Wanting to Invest Out of State by End of Year

265 Replies

Hi!


So I've been listening to a lot of podcasts and following the forums. I'm from the Bay Area, California and since prices are crazy here I'd like to invest out of state. I have this goal of acquiring a property before end of the year.

This is what I've researched are the steps:
Look for potential markets, study the macro economics

  • Research neighborhoods. Understand A/B/C class neighborhoods and what we want to invest in
  • Check safety/crime, schools, things to do
  • Check if state is landlord friendly or tenant friendly
  • Check regulations within each state
  • Check if properties fit 1% rule and run analysis on numbers
  • Narrow to 2-3 markets. Meet people and ask questions, find some people in the market.

Look for your team:

  • Insurance
  • Lender
  • Agent
  • Property Manager
  • Only do a deal if you have someone boots on the ground

Since it seems like housing prices are pretty high right now (and the market could crash?) I was thinking maybe invest in the Midwest for my first property as from my understanding these properties are better for cash flow, worse for appreciation, which means maybe value won't go up or down too much? I just want to pull the trigger on a property and learn from the process ASAP. So pretty much I was thinking Kansas City or Indianapolis for properties, or something like that. I just don't know the areas well. What do you guys think about this?

I was thinking of looking in the 60k - 100k range for my first property. Putting a 20% down payment on one of these wouldn't be that big of a deal for me. I would love to look for my team perhaps through these forums, and I'd love to fly out and check out the neighborhoods. Any advice for neighborhoods and anyone know people who I can work with?

Thanks so much!
Sharon

@Sharon Tseung

You might be a little too late to the party to find properties at the 1% RV that rent for at least 900 a month. In my experience, anything less will be tough to handle.

Let me know if you have specific questions.

@Sharon Tseung wasap Sharon. I’m in the bay too. The market has rainsed substantially especially in the Bay Area. Let me know if you need help in your search.
Oops. I missed the Kansas City part. 🤦🏻‍♂️🙇🏻‍♂️

@Sharon Tseung I  see alot of properties in Indianapolis every week.  If you have questions regarding areas, price points, or anything else - feel free to reach out.  I'll help if I can. 

This post has been removed.

@Sharon Tseung I would recommend investing where you can easily visit. There are many times when you need to get to the site ASAP. If you got a team that you trust, that would alleviate the pressure. People do well in out of state investing, but only with a strong foundation.
Originally posted by @Jeff Schechter :

@Sharon Tseung - happy to answer any questions about the Indy market.  Feel free to PM me.

 Sounds great I will reach out!

Originally posted by @Ritch Bonisa :

@Sharon Tseung I  see alot of properties in Indianapolis every week.  If you have questions regarding areas, price points, or anything else - feel free to reach out.  I'll help if I can. 

 Awesome just sent a connection request. Thanks!

Hi @Sharon Tseung ,

I am in literally the same exact situation as yourself. Hoping to finally take the leap and purchase my first rental property at the start of 2019. I've pretty much given up on finding anything local and want to focus in the midwest as well. Good luck with your endeavors!

Peter

Originally posted by @Peter Li :

Hi @Sharon Tseung,

I am in literally the same exact situation as yourself. Hoping to finally take the leap and purchase my first rental property at the start of 2019. I've pretty much given up on finding anything local and want to focus in the midwest as well. Good luck with your endeavors!

Peter

 Oh sweet! Let's connect!

@Sharon Tseung Hello Sharon, although I can’t really help much, I would love to stay connected since it looks like we have very similar goals. Good luck!
Hi @Sharon Tseung , I live in Long Beach and literally have exactly the same goal of getting started before the end of the year! I've been reading/listening to a bunch of the podcasts and trying to learn as much as I can for the past couple months. I did some analysis of the macro markets around the US (as of last year bc that was the most recent data I could find for some places) that I was planning to share on here shortly so I'll tag you when I do that. I had sort of decided on the Indianapolis metro area to start looking at neighborhoods but the Houston metro area also came up pretty close. Best of luck to you and keep in touch! -Henry
Originally posted by @Nolan Podbielski :
@Sharon Tseung Hello Sharon, although I can’t really help much, I would love to stay connected since it looks like we have very similar goals. Good luck!

