Have you ever moved markets to speed up your Investing?

22 Replies

I wanted to see how many out there have ever moved to an out of statement market to improve their investing build out. I've been considering different states but its hard because I am in CA. Tax savings would definitely help but whats your opinion or experiences?

I live in CA and own a rental here and a rental out of state. The out of state rental produces about double what my CA rental does. It feels more risky because I can't drive by and touch it but I found a great PM and that makes a big difference.

I would say yes, but I live in Michigan where my current market is, and where a lot of investors in other states invest.  There are a lot of California investors that flip in California, and buy holds in Michigan with the profit.  Like @Brandon Hopkins  says, you are depending on a great PM to keep from getting an ulcer.  I have that great PM here too...which is shy I have California investors working with me.

Without that PM though I would be very careful.

Joe Villeneuve
REcapSystem
A2REIC

I have been looking closer at other areas of the country as well recently because of my tight cf market.  It's not yet knowing a great PM in those markets as @Brandon Hopkins  and @Joe Villeneuve  point out that keeps me from pulling the trigger.  Perhaps there is one here on BP.  LinkedIn has an NARPM group (nat'l assoc of residential prop mgrs) but vetting them out would be tougher.  Most of them don't own rental property themselves it seems.  I have a couple ideas of areas I would like to look at more closely but those are off the top of my head.  Are you guys using a specific site or program or whatever to identify locations with high rent to value? 

I live in DFW, but have shifted most of my new investing to Austin. I've considered moving myself, but it's close enough to go when I need to, and I have good people there.  If I didn't have a family I'd move. 

Thanks @Joe Villeneuve  , I figured BP to be the best resource to find a good PM.  @Jon Klaus  , you are fortunate to have a strong market within driving distance.  Austin's been hot for a while now, no?  I have a little rural market I invest in about 25 miles away to find value.  I've become the largest unit owner in the whole town, but it's just a little farming community I don't think has much appreciation potential.  The good thing is, local investors think I'm crazy so no one invests there!  I've never been a herd follower so I'm concerned about being late to the party wherever I end up investing.  

I live in Austin and do not want to move at all. I love it here!  Its difficult to acquire good buy and holds here now which is why im now starting to invest out of state.  Working on Indy now actually.

Originally posted by @Steve Vaughan :

Thanks @Joe Villeneuve  , I figured BP to be the best resource to find a good PM.  @Jon Klaus , you are fortunate to have a strong market within driving distance.  Austin's been hot for a while now, no?  I have a little rural market I invest in about 25 miles away to find value.  I've become the largest unit owner in the whole town, but it's just a little farming community I don't think has much appreciation potential.  The good thing is, local investors think I'm crazy so no one invests there!  I've never been a herd follower so I'm concerned about being late to the party wherever I end up investing.  

 When you're the big fish in the small pond (town) you can get really good buys, and cash flow is the game.  Have you thought much about exiting when the time comes?  You might look for tenants who have a shot at buying.  Help them plan for buying down the line. 

If I were in a weak market I might look at moving, even with the family. 

@Jon Klaus  , I would love to give a good tenant a shot at buying in the little pond, but what I have is 7-unit and 10-unit buildings.  Good insight on your part.  The sfr's I already wrap and carry or flip. Rent rates on those are basically capped because of the location.  You're definitely right about the advantages of kind of being the go to person when someone really need to sell and that cf is king. The sweet cap rates do come with their own headaches.  I worked for years filling them with quality residents and overcoming a lot of deferred maintenance issues.  @Joel A.    , I heard Indy may be a good place to invest.  Large enough market with good CF.  I'm more of a buy and hold guy also.  Any luck finding a quality PM that'll keep you out of the ghetto areas and look after your investment?  Someone who actually owns rental property themselves?  

@Steve Vaughan  

Stick to your little WA rural investments... the grass is not greener going far afield and especially to the mid west .. were renter demographics are nothing like were your at.. Are you investing up river or down river...?  I bet Yakima has some good lower end stuff as well. And the Tri cities is pretty hot ... You live in one of the neatest places in the US don't take it for granted  LOL

Thanks @Jay Hinrichs  !  I am investing up river.  Did a couple mobiles in Rock Island down river when I was first getting started.  Makes me feel a lot better, your encouragement.  You're probably right. Yakima and the Tri-cities are both great suggestions I haven't thought of and may look into.  Maybe Spokane? I know more people there.   I love Oregon as well, by the way.  You, too, are in a beautiful area and we need to appreciate that.  I have family and friends in OR and love to visit whenever I can.   

