Gresham, OR · Member since 2017 · 25 posts · 7 votes
Hi Everyone,
I would like to get your thoughts on cash flowing areas right now, outside of the big markets. It's almost impossible to cash flow anything in the Portland metro area right now, and that includes the outskirts! I have read a lot about the idea of investing out of state, but I wanted to hear if any of you have any specific city/state you've had good luck with recently. I have no limitations as long as I can get some good deals that will cash flow. I'm looking for a 100k property on a fouplex. Don't laugh! : ) I was just researching New Jersey and there seems to be good deals out in that area and rents are very good. Property taxes maybe high, however.
Any recommendation on where I should start researching?
Flipper/Rehabber · South Jordan, UT · Member since 2016 · 142 posts · 37 votes
8y
Howdy
I personally invest in Utah - my home state and where all of my current rentals were purchased many years ago, so not as relevant. I also invested in rentals in Indianapolis between 2014 and 2016 but was getting priced out of the are, meaning to get the higher returns I was being forced into rougher areas and chose to quit buying there.
Currently I buy in Michigan, my properties are hitting a true net return in the 8.5% to 12% range. If your going to buy in any market other than your home then it's homework, homework and more homework. Good contacts will speed up your process and help with your success. I went through multiple management companies, contractors, realtors, etc.... to find the few good ones that I have.
Probably the most important ingredient is the property manager, they can make or break your out of state investment. I would start by researching an area that is in an upswing and then start seeking out a good P.M., then once you find a good P.M. or any other piece of the puzzle I would hit them up for referrals as birds of a feather tend to flock together.
This reminds me of the first quality person I encountered in Detroit, he was and is a realtor who has always been up front and honest. He introduced me to two great P.M.'s and an excellent contractor. From there the contacts simply grew and grew, not saying the weeding out process stopped, not at all. You really need to keep your guard up when dealing with new contacts. If you're interested in Michigan I'd be glad to chat.
Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
8y
Jay is right about Northwest Indiana. It's a great area for rentals. You have Illinois people who are moving across the border to Indiana, because the cost of living is far less than Illinois. Rents are lower in Indiana, but so are home prices. The taxes in Indiana are far lower than Illinois. I've sold SFR's in the $80-$100k range, where the taxes are only $600-$1400 a year. The competition out here is getting worse by the day. But there are still deals to be had. Hammond and East Chicago are areas to consider. But these 2 cities also have certain areas that you need to stay away from. Small multi units can be very profitable. Just stay away from Gary! Someone mentioned property management. If you don't have quality property management, you have nothing. Especially in the lower to middle income areas. It's of the utmost importance that you place quality tenants in your properties. The property manager needs to check out each and every tenant extensively. You can have the best deal in the world. But if you have lousy management, you have nothing.
Investor/RE Broker · Eugene, OR · Member since 2014 · 3k+ posts · 968 votes
8y
@Rocky Pe Benito I am a little south of you in Eugene, and have been investing out of state for some time now. Like Jay said, expecting to do well with a fourplex at $100k is going to get you in more trouble than you can imagine right now. When focusing on the midwest and some southeast markets you may be better off looking at SFR with rents that will get $850-$900 and up. SFR are the predominant stock for most of the renters in many of these markets. Like Jay & Scott, I also like NW Indiana. But it is all about working with the right team there or anywhere else.