Investor · San Diego, CA · Member since 2015 · 20 posts · 2 votes
Hi-
Living in San Diego, I've decided that I want to pursue a portfolio of rentals out of state. I'm mainly seeking supplemental cash flow so multi-unit properties seem the most obvious to me, but open to other suggestions. What are areas of the country that others have had success with and positive cash flow deals are easily attained? Given that I want to purchase several sub 100k properties in the same area, finding one "super" deal isn't as important as finding an area that offers many "good" deals.
I'd appreciate any recommendations, or if anyone has info on a portfolio for sale I'd be interested in information. Thanks.
1. pick a couple of cities in the US, with a healthy economy and where you have connections
2. Start reviewing home prices. Any place where you can get 3BR, 2BA houses for under 150k usually is a good market to start building a rental portfolio
3. Compare rental rates in the interested cities. Any area where the monthly rental rate is above 1% of the sale price (i.e. 1500 per month for a 150k home), then most likely you'll cash flow positively
Cities that are doing well are, parts of Denver, CO, Kansas City, MO/KS, Dallas, Houston, San Antonio, TX Upstate NY, further parts of Seattle - Olympia etc, parts of Indiana, certain parts of Arizona.
Here's the thing about high rent-ratio states. You have a certain window to act on high rent-ratio states. Pretty soon every investor is on it and you lose the advantage.
Real Estate Broker / General Contractor / Property Manager · Kansas City, MO · Member since 2010 · 395 posts · 425 votes
10y
@Sam Smith, you are correct. Prices are rising in Kansas City. They are also rising in every other market as well. What makes KC and other midwest cities such good places to invest for cash flow, is that our price increases and decreases are much more gradual than they are on the coasts AND our rental rates more closely match those price increases and decreases. You may be paying more today for a property than you would have 3 years ago, but you will also get more rent now.