Out of state Investor; looking into Oklahoma...

24 Replies

Hello all,

I am an out of state investor from Southern California.  I've done quite a bit of research on some out of state rental investment opportunities.  I was initially leaning towards Las Vegas but I soon learned the investors have drove the prices up quite a bit in these last few years causing my potential cash flow to diminish.  I have really been focusing and doing quite a bit of homework in the state of Oklahoma, more specifically Norman, Ok.  I was wondering if any of you local or out of state investors can offer any feedback on the area?  Success stories, etc.  Thanks for any input, I really appreciate it. 

Have you looked at central california. Not sure what "margins" you are looking for, but we have done very well for our niche.

We self manage and that has saved us a lot of money and allowed us to have more control. We have managed to do so even across the country. We invest in class A real estate. It has smaller margin but less expenses, fewer vacancies, appreciations in both value and rent PLUS we can self manage. My website talks about our model/experience.

While I can't speak about Oklahoma. Make sure you budget for more "Expensive" repairs. My husband is active duty navy so "home" is relative. Therefore we invest all over. I know once we retire we plan on selling all the houses doing a 1031 so that they are local. Long distance houses are a lot more expensive than ones close by. We paid $250 for caulk the other day, something my husband could have done in 15 minutes simply because it was 3 thousand miles away.

I actually lived in Pasadena for 9 years and had rentals there.  I have since sold everything there and moved to OKC.  I am very happy with my returns here.  Not the huge gains on appreciation I was seeing in cali but also not the huge risk either.  I also get much better return dollar for dollar on rents.  

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Oklahoma has a pretty good rental market. I live in Ada, OK and the market here is great because of the College and Chickasaw nation.  I can discuss further if you'd like. 

@Rhett Tullis

It all depends on the investors' goals. What they want more- cash flow, appreciation, high-end, low-end, etc. I don't know much about the Oklahoma market but seems like it would be plenty stable and fine for cash flow, similar to most of the midwestern markets. Known for stability, not so much for appreciation.

Rhett is correct and so is Ali. Oklahoma won't give you much in the way of appreciation but does offer, great cash flow and a good rental market. 

Most of Norman is expensive compared to other parts of the city but you do have a large student population with OU being right there. What kind of property are looking to buy and in what price range? i left OKC 3 years ago but still invest long distance there.

I just sold my first rental property in Norman in June. I bought it retail in 2003 for 120k and ended up selling it for 130k. When it was all said and done it was pretty much a wash. On the plus side it paid for my living expenses during college and was cash-flowing after I left as well (rented for around $1200 a month). My stepfather managed it from Tulsa after I graduated and as a result it probably had a higher vacancy rate. As others above have said the market doesn't appreciate a whole lot but if you have a good manager it should be pretty easy to keep rented. It should be a pretty good market if you buy correctly (vs. retail like I did). Try to keep your area within an easy bike ride distance to the campus to capitalize on the student population. Shoot me a message if you have any specific questions about the area.

I went to school in Norman and lived there off and on for 8 years. It is one the the best places to live in Oklahoma. I don't personally invest there because you are competing with a lot of retail buyers. However, I am comparing it with smaller areas that you probably would not consider because of the management issues. I would certainly recommend it in general- if you find a deal that meets your numbers. 

I'm looking at the residential side of things out there.  I understand I'm not going to make millions off of a single family home in Oklahoma in the way of appreciation but I am looking for something steady in the way of cash flow.  This is a "starter" which I will use to build cash flow a little bit of equity, purchase my next one, and move on.  I will probably stay in the range of 115k - 125k on this one.  What do you guys think?  Thanks again. 

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lots of deals in that range although your best return is in the sub 100k market.  remember the cost of living here is low especially when compared to cali and so are the prices.  feel free to give me a call anytime,  not trying to push anything but have pretty broad knowledge of the okc rental/buy and hold market.  i personally buy here so i think it is a great deal overall.

@Justin Brophy curious if you ever pulled the trigger in Norman? 

Price point and equity position are better in OKC. With off-market, it's very easy to hit the 1% rule. C class 60-80

In Norman prices are driven up by parents buying for their kids to live in while they're in school. It doesn't matter if they're buying at top of the market because they'll save on not paying rent and make all their money back when they sell. 

@George P. heard! I was thinking you were paying property management and I was thinking there's no reason to be nearby if someone you trust is doing the work for you! I see so many investors come to OKC that are out of state and happy, and I try so hard to re-set standards when people hold back because they're scared. I heard once on a BP podcast actually that when you invest at home, you're generally not driving to the property on a regular basis, as long as you have someone doing it, not being within driving range of your property is no reason to not make more money in a market that's hitting your return goals. 

Originally posted by @Justin Brophy :

@Kiera Underwood

I ended up purchasing a condo in Maui last year.  I understand with the market in Maui; it will be a long term investment.  

Justin did you buy a condo at Hale Kai in Lahaina? How's it performing as a vacation rental? Is it making some nice monthly cash flow? 

Looks like you have some equity in it.. the tax assessed value is higher than what you paid less than a year ago; you must've gotten a good deal! Traditional MLS listing? Needed total rehab?

(Our tax assessed values run about 10-30% below market values)

@Greg Gaudet  

Yes, we did purchase our condo last year at Hale Kai. We are happy with it as we knew going into the transaction we would be content with breaking even on a monthly basis (After mortgage/taxes, property management fees, HOA's, etc.). We stay pretty close to breaking even throughout the year. The condo was a traditional MLS listing and actually was almost completely updated before we stepped foot inside. We have made a few small changes of our own. There is another condo (directly above ours) currently in escrow.