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
7y

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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  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    7y

    Thanks @Colin Douthit I'll look into KC and if it makes sense to us I'll PM you.

    Thanks @Forest Skufca I'll reach out if I decide to go the turn key route.  I might be a good option to take for my first out of state property, but I plan on building a local team prior to buying an investment so my goal/expectation is to not need a turn key company.  But all avenues are certainly worth investigating and weighing the risk/reward.

    @Jordan Moorhead you are right, I would not suggest anyone become an OOS without local experience first also.  I currently have 17 doors locally and just made an offer on another 4-plex in my area.  I self manage 7 of the doors, but have a PM in place to manage the 10 unit.  With my contractors also in place locally I feel it is time to start venturing out and exploring additional opportunities.

    The cash flow realized investing OOS is far greater than I can get here.  However, here we gain appreciation at a much more rapid pace, allowing us to turn properties at a quicker pace when it makes sense.  Going OOS will allow me to diversify a bit and pick up higher cash flowing properties at a steeply discounted price (when compared to my market).
    @Forest Skufca

    1Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    7y

    Thanks @Derrick Craig! My thoughts exactly on long term holds in the OOS markets I'm looking into.  They should be considerd strickly on a cash flow basis and not appreciation.

    @Ashton Levarek thanks for the amazing information!  I'll dive into it right away.

    0Reply
  • Brandon Kingcaid
    Rental Property Investor · San Antonio, TX · Member since 2019 · 69 posts · 12 votes
    7y

    @Colin Douthit I’ll be looking for help with acquisition, rehab, and eventually property management on a multifamily house hack at the end of the year. Do you know anyone that can help with this in Central Texas?

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Tim Lynch

    Don't forget the great state of TX (not DFW, as it is a little hot there). However, there is Houston and some other markets in West Texas that you can look into. 

    Undoubtedly, JAX, and FL, as a whole is definitely an interesting state. 

    As you may already know, Out-of-State investing is a different ball game, so make sure you are properly informed and well equipped to succeed. 

    Good luck. 

    0Reply
  • Colin Douthit
    Property Manager · Kansas City · Member since 2019 · 50 posts · 29 votes
    7y

    @Brandon Kingcaid unfortunately I do not know anybody in that market at this point in time.

    0Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    7y

    Thanks @Ola Dantis! It’s certainly a whole different ball game putting together a team and being displaced from them. 

    0Reply
  • Narinder Gill
    Rental Property Investor · Turlock, CA · Member since 2018 · 35 posts · 5 votes
    7y

    @Jason Martinez which area? Can you provide some details? I have been thinking about Indianapolis as well. Im in Cali as well

    1Reply
  • Narinder Gill
    Rental Property Investor · Turlock, CA · Member since 2018 · 35 posts · 5 votes
    7y

    @Jay Hinrichs what would be your business advice then. What type of real estate to invest in. Im in Cali and rather invest here, because of cash flow concerns, been forced to look elsewhere. I do hear alot pm can take advantage of oos investors. I rather invest close to home to have more control over it.

    I've been looking at AG properties with trees on it along with SFR and mulifamily in Central Valley.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Narinder Gill:

    @Jay Hinrichs what would be your business advice then. What type of real estate to invest in. Im in Cali and rather invest here, because of cash flow concerns, been forced to look elsewhere. I do hear alot pm can take advantage of oos investors. I rather invest close to home to have more control over it.

    I've been looking at AG properties with trees on it along with SFR and mulifamily in Central Valley.

    tImber you want to be in Oregon or WA  ID or maybe montana..  CA the harvest rules are just too onerous. 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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    1Reply
  • Steve RozenbergPro Member
    Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Tim Lynch  For What its worth, 