 Awesome! Definitely down to connect! :)

Originally posted by @Henry Murray :
Hi @Sharon Tseung, I live in Long Beach and literally have exactly the same goal of getting started before the end of the year! I've been reading/listening to a bunch of the podcasts and trying to learn as much as I can for the past couple months. I did some analysis of the macro markets around the US (as of last year bc that was the most recent data I could find for some places) that I was planning to share on here shortly so I'll tag you when I do that. I had sort of decided on the Indianapolis metro area to start looking at neighborhoods but the Houston metro area also came up pretty close. Best of luck to you and keep in touch! -Henry

Nice to meet you and let's definitely connect! Oh interesting, does Houston work for the 1% rule? My friend is from there who I study real estate stuff with, so it could be good for me to look into that market.

Join the Houston real estate investors group on Facebook. Contract assignments get posted very quickly and you can see what kind of numbers people are putting up. The Dallas group is very active as well. There are also a couple of Bigger Pockets episodes with Houston investors, one of whom does turnkey rental properties. I don't recall the specific episode numbers though. And of course, there's the David Green book on long distance investing.

@Sharon Tseung As a fellow West Coaster, I've been investing out of state since 2012.  It can definitely work, but markets have grown tighter all over, so you have to be extra diligent and make sure you are okay with some lower returns than you could have gotten even 2 years ago.  Also the 1% rule is a good eliminator rule, but don't stop there.  For example getting 1% rent in one area with low property taxes (say Kansas City) is very different from 1% rent in a high tax area, like Houston or anywhere in TX.

Originally posted by @Jason Hall :

Join the Houston real estate investors group on Facebook. Contract assignments get posted very quickly and you can see what kind of numbers people are putting up. The Dallas group is very active as well. There are also a couple of Bigger Pockets episodes with Houston investors, one of whom does turnkey rental properties. I don't recall the specific episode numbers though. And of course, there's the David Green book on long distance investing.

Good to know, will do, thanks! 

Originally posted by @Larry F. :

@Sharon Tseung As a fellow West Coaster, I've been investing out of state since 2012.  It can definitely work, but markets have grown tighter all over, so you have to be extra diligent and make sure you are okay with some lower returns than you could have gotten even 2 years ago.  Also the 1% rule is a good eliminator rule, but don't stop there.  For example getting 1% rent in one area with low property taxes (say Kansas City) is very different from 1% rent in a high tax area, like Houston or anywhere in TX.

 Interesting, thanks for the input. Are you still investing now or are you waiting for a crash?

Originally posted by @Sharon Tseung :
Originally posted by @Larry F.:

@Sharon Tseung As a fellow West Coaster, I've been investing out of state since 2012.  It can definitely work, but markets have grown tighter all over, so you have to be extra diligent and make sure you are okay with some lower returns than you could have gotten even 2 years ago.  Also the 1% rule is a good eliminator rule, but don't stop there.  For example getting 1% rent in one area with low property taxes (say Kansas City) is very different from 1% rent in a high tax area, like Houston or anywhere in TX.

 Interesting, thanks for the input. Are you still investing now or are you waiting for a crash?

I am definitely not waiting for a crash, as I think that is a fool's errand. A pull back in some areas is much more likely. I continue exploring various methods of REI including the more passive ones I explore in my blog article Three Key Routes for Passive Real Estate Investing

@Sharon Tseung

I invest from LA in Kansas City. The market is hot there right now but I am a big proponent of learning by doing! Things aren't real until you do them. MF is especially hot in KC right now but there are a decent number of duplexes to be had. I would go for a duplex over a SF for your first, just because it brings in so much more cash and it's way easier to make the numbers work. Everyone has to find the right thing for them though, and you'll figure out what the right thing is for you! 

If you buy right you don't need to wait for a crash. The crash has been supposedly coming for years but has yet to materialize. 

I started 1.5 years ago and now I have 10 doors and looking for more. Those first few really open the door! 

Originally posted by @Larry F. :
Originally posted by @Sharon Tseung:
Originally posted by @Larry F.:

@Sharon Tseung As a fellow West Coaster, I've been investing out of state since 2012.  It can definitely work, but markets have grown tighter all over, so you have to be extra diligent and make sure you are okay with some lower returns than you could have gotten even 2 years ago.  Also the 1% rule is a good eliminator rule, but don't stop there.  For example getting 1% rent in one area with low property taxes (say Kansas City) is very different from 1% rent in a high tax area, like Houston or anywhere in TX.

 Interesting, thanks for the input. Are you still investing now or are you waiting for a crash?

I am definitely not waiting for a crash, as I think that is a fool's errand. A pull back in some areas is much more likely. I continue exploring various methods of REI including the more passive ones I explore in my blog article Three Key Routes for Passive Real Estate Investing

 Great thank you for the information!

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