@Steve Vaughan  

  you can't argue with 300 days of sunshine a year  4 nice seasons  NO HUMIDITY NO bugs and other creepy crawlys..... Lake Chelan 45 minutes away national forest the big river.. Seattle if you need it.  Leavenworth for some German culture.. Wineries ... Apples farm produce ... house boating.. fishing.. hunting. skiing you name it were you live its all within an hours drive.. A little windy and sometimes a little dusty but hey no place is perfect right.  Plus a great airport which I like to fly into.. I love coming in from the south.. Also like to land at the Chelan airport up on the plateau there.. take the ferry to Stehekan.. Many would kill for your life style  .> I have a good friend from Portland that moved there a few years ago and is developing there and doing nicely.  People that live in the flat lands have no clue how off the charts great it is on the east slope of the Cascades  they just don't. Forget about real estate you got to live your life....

@Albert Bui, @Steve Vaughan, Since you guys are considering checking out out of state markets from where you are located and perhaps have heard the buzz about Indy's market?  I just wanted to add my 2 cents as an agent in Indianapolis.  I work for a full service brokerage in Indy that focuses on Investment Properties (FS HOUSES) where the owners run a property management company as well as own rentals themselves.  Basically we are a one stop shop for out of state investors and strive to be excellent in all areas of our business.  There is a lot of knowledge and experience with our group and we are really focusing on growing our out of state investor clientel.  I would love to talk with you more about our operation and give you more information about what we are doing here in Indy.  You can also get some info from @Joel Aguilar about his recent experience with our company.  We definitely encourage you to come out and see it for yourself and meet the team!  PM me for more info! And HAppy Hunting!

@Jay Hinrichs  

Hey Jay,

My brother and I own about 12 single families in NW Portland.  We timed it pretty well with the downturn.  Anyway, our strategy has been get 30 year bank financing and just wait for our tenants to pay it off as we raise rents.  We just purchased a 4 plex as well that we are looking to get that bank financing on.

Anyway, I have been looking at other markets quite a bit lately, especially Boise since I've got some family out there who I think would be interested in getting involved.  We've got the capital we need to invest, but we just are finding the buy and hold opportunities here in Portland.  I'd love to hear your thoughts on what you might do in our situation.  Shoot me an email or a PM if you think you could help us out.

Cheers!

Chris

@Albert Bui  

Yes, whenever the markets dictate that a move is necessary.  I'm constantly evaluating two or three other markets outside of the one I'm currently investing in.  But, your question depends on your particular investment strategy.  If you follow real estate cycles, the cycle should dictate your movement (moving capital from markets reaching a peak to those in expansion phase).

Lindahl says, and I concur, an essential component of building wealth requires the attentive movement of capital from one market to another. 

@Jennifer Roberts  , thank you for introducing yourself.  By FS Houses, do you mean SF houses or is that something different?  I like the idea of the PM also being an investor that owns rentals themselves.  That's critical!

@Account Closed   , I agree. It's identifying where the expansion cycles are vs the peaks that's the tough part, right? Do you mostly look at macro economic factors for your area of interest?  Job growth, population growth, businesses coming and going?  Thanks  

@Steve Vaughan  

I don't believe there's a tough part. It just takes work and accurate information to make good decisions.  No, I look at mostly micro economic factors... there is no "national market".  Each market is unique and there are many variables impacting them that you must understand, so of which you've sited above.

@Steve Vaughan,

I can see where that could have been confusing!  The name of our Turn Key Full Service Brokerage is FS Houses.  Please pm me for more info with a working email address.

I live in Northern Virginia, the numbers simply don't work here. I know a lot of investors that go to Maryland or DC to invest. Most areas in Maryland aren't too far away according to a map, but the greater DC area has some of the worst traffic in the nation and the longest commute time; that makes daily travel a joke. From those I've talked to, most people partner or have crews they trust and regularly check in on. The laws are also extremely different in VA and MD so it's important to make sure you have people who know how to do what they need to do in compliance with those state laws.

I think moving around states is great, because what state is the 'best' at any given time for investing often differs. Plus diversification never hurt. Owning in different states isn't too dramatic for taxes, nothing undoable by any means.

My theory is always stay fluid with the markets so you can always be sure you are getting the best returns.

@Ali Boone  How right you are...and you are not the only investor from California that agrees with what you said.  We have many that we work with from California, and other States, because their state can't support their exit strategy.  High cost of buying makes holding for cash flow difficult at volume.  You can't carry financing when the house costs over $200k, unless you can rent it for almost $3k...and that would make you less in cash flow than the two or three houses in Michigan you could buy with that same $200k.  Each one of those houses usually has a higher cash flow than the one house in California.

Their M.O. is usually the same.  Flip in California...buy to hold in Michigan.  The key is you have to have "boots on the ground" in the "other" state of choice,...and a great PM.

Joe Villeneuve
REcapSystem
A2REIC

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