    When you are looking at what type of deal is a good deal and where is a good deal for you. I would say that you need to be very cautious in asking this question, the reason is this is the "HOW" part of investing which in my opinion is the 2nd part of the equation.
    I think you need to focus on the first part of the equation which is the “Why”.
    Focusing on “YOUR" goals and what you want as a result of owning real estate is the most important. Sit back and ask what and how your life will be impacted as a result of owning real estate assets. The result of owning is what?? is it cash flow, appreciation, 1031, pass down to family as a legacy, this is also what your exit strategy will be. Not many people think about the end goal and the exit strategy when looking at deals. I know because I was one of those people. I kept asking if a certain deal was a good or bad deal and would go with concensus of people and make my decision. However if I ever created goals and an exit strategy then I would have realized that these properties did not align with my goals. I think it aligned more with their goals which to no fault of their own, were not even close to my goals.
    So my strategy (my “How”) did not align with my goals (my “Why”).. and this was disastrous for me.
    Focus on the goal end destination. Then you build your strategy that’s going to get you to your goals it’s kind of like where you’re driving to is the end destinations and the freeways are the strategy that will get you there.
    No one ever asked or advised me on this and it almost made me bankrupt. Don’t ask if it’s a good or bad deal, have your definitions and strategy set first. Then focus on the market / city that will get you to your goal based on the strategy. That’s my advice I give to owners and leads that want to buy or learn to buy investment properties, we manage thousands of properties and 50/60% of our clients are new to real estate or learning how to truly build wealth and do not live locally or in the same state or country. I always stress them knowing what is a good deal for them, not for me. To me that’s helping people build wealth, not just telling them to buy or not to buy.
    Good luck to you

    1Reply
  • Jean Marx
    Rental Property Investor · Missoula, MT · Member since 2018 · 66 posts · 38 votes
    7y
    Originally posted by @Marija Sparano:

    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?

    Hi Marija - We invest in the Little Rock, AR area. I lived there for my software job for about 5 years until I moved to IL in 2012. It definitely has some higher crime areas that I would stay away from but there are plenty of other areas I would have been comfortable living in. It is easier to find properties that meet the 1% rule. Appreciation-wise, don’t expect much. We have a property in an outside suburb that has maybe appreciated 5% since 2006. There are areas in town that are probably a little better but not like other markets. The flip-side was also true. Even though my husband bought it as a primary residence in 2006, the value didn’t tank in the same way as a large portion of the rest of the country. 

    -Jean 

    1Reply
  • Mark Smith
    Member since 2019 · 13 posts · 6 votes
    7y

    Texas is a great market, the state has been growing with lots of opportunities. The state laws are landlord friendly too.

    0Reply
  • Fabricio Kannenberg
    Chicago, IL · Member since 2018 · 13 posts · 3 votes
    7y

    @Jason Martinez

    Hey Jason! I’m from Chicago and I’m also looking for OOS. Can I reach out with some questions?

    1Reply
  • Marija Sparano
    Accountant · White Plains, NY · Member since 2019 · 50 posts · 14 votes
    7y

    @Jean Marx thank you! I appreciate your advice. I am still exploring couple of markets.

    0Reply
  • Jean Marx
    Rental Property Investor · Missoula, MT · Member since 2018 · 66 posts · 38 votes
    7y
    Originally posted by @Marija Sparano:

    @Jean Marx thank you! I appreciate your advice. I am still exploring couple of markets.

    I forgot to mention it’s also super landlord friendly. Good luck with the search!

    0Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    7y

    @Colin Douthit what are typical numbers in KC for a 4 plex? (ie PP/rehab/rents). B class-C class? Year built? Just curious. Thanks.

    0Reply
  • Jason Martinez
    Real Estate Agent · Cypress, CA · Member since 2018 · 88 posts · 41 votes
    7y
    Originally posted by @Narinder Gill:

    @Jason Martinez which area? Can you provide some details? I have been thinking about Indianapolis as well. Im in Cali as well

    PM me  

    0Reply
  • Jason Martinez
    Real Estate Agent · Cypress, CA · Member since 2018 · 88 posts · 41 votes
    7y
    Originally posted by @Fabricio Kannenberg:

    @Jason Martinez

    Hey Jason! I’m from Chicago and I’m also looking for OOS. Can I reach out with some questions?

    PM me.  

    0Reply
  • Ishmael Carter
    Rental Property Investor · New York Ciry, NY · Member since 2015 · 33 posts · 14 votes
    7y

    I invest in Charlotte but haven’t been able to find any decent 3 or 4 units. Would like to expand to Raleigh

    0Reply
  • Tim Lynch
    OP
    Real Estate Broker · Olympia, WA · Member since 2018 · 45 posts · 26 votes
    7y

    @Steve Rozenberg Thanks so much for your advice and sharing your learning experience!  I have thought extensively amount my "why" and "how." I really appreciate your knowledge and willingness to reach out and ensure that I am considering those extensively before jumping this OOS investment venture off.

    0Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    7y

    @Hadar Orkibi Watched your You Tube video yesterday....good stuff. Thank you for the shout out!

    901-848-9028
    1Reply
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