Newbie looking to invest in either Kansas or Indy

10 Replies

Hello all,

After much reading (lots of BP books, etc.) - my wife and I have finally decided to get on board with REI. We currently live in the NE (NJ) where it's almost impossible to cashflow. We are starting to think heavily on investing out-of-state. We played with the idea of investing in Pittsburgh and now are looking more towards the midwest - mainly the Kansas or Indianapolis areas. We are just a little nervous about out-of-state investing (especially since we are beginner investors).

I would love to discuss more with any investors in these areas (especially if you are also an out-of-state investor).

Thanks for the time!

Adam

Hi @Adam S. Welcome to BiggerPockets. It can seem daunting to think about investing out of state but as you said, you are finding it next to impossible to cashflow where you are. So it's a good idea to look at other markets. As long as you have people in place that you have vetted, and they know the area and market very well, and can offer sound advice, you should be fine. My advice is to do your homework and reach out to those that know the areas you are interested in investing. Perhaps first looking at some of the bigger contributors to the forums and reading what they are saying, then if you like what you see, reach out to them. I'm curious about what you thought about Pittsburgh. Feel free to reach out to me if you would like to talk more...Thanks, Gary

@Adam S. I have worked with hundreds of local and out of state investors here in Pittsburgh. The one tip I could give you when you plan to invest out of state is to move very slowly and get to know the market. Focus on getting to know the market and make a couple trips before you decide to pull the trigger. Buy something small at first and just dip your toe in the water before diving in. Always have a contingency and exit strategy to limit your exposure and finally for sure create an LLC or other entity for asset protection. Good luck to you

We are doing a lot in Indy.  Happy to answer any questions via PM.

Adam-

My uncle and I had the same issue as you. We actually live in Boise, ID but work in Ohio. Over the last two years we have created a great system for cash flow in this market. The returns are insanely good but the management is insanely important. To get these kinds of returns 30%+ you really just can’t allow any company manage the properties- especially if you’re out of state. When a property manager or realtor hears that it’s like blood in the water.

We actually bought a house in this market and we commute back and forth. We built our own property management/maintenance company from the ground up so that it was done the way we wanted it done. We are not your typical out of state investors though. We have a lot of our Idaho friends who now invest with us- partnering on deals because they are in the same tough spot you are in. If you are interested in hitting the ground running or just want more info give me a call and we can set up a meeting. We have deals that you can partner on for as little as $10k as well as multi-million dollar apartment complex deals you can participate in. Two zero eight five four six two six one zero.

Tony Napier

@Adam S. I have been investing out of state since 2012, much of it in Indianapolis . I can tell you that the difficulty and risk can vary greatly depending on the team you select or put together. For example working with the right turnkey company can be the easiest and lowest upfront risk way to get started in a market, as you don't close on the house until a complete rehab is done, and you have a 3rd party professional inspection completed. You can leverage with a conventional loan (20-25% down), and will have the property fully appraised prior to closing. On the downside buying turnkey this way means you will likely by at or near market value - ie retail, so has less potential for returns for buying something distressed for cash, where you do the rehab (ie: contract for the work) and you carry all the upfront risk. This latter method also referred to as BRRRR (when including a cash out refinance) is tons more involved and harder to do from a distance. Something almost always goes unexpectedly in these BRRRRs

Regardless of how you decide to invest, be sure to visit the market at least once and meet with any core team members you are considering working with before you close on a deal.  Build trust and relationship over time.

Originally posted by @Adam S. :

Hello all,

After much reading (lots of BP books, etc.) - my wife and I have finally decided to get on board with REI. We currently live in the NE (NJ) where it's almost impossible to cashflow. We are starting to think heavily on investing out-of-state. We played with the idea of investing in Pittsburgh and now are looking more towards the midwest - mainly the Kansas or Indianapolis areas. We are just a little nervous about out-of-state investing (especially since we are beginner investors).

I would love to discuss more with any investors in these areas (especially if you are also an out-of-state investor).

Thanks for the time!

Adam

 That's a great idea! Investing in the Midwest is great right now. Prices are still very low and you can find some amazing ROIs. Have you looked much into using a Turnkey Company? They can make investing OOS much easier for someone who doesn't have the time to flip or manage the property on their own. 

Try looking at:

What to Ask When Working With a Turnkey Provider

and

The Best Types of Markets for Profitable Turnkey Properties

Hi Adam, Indianapolis is an amazing market.  I invested in San Diego, Phoenix, Cleveland and other cities then finally moved to Indy were I had pegged as the best market for cashflow.  I should have moved here earlier, I've done over 100 deals in 2 years and on pace to do well over 100 this year alone.  I provide turnkey properties to out of state investors also.  I would be happy to share a list of B class areas, awesome neighborhood map and more info on Why Indianapolis.  I hope this will benefit you.

@Ryan Moeller Can you send me some info on what you've got and what services you provide there?

Originally posted by @Adam S. :

Hello all,

After much reading (lots of BP books, etc.) - my wife and I have finally decided to get on board with REI. We currently live in the NE (NJ) where it's almost impossible to cashflow. We are starting to think heavily on investing out-of-state. We played with the idea of investing in Pittsburgh and now are looking more towards the midwest - mainly the Kansas or Indianapolis areas. We are just a little nervous about out-of-state investing (especially since we are beginner investors).

I would love to discuss more with any investors in these areas (especially if you are also an out-of-state investor).

Thanks for the time!

Adam

 Welcome to the site Adam.

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