advice I'd like to share based on what you said

    - Look at mid-sized cities in the Southeast and Midwest instead of big coastal cities. Some examples could be: Columbus OH, Indianapolis IN, Kansas City MO, Louisville KY, Oklahoma City OK.

    - Research cities using census data and real estate market reports to find ones with 1.5%+ population growth, unemployment under 5%, and positive job and economic growth.

    - Drive around potential neighborhoods and look for B grade or better properties that seem well-maintained. Look up owners on assessor sites and send letters expressing interest.

    - Run the numbers on potential properties.

    At today's rates something around $80k-$120k purchase price that rents for-

    $1000-$1250 could cash flow 

    $100-$300/month using 20% down and 30 year fixed rate.

    - Expand your search radius if you aren't finding deals within an initial area. Be open to looking at both SFH and small multifamily properties.

    - Have a real estate agent or turnkey company vet properties and provide numbers if you are searching remotely. Use services like Roofstock to browse vetted rental properties.

    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Apoorva Modali

    is this going to be your first purchase?  I just don't think that buying a random property thousands of miles away to break even or cash flow negatively is a good use of your 100K. 

    can you house hack locally?

    4Reply
  • Apoorva Modali
    OP
    Member since 2019 · 6 posts · 15 votes
    3y

    This would be my 4th out of state property. I own 2 SFHs (A- and A) in Scottsdale, AZ and a small multiplex (C+) in Columbus, OH. I haven't been able to find decent cash flowing deals in Columbus which are in B- neighborhoods or better. I don't want to invest in C+ and below properties anymore. I also connected with real estate agents in the Carolinas for MTRs and STRs and since last month, I couldn't find deals there either. Now, I'm looking into other markets that I haven't already looked into.

    I wouldn't be able to house hack locally, since I live in the Bay Area, CA and I just don't have enough capital to house hack here and cash flow or even break even. My rent is $3650 / month and I couldn't find a single multiplex in which I could occupy one of the units and rent out the others and still have out of pocket monthly payments be less than $5000 - $6000, without having to massively downsize.

    5Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Apoorva Modali

    got it!  that is a nice portfolio already - congrats on your success so far.  what about 2-3 hours from the bay area but still 'local'?

    2Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Apoorva Modali:

    This would be my 4th out of state property. I own 2 SFHs (A- and A) in Scottsdale, AZ and a small multiplex (C+) in Columbus, OH. I haven't been able to find decent cash flowing deals in Columbus which are in B- neighborhoods or better. I don't want to invest in C+ and below properties anymore. I also connected with real estate agents in the Carolinas for MTRs and STRs and since last month, I couldn't find deals there either. Now, I'm looking into other markets that I haven't already looked into.

    I wouldn't be able to house hack locally, since I live in the Bay Area, CA and I just don't have enough capital to house hack here and cash flow or even break even. My rent is $3650 / month and I couldn't find a single multiplex in which I could occupy one of the units and rent out the others and still have out of pocket monthly payments be less than $5000 - $6000, without having to massively downsize.


     I do househack in bay area and doing oversize, now pretty much I have no mortgage. I sell my primary first before I find house that has multiple building and view.

    Getting househack in bay area is actually very easy and in term of money it's better than keep adding OOS.

    I have few OOS as well, but I plan to keep more buying in bay area where rentable unit is more than one. There're more business opps in bay.

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    wait a sec, are you saying you're still renting in bay area and purchasing OOS ?
    0Reply
  • Apoorva Modali
    OP
    Member since 2019 · 6 posts · 15 votes
    3y

    Yes. I am still renting in the bay area. I looked at a few multi unit properties in the bay area $1 to $1.5 mil, but I couldn't find any deals where I could pay less than $4000 per month out of pocket to cover all the costs (PI + taxes + vacancy + Capex - rental income). I also don't want to massively downsize where I live (2bed 2bath townhome with a backyard for my dog). Since then, the interest rates have gone up even higher. I am very interested in knowing how you're able to house hack in the Bay Area. I'd love to discuss numbers if possible.

