Out Of State Investing

Buying & Selling Real Estate
8yFollow

Out Of State Investing

John Harris
Richmond , CA · Member since 2016 · 20 posts · 9 votes

Hello BP community
 

I Wanted to take the opportunity to see what advice anyone had to offer on investing in Out of state markets. I currently live in a hot market (the SF-Bay Area) , where finding property isn't an impossible task but just unlikely to meet ones goals just starting out  in today's market climate without High income or moving to an undesirable location.With this  also will be my First deal so I am just trying to do my Due Diligence and reach out to the masses and get an opinion . Also I have the book on Long-Distance Real Estate Investing (along with many other real estate books From referrals and Podcast mentions) which on shed light on the pros and cons of out of state investing and now would like to put it to the test, being that I have about 50k to invest and looking to starting obtaining my real estate goals. So with a brief overview, the bottom-line  to where I'd like to get input on is...

-what are your opinions about markets  such as Cleveland,OH and Memphis,TN?

-Pros and Cons on personal experiences?

2Reply
74 views

Most Popular Reply

Matt Stewart
Flipper/Rehabber · Pickerington, OH · Member since 2012 · 230 posts · 139 votes
8y

@John Harris

I'm looking at your post from the other side of things. I'm fortunate enough to live in an area where a lot of out of state investors are finding opportunity. And so I work with a few investors who are investing in the central Ohio (Columbus) area. It's vital that you put together a team(boots on the ground) local to the area. At the risk of ruffling some feathers, Realtors are a dime a dozen in this town. But a buyer's agent who truly understands the market and can recognize a good deal when they see it instead of just wanting to earn a commission is priceless. That being said the best deals aren't coming off the MLS, which means even an excellent Realtor isn't going to be much help. I'm finding deals at 25% of ARV off market. So then the next member of your team needs to be someone who can determine how much it's going to cost you to bring that property up to full ARV and can get it done on time and on budget. Because it's not unusual to find a property for $20k that needs $100k and 6 months or more worth of work.

Bottom line, surround yourself with good people who understand the market you want to invest in.

8Reply
See this reply in the discussion

51 Replies

Jump to latestLatest
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    8y
    Originally posted by @Angela Yan:

    I am from SF and currently in Columbus checking out the area.  Contact me and I would be happy to talk off forum.  All in all so good and glad I came out.  First and for most before an y deals, one needs to build relationships.  I have formed one with a broker out here and working with an agent and also about to meet a PM tomorrow.  I feel like if the team building goes well then the rest should follow like the Out of State Investment book points out. 

    Pleasure to be working with you Angela! 

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
    WebsiteView Page
    0Reply
  • John Harris
    OP
    Richmond , CA · Member since 2016 · 20 posts · 9 votes
    8y

    @Ken D. chose those too just seeing those location in other forums which lead me to look into those markets

    0Reply
  • John Harris
    OP
    Richmond , CA · Member since 2016 · 20 posts · 9 votes
    8y

    @Elizabeth Wilson most definitely  will take @Federico Gutierrez advice on visiting markets first in which i plan to invest before jumping into  something without proper DD. I have family in Memphis and  was just going to get there take on how the area is in certain places but will also utilize your offer to lend some advice thank you !

    2Reply
  • John Harris
    OP
    Richmond , CA · Member since 2016 · 20 posts · 9 votes
    8y

    @Jay Hinrichs thank your for your insight its shed light on things that every investor should consider. Im all ears to advice from people who dont mind telling to good stories along with the bad give me the perfect opportunity to learn and apply some better methods

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @John Harris:

    @Jay Hinrichs thank your for your insight its shed light on things that every investor should consider. Im all ears to advice from people who dont mind telling to good stories along with the bad give me the perfect opportunity to learn and apply some better methods

     Look no farther than Richmond there are great opportunities there.. especially infill.  I have been buying lots there.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • John Harris
    OP
    Richmond , CA · Member since 2016 · 20 posts · 9 votes
    8y

    @Robert Ellis and thats exactly the connections i hope to make at this starting point now finding the RIGHT people. after chatting with briefly @Angela Yan seems that shes gotten started on a good foot with the property she chose. Just searching for the right "boots on the Ground" like she has 

    1Reply
  • John Harris
    OP
    Richmond , CA · Member since 2016 · 20 posts · 9 votes
    8y
    Originally posted by @Jay Hinrichs:
    Originally posted by @John Harris:

    @Jay Hinrichs thank your for your insight its shed light on things that every investor should consider. Im all ears to advice from people who dont mind telling to good stories along with the bad give me the perfect opportunity to learn and apply some better methods

     Look no farther than Richmond there are great opportunities there.. especially infill.  I have been buying lots there.

     @Jay Hinrichs Yea its one my goals to buy in a couple areas such as richmond and Oakland... If u dont mind me asking are you planning on developing as you mentioned before on ground up projects?

    0Reply
  • John Harris
    OP
    Richmond , CA · Member since 2016 · 20 posts · 9 votes
    8y
    Originally posted by @Ian Walsh:

    Is there any reason you aren't looking locally?

