Out Of State Investing

Buying & Selling Real Estate
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Out Of State Investing

Tim Lynch
Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes

I’m looking into investing in primarily buy and hold opportunities out of state. I live in a very competitive Washington state marketplace and am now looking elsewhere. Where would recommend searching? I’m looking at Jacksonville, Memphis and Toledo but am also open to other locations I’m not aware of.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y

Frankly for cash flow rentals all the markets mentioned are inner changeable it comes down to PM.. PM will make or brake your OOS investment.. and the lower value the home  and higher return the risk goes up exponentially and PM becomes more critical.. the major issue with OOS is the buyers fubar themselves especially us West coast folks that really have no clue as to how these cities work in relation to neighborhood quality that locals know all about and us OOS just don't really have a clue.  

one piece of advice I like to give is in ANY of these cities if you buy at the median price for the city that will get you a better quality.. if you buy at the lower end of the median or half of the median your buying a very HIGH risk property and why do that all to make 200 a month.. risk not even close to reward.

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  • Jake S.
    Rental Property Investor · MN · Member since 2017 · 864 posts · 555 votes
    6y

    Hey @Tim Lynch! I think you'd have a pretty safe bet with most places in the Midwest. I would recommend Kansas city, Indianapolis, Tampa FL, Memphis, Little Rock Arkansas.

    3Reply
  • Christopher Petrillo
    Member since 2018 · 264 posts · 61 votes
    6y

    Hey @Tim Lynch!  Indianapolis is a great market to start investing in.  I would look in that city.  If have any questions or need any help don't hesitate to ask!

    0Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    6y

    @Tim Lynch what type of properties are you looking for ? single family or multi?

    are you going to buy and rehab yourself or buy Turn key? 

    1Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    6y

    Thanks @Jake S. for the recommendations!  I'll add those places to my list to investigate.

    0Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    6y

    Thanks @Christopher Petrillo. Indianapolis must be a good place to start if two of you are recommending it!

    0Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    6y

    Hi @Hadar Orkibi. I am looking for either single family or multi.  Since I am just getting started with out of state investing and what it takes to put together the right team, I suppose it would be best to start with single family.  I am not worried about finding a home that needs a little cosmetic work or even something like a roof.  Again, until I can find the right contractor to add to the team I want the rehab requirements kept to a bit of a minimum.

    0Reply
  • Hadar OrkibiPro Member
    Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
    6y

    Did you consider turn key? 

    If yes, talk to @Alex Craig 

    1Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    6y

    @Tim Lynch

    Check out Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, Ohio, or other secondary or tertiary markets.

    1Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    6y

    Thank you @Lane Kawaoka!

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    6y
    Originally posted by @Lane Kawaoka:

    @Tim Lynch

    Check out Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, Ohio, or other secondary or tertiary markets.

     If you're doing some research on Birmingham I recommend reading The Ultimate Guide to Grading Birmingham Alabama Neighborhoods.

    0Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    6y

    Great resource! Thanks @James Wise

    1Reply
  • Rundell Ramsay
    Rental Property Investor · Jamaica, NY · Member since 2017 · 30 posts · 14 votes
    6y

    Milwaukee is a great place to invest for cash flow feel free to reach out for anything 

    1Reply
  • Jason Martinez
    Real Estate Agent · Cypress, CA · Member since 2018 · 88 posts · 41 votes
    6y

    @Tim Lynch I just purchased and rented my first OOS property in Indianapolis. If you have any questions I’ll be happy to help. PM me.

    1Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    6y

    Thanks @Jason Martinez! I'll PM you if we decide to move our cash into that market.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y

    Frankly for cash flow rentals all the markets mentioned are inner changeable it comes down to PM.. PM will make or brake your OOS investment.. and the lower value the home  and higher return the risk goes up exponentially and PM becomes more critical.. the major issue with OOS is the buyers fubar themselves especially us West coast folks that really have no clue as to how these cities work in relation to neighborhood quality that locals know all about and us OOS just don't really have a clue.  

    one piece of advice I like to give is in ANY of these cities if you buy at the median price for the city that will get you a better quality.. if you buy at the lower end of the median or half of the median your buying a very HIGH risk property and why do that all to make 200 a month.. risk not even close to reward.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    6Reply
  • Zack Brent
    Rental Property Investor · Memphis, TN · Member since 2019 · 17 posts · 13 votes
    6y

    Hey @Tim Lynch, if you are interested in the Memphis market @Forest Skufca may be a good contact as well. 

    1Reply
  • Colin Douthit
    Property Manager · Kansas City · Member since 2019 · 50 posts · 29 votes
    6y

    @Tim Lynch as a few other people have stated the Kansas City market has opportunities of OOS investors to get higher ROI. Earlier this week we had an investor from Washington state pick up a 4 4-plexes that we helped them find. We have an investor from Oregon under contract on a multifamily property as of this week.