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @Apoorva Modali- thanks  1) make sure you are pre approved and have  worked with lender regarding different options and  with  present rates  2)  loan pricing will improve as the  down payment increases  3) down payment can be as low as  15% of price if   sfr ...good luck

    0Reply
  • Taylor A. Harris
    Investor · Member since 2023 · 4 posts · 3 votes
    3y

    @Apoorva Modali

    My partners and I have found that most of your criteria can be checked off in the cities neighboring Cleveland Ohio. The home prices are feasible, the tenant base comes from schools and hospitals, and they’re seems to be stability when it comes to appreciation.

    If you end up in the market and need a place to start, I’d be happy to connect you to whomever I can. 

    1Reply
  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 720 votes
    3y
    Quote from @Apoorva Modali:

    Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

    I am looking for markets with;
    YOY population growth (>1.5%)
    Low unemployment rate
    Stable local government
    Job growth 
    Job Diversity
    Cash flow with current interest rates

    My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

    Looking forward to all the responses.

    Apoorva , because you are in the Bay Area take a look at the Reno area. Good population growth, appreciation, and geographically limited building.  Close to the Bay Area it’s easy to check the area.  Message me I’d be happy chat to more about it. 

    2Reply
  • Jake KnightPro Member
    Property Manager · Indianapolis · Member since 2017 · 303 posts · 146 votes
    3y
    Quote from @Jason Wray:

    I have seen a lot of activity in Indiana just outside of carmel and all around Dayton Ohio.  Majority of my customers have been buying in IN, OH, TN, FL, TX just need to narrow down to cities of choice.


     We operate in Central Indiana and can confirm, let me know if you need anything!

    0Reply
  • Chaits J.
    Investor · Princeton, NJ · Member since 2017 · 105 posts · 22 votes
    3y

    On a side note, Where do you all find year on year Or latest population growth information ?

    Thanks,
    C

    0Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 835 votes
    3y
    Quote from @Apoorva Modali:

    Hi, I've been looking for LTRs in the Carolinas and I haven't found a decent deal in the last 3 months. I live in California and with the current interest rates, I am a bit lost and I need help looking for new markets to invest in (total $100k cash available to invest). 

    I am looking for markets with;
    YOY population growth (>1.5%)
    Low unemployment rate
    Stable local government
    Job growth 
    Job Diversity
    Cash flow with current interest rates

    My overall strategy is to buy and hold. I am looking for properties with low to no rehab. B- and above neighborhoods. Any help would be greatly appreciated! If anyone could share the numbers on a recent purchase, that'd help me understand what to expect from a market. 

    Looking forward to all the responses.


     I think Northern Kentucky (across the bridge from Cincinnati) would be great for you. There is so much to talk about that Dm would be best, so if you are interested, shoot me a message and we can talk about what this area has to offer. 

    [email protected]859-443-4952
    Sam McCormack Realtor
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  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    3y
    Quote from @Apoorva Modali:

    This would be my 4th out of state property. I own 2 SFHs (A- and A) in Scottsdale, AZ and a small multiplex (C+) in Columbus, OH. I haven't been able to find decent cash flowing deals in Columbus which are in B- neighborhoods or better. I don't want to invest in C+ and below properties anymore. I also connected with real estate agents in the Carolinas for MTRs and STRs and since last month, I couldn't find deals there either. Now, I'm looking into other markets that I haven't already looked into.

    I wouldn't be able to house hack locally, since I live in the Bay Area, CA and I just don't have enough capital to house hack here and cash flow or even break even. My rent is $3650 / month and I couldn't find a single multiplex in which I could occupy one of the units and rent out the others and still have out of pocket monthly payments be less than $5000 - $6000, without having to massively downsize.


     have you looked at any new construction in columbus or build to rent? I'm focused more on that lately 

    [email protected]786-494-6766
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