What states would you recommend a newbie whose trying to get into out-of-state RE investing?
8 Replies
Daigo Kurosaki from Walnut, California
posted about 3 years agoI'm an amateur RE investor, but I'm trying to get more into investing this year. Only problem is that I live in a pretty expensive area (LA), & I can't afford buying too much here.
I want to buy a few MFRs out-of-state, but I'm obviously nervous and unsure of where the better markets are, especially as an amateur like me. I'm definitely willing to take some risk, but overall, I'm afraid I'll be taken for a ride by some agent and then my money will be washed down the drain :(
Ideally, I'm looking to buy 2-3 MFRs for 40-70k, and have them managed by a communicative and competent PM company. I would love to hear your guys' thoughts on what cities/states I should look into that would provide the best cash-on-cash ROI for my budget & level of experience.
Jay Hinrichs Developer, Real Estate Broker, from Lake Oswego, Oregon
replied about 3 years agoI believe that price point for a multi family IE 40 to 70k will put you square in the middle of C or D class.. which will have greater risk compared to better neighborhoods. You may want to check closely into this.. If your buying existing multi you should be able to get Actual numbers from past years performance this helps greatly determining the future.
Elizabeth Colegrove from Hanford, California
replied about 3 years agoMake sure you watch the taxes and insurance costs from whatever state you pick!
Also look at long term value and market potential.
Daigo Kurosaki from Walnut, California
replied about 3 years agoThanks for the advice @Jay Hinrichs . At what price point do you think I would be able to get into the "B" class of MFRs? And what states would that be?
Instead of buying 2-3 MFRs for 40-70k, I could change my strategy and instead start looking for 1-2 slightly nicer MFRs. The last thing I want is to own 3 MFRs in a criminal-ridden neighborhood :)
Daigo Kurosaki from Walnut, California
replied about 3 years agoVery helpful and useful tips, @Elizabeth Colegrove !
I have a quick question: how do you evaluate long-term value and market potential for out-of-state cities? Are there any tools/searches/websites that you would recommend?
It's hard enough for me to understand what areas Near me are going to be up-and-coming :) I'm curious how someone more experienced goes about analyzing long-term value and market potential. It's definitely something I struggle with.
Joe Villeneuve from Plymouth, Michigan
replied about 3 years agoI work with a number of investors from CA here in Michigan
Paul Timmins from Boston, Massachusetts
replied about 3 years agoTo find out about an area go to IREM.org search for ARM certified property managers. Call 5 ask them what parts of the city they like/dislike and why. Ask them what they see expenses running per category per unit. What do they see them selling for per unit, what is the market occupancy rate. What are the market rents? Ask them if they know anything coming up for sale. Great way to pick up some good info and possibly a deal.
You can also search NARPM.org for the RMP (Residential Management Professional) and MPM (Master Property Manager) certified.
Paul
Daigo Kurosaki from Walnut, California
replied about 3 years agoWow, thank you Account Closed - very helpful link!
Jerry Padilla from Rochester, New York
replied about 3 years agoCheck out @Jay Hinrichs and @Brie Schmidt website that does reviews for out of state investors on property management. @James Wise is a good connection to have and deals with a lot of out of state investors.
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