    Im trying to get into multifamily using the house hack method... being that i live in the Bay Area and even duplexes on the MLS are lowest 450k with low rents..it doesnt make the lender confident when you not making High income. trust me id love to invest right in my own backyard.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @John Harris  build infill to exit at 350k range.. 50% less than the cheapest homes in the bay area.. those areas will change over time .. just like other areas of the bay area went from war zones to owner occ.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Elizabeth Wilson
    Real Estate Investor · Memphis, TN · Member since 2016 · 940 posts · 695 votes
    8y

    @John Harris - If you have family in Memphis, that is a great reason to invest here.  You can write off your travels to visit and you can have family eyes on your property when you aren't around.  We do this on our other rentals across the state.  It is awesome!

    0Reply
  • John Harris
    OP
    Richmond , CA · Member since 2016 · 20 posts · 9 votes
    8y
    Originally posted by @Jay Hinrichs:

    @John Harris  build infill to exit at 350k range.. 50% less than the cheapest homes in the bay area.. those areas will change over time .. just like other areas of the bay area went from war zones to owner occ.

     sounds interesting How do i inquire on learning more about this strategy? 

    because I have most definitely been witness to the change that is occurring and better late than never- just decided a little over a year ago to get in on the action and learn this business of Real estate

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    8y
    John Harris what you are doing going to 2-4 makes logical sense because the cashflow is better. But as someone is is currently trying to unload their turnkey sfh portfolio to go into better bigger deals... it’s hard to sell these 900+ dollar a month rentals to retail buyers. It’s a lot lot lot hard to sell those small mfhs.
    3Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    8y

    @John Harris You may want to connect with @Ali Boone. She specializes in this area and has wrote extensively on the subject for the BP blog. Good luck! 

    0Reply
  • Terry Burwell
    Lender · Greenville, SC · Member since 2014 · 12 posts · 3 votes
    8y

    I have been investing in Memphis over the last 5 years with Midsouth Homebuyers while being out-of-state. I keep wanting to branch out to other areas more local or familiar to me, but the numbers keep me coming back to Memphis. I can share my numbers with you if you are interested. 

    2Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    8y
    Originally posted by @Rachel H.:

    @John Harris You may want to connect with @Ali Boone. She specializes in this area and has wrote extensively on the subject for the BP blog. Good luck! 

    Thanks Rachel! :) John, happy to chat anytime!

    1Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    8y
    Originally posted by @John Harris:

    @Robert Ellis and thats exactly the connections i hope to make at this starting point now finding the RIGHT people. after chatting with briefly @Angela Yan seems that shes gotten started on a good foot with the property she chose. Just searching for the right "boots on the Ground" like she has 

     I look forward to hearing from you.  

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
    WebsiteView Page
    0Reply
  • Rob Gillespie
    Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
    8y

    Hey John,

    I personally like Cleveland because that is where I have done business for 20 plus years. 

    It is all about your team. If you have good boots on the ground you will be fine, but if you are 

    alone investing 3000 miles away, it can be terrible wherever you choose. 

    Have you considered buying  a mortgage instead of a house?

    I have been selling as many notes to out of state folks as I have houses. They are a little easier to deal with, 

    no toilets, tenants or trash and you can still get 15% or better annual ROI.

    I would just buy performing and only buy 1st position. 

     Just remember you will run out of money before you run out of deals! Take your time and do your homework!

    That is my 2 cents. 

    Good luck in whatever ya do!

    0Reply
  • Jennifer WardPro Member
    Investor · Denver, CO · Member since 2017 · 94 posts · 42 votes
    8y

    I am using this discussion to request for your input in which city I should primarily focus in for out of state investing for buy and holds. I have been doing extensive research and I came up with the below table of various factors I believe are important to compare. I converted the data to percentages. Of course this data is not perfect but based on the numbers below which city would you invest in first?

    Cityrent to value (higher is better)rent to income (lower is better)taxes to value (lower is better)insurance to value (lower is better)Avg Annual Appreciation (higher is better)unemployment (lower is better)Crime/US Avg: 280 (lower is better)population growth (higher is better)
    Atlanta0.4121.10.412.29%6.15911.98
    Cleveland12.422.21.19-1%6.3847-0.52
    Memphis0.882.21.841.170.827.3802-0.27
    Kansas City0.581.671.360.811.855.27070.22
    Indianapolis0.651.871.080.731%4.46490.33
    Minneapolis0.391.651.280.512.825.85590.86
    2Reply
  • Rylan Zwanziger
    Nashua, IA · Member since 2016 · 6 posts · 4 votes
    8y

    @Jennifer Ward Great breakdown!  I have been looking into a lot of the same markets you just listed.  For me I think Indy is the best fit. 

    0Reply
  • Account Closed
    Investor · Leander, TX · Member since 2016 · 299 posts · 402 votes
    8y

    Im in the Atlanta and Cleveland markets from Texas and have enjoyed the fruits of out of state real estate with 6.08% yields on a couple of properties after 2 years and 14.07% YTD. 

    Looking for more in Atlanta, with a new house being built as we speak in East Point, GA. near the airport.

    0Reply
  • Brian Garlington
    Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
    8y

    @John Harris

    I am partial to the Cleveland Market......but of course that's because I have 3 rentals there now as well. All meet the 3 percent rule and are in C areas

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    8y
    Atlanta Birmingham Indianapolis
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free