    Our team offers help with acquisition, rehab, and property management.  Our goal is to help form the team and make it easy for OOS investors to invest and streamline the process.  If you would like to schedule a call PM me can discuss the options available in this market.

    3Reply
  • Forest Skufca
    Specialist · Memphis, TN · Member since 2019 · 24 posts · 17 votes
    6y

    @Tim Lynch congrats on taking the first steps to investing in real estate!

    You’re off to a good start by researching multiple markets and it’s great that you are comfortable reaching OOS to achieve your goals. Memphis is a great market, and so is Huntsville, AL!

    Something @Jay Hinrichs mentioned,  having boots on the ground for your property managers is super important. Additionally, something I’ve learned is that the type of tenant you put in place can also make or break your investment. Investing in higher quality homes in class b/a neighborhoods may have a higher buy in, but produces a better tenant that pays on time (or pays at all), and doesn’t destroy the house or the things in it. Plus they have great cash flow!

    Also, a question asked earlier is would you be open to a turnkey REI? A good turnkey company will often take care of potential major capital expenses on the property such as roof, HVAC, water heater etc. on the front end. They will also often guarantee the rent and maintenance for certain length of time.

    Let me know if you have any additional questions! I’m always happy to help!

    1Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    6y

    @Tim Lynch there’s ways to make it work in or around your market. I highly discourage looking out of state until you have a lot of experience building teams and managing property.

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    3Reply
  • Derrick Craig
    Memphis, TN · Member since 2013 · 969 posts · 524 votes
    6y

    @Tim Lynch

    All the areas you mentioned are solid areas to invest, especially if you are looking or Buy and Hold investments and not trying to flip any thing here in Memphis due to the fact our property values don't appreciate as fast as Washington, Arizona, West coast.. But we do have an abundance of RENTERS!!

    1Reply
  • Matt Berklacy
    Rental Property Investor | Realtor · Jacksonville FL | Savannah Ga |Raleigh NC · Member since 2017 · 467 posts · 161 votes
    6y

    Definitely smart to take high retail money or w-2 money from your extra over priced market and pick up a 1%'er, light rehab in any of the markets mentioned..I did that with DC money to Raleigh and N Florida.

    The turn key, though attractive would not fit me, JWB here is excellent tear down, rebuild, property manager, 3 year lease guarantees, you get a new product, but I think its a way too high above the arv.  

    Get something 20% under arv, w/ light rehab, give it to a property manager ...just vet the property manager, let them help with a rehab.

    0Reply
  • Marija Sparano
    Accountant · White Plains, NY · Member since 2019 · 50 posts · 14 votes
    6y

    New to BP and trying to explore different markets before my first investment. Can any of you give some more info on the Little Rock, AZ market? I have heard that the crime rate is very high so it makes it not a safe place to invest. I would love to hear some of your opinions on that?

    0Reply
  • David Thompson
    Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
    6y

    Tim,

    We love out of state investing to diversify but DIY is a lot more challenging and requires more planning, relationship / team development, new knowledge, etc as others have mentioned.  I have local properties for DIY but I like syndications for out of state opportunities better.  If you are an accredited investor we like syndications in MF, storage and manufactured home parks with value add operators that can get you exposure to markets that interest you but don't require all the time and attention of trying to do this all yourself.  Let experts help create value for you as a passive investor in some markets that they know much better than you because they focus their business there.  MF Markets that we like are Texas (Dallas, Austin, San Antonio) and Florida (Tampa, Jacksonville and Orlando).

    1Reply
  • Ashton Levarek
    Rental Property Investor · Beaverton, OR · Member since 2018 · 88 posts · 155 votes
    6y

    Hey @Tim Lynch

    Couldn't agree more. We live in the Portland, OR area and all our investments are in Raleigh, Durham and Fayetteville NC. NC has proven to be an excellent place to invest in, in fact Raleigh and Charlotte have repeatedly turned up in the top ten list of places to invest in real estate across the nation. This is primarily due to the job growth, population growth and unemployment rates, which have historically remained better than the national average over the last few years. These factors are largely driven by the cost of land and property being gobbled up by larger companies moving here to do business .....but being a landlord friendly state helps as well. Check out 

    https://www.forbes.com/sites/ingowinzer/2019/01/07/2019-best-markets-for-real-estate-investments/#23048b0f71f5

    - https://www.mashvisor.com/blog/best-places-to-invest-in-real-estate-2019/

    https://finance.yahoo.com/news/best-worst-cities-own-investment-090000378.html

    Hope that helps, best of luck. 

    0Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    6y

    Great advice @Jay Hinrichs! When I locate the right market(s) to invest in the second step will be to build the right team of realtor, PM and contractor before buying the first property.

    0Reply
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