Just another what would you do?

Question

I want to start out by first saying thank you BP for providing a platform for the new and uninformed like myself to ask questions during the starting out phase.

Scenario: I am currently refinancing 2 properties I have (1 rental / 1 primary) to pull money out for a down payment on my next property and gain positive cashflow on my rental.  We will be pulling $40k +/- out and intent to reinvest it.

Problem: While we would love to stay local and try our hand at managing our own place we live in Camas, WA (near Portland, OR) and housing prices are rather high that wouldn't allow for much with only $40k down.

Goals: Invest for cashflow in an area that has a strong economy and has a positive outlook in the job market for the foreseeable future.

Possibilities: Wait and save a bigger down payment for a better local property, purchase a lower end property in the Vancouver, WA area that produces little cashflow but can benefit from Portland's growth, or invest out of state with a turnkey company.

I am leaning towards the out of state option as I may even have enough to purchase more than one property but my wife gets a little nervous investing in an area that we don't or have never lived.  I would love to hear the communities thoughts on this, can anyone help guide my decision???

Kevin E. · Answer

@JR Hinds I am definitely more focused on cashflow and don't have the kind of down payment required for west coast rentals. I would love to share research and visions with others in the same boat, though it would probably have to wait until summer break. I have stretched myself pretty thin for now: twin toddlers, school (MBA), full time job, and 4 y/o in little league. Some call me crazy but I figure work hard early to play hard later!

Elliot Smith · Answer

Kevin,

I am finding cash flowing multi family's in Vancouver. Just have to look and they are not on the MLS I am putting 2 under contract today that should get $250+ a door After PITI.

feel free to reach out if you want to talk.

Larry Fried · Answer

Exactly, the West coast is tough because it is beautiful and has so much to offer and people want to live here driving purchase prices up and rent to purchase ratios down.  So, off we West Coast investors go to find more cash flow friendly markets. Quick, somebody give me a horse and a sunset to make this Western picture complete...yah!

JR Hinds · Answer

It depends if your main motivation is cashflow, appreciation, or a blend. Some people are really attracted to appreciation, so Portland is probably a good market. For people who are really attracted to cashflow, the midwest is probably better. And if you want a blend of the two, you'll have to do a little more work to find an area that works.

I'm in the same boat and I'd be happy to chat with you about what I've found so far.

Kevin E. · Answer

@Larry Fried your posts on each of the threads I created are much appreciated. This west coast is a tough area for buy and hold cashflow investing!

Larry Fried · Answer

@Kevin Elwood

You asked, what I would do, and as someone who lives in Eugene, OR, I am invested in turnkey out of state properties, so that is what I have done and would do.  And with the money you have to leverage you could probably get two properties with good passive cash flow.  Your other options are fine if you want to play the appreciation came and don't need the cash flow or want to be much more hands on in your property investments.  Higher risk, higher demands on you, but potentially greater rewards.  Only you can decide.

Micah Copeland · Answer

@Kevin Elwood

You gave 3 different scenarios and depending on who you ask you will get 3 different answers. I personally would not invest in anything I can't drive to within an hour. Shoot I wouldn't even wholesale anything I couldn't get to within an hour (unless it was for a substantial profit). I would pick a farm market that is within an hour drive and farm away. I wouldn't worry about the lower cost of the properties personally, even though a lot of investors do, since I tend to not see a property as an actual house but more so I see the numbers the house represents.