Where to buy 1st out of state property?

133 Replies

Hi folks, I'm interested in buying 1st out of state property since CA is too expensive. Looking to buy SFR or small multifamily (2-4 units). Need financing or I can do HELOC out of my own property. Price range is better below 100k. Would like a light fixer so I can do BRRRR later. Looking for an area/city with strong job and population growth.

Here is my list of areas/cities below. Which area/city shall I start with. Would like to hear your opinions. 

1. Memphis, TN

2. Nashville, TN

3. Tampa, FL

4. Jacksonville, FL

5. Orlando, FL

6. Charlotte, NC

7. Indianapolis, IN

8. Cincinnati, OI

9. Cleveland, OI 

Thank you for your input. 

I am also looking for a multi-family property. The area's I'm considering are Ohio, Indiana and Florida but I haven't fully decided. However, I am strongly leaning towards Ohio: Dayton and Columbus. I have heard that these areas are great if you are looking for long term cash flow.

@Renee Ren I think you have a solid list. I lived in Charlotte for over six years and I recently relocated to Orlando. Both markets have great job growth and a ton of people are moving to the cities. I can tell you that both markets are hot and you will not be able to find any residential properties under $100k that are in areas where people would want to live. I suggest looking in other cities or increasing your budget. Hope this helps!

Hey @Renee Ren ! I have been investing in and around Indianapolis for a number of years now in the single and multi-family space. I would encourage you start shopping PM companies regardless of the market you select. A PM company can make or break your investing experience. Far too often investors put properties under contract without having talked to a single property manager. While putting a deal together can be exciting... don't let your emotions take priority over conducting proper due diligence. I have found success in buying for cashflow and having appreciation be the cherry on top. Be wary of those inflated ARVs! ;) Hope this helps.

Cheers,

@Renee Ren Here are my thoughts. I'm basing my response on the assumption you are looking for cash flow markets.

1. Memphis, TN - Good cash flow market but way too much competition, high percent of renters and un-natural dyanmics caused by the huge swaths of hedge fund purchases and disposition.

2. Nashville, TN - 7 to 10 years ago, would have been perfect. Not a cash flow market and well above $100K

3. Tampa, FL - all three Florida cities and Charlotte are definitely growing. You will probably have to be creative in your neighborhoods to find decent properties less than $100K

4. Jacksonville, FL - 

5. Orlando, FL

6. Charlotte, NC - 

7. Indianapolis, IN - a great, midwest cash flow market

8. Cincinnati, OH - I assume you meant Ohio - not sure what OI is :-) plenty of good cashflowing options and a lot of diverse neighborhoods.

9. Cleveland, OH - Many opportunities in the suburbs - I would not buy in Cleveland. Check Jame's Wise guide to neighborhoods in Cleveland. It will be a big help. 

Columbus is the only Ohio city that is really growing over the long haul. Much more competitive than Cleveland and Cincinnati

I think Huntsville is a great market with tremendous population, job and income growth. The small multifamily market is not good there but SFH is very robust.

@Renee Ren I would recommend looking at Columbus, Ohio. Columbus, Ohio has a strong job and population growth unlike some of the cities on your list. You can find multifamily properties in C or better areas but I recommend bringing $130,000+

1% deals can still be had in Central Florida. Rent and sales prices will continue to be buoyed by high population density and a diversity of population growth factors: job growth, organic population growth (births), and domestic migration (retirees and so forth).

@Renee Ren so I am currently working on closing my first OOS deal in Parma Ohio (B class neighborhood) and buying it right at $98k SFH 3/2. I'll have to put about $5k to give it a fresh look. I'm also from CA and totally commiserate with you about our crazy expensive market here than there is no way to find profit in rentals here. I am still debating on which PM company to hire since they all have such high markups. I may just end up self managing remotely with some local assistance

Originally posted by @Kalanie Tran :

@Renee Ren so I am currently working on closing my first OOS deal in Parma Ohio (B class neighborhood) and buying it right at $98k SFH 3/2. I'll have to put about $5k to give it a fresh look. I'm also from CA and totally commiserate with you about our crazy expensive market here than there is no way to find profit in rentals here. I am still debating on which PM company to hire since they all have such high markups. I may just end up self managing remotely with some local assistance

Hi Tran, is $5k all you put down toward the $98k house? I'm also looking to invest out of state as well but still learning (that's my goal later down the road). Right now my goal is using BRRR locally, PA

 

Originally posted by @Renee Ren :

Hi folks, I'm interested in buying 1st out of state property since CA is too expensive. Looking to buy SFR or small multifamily (2-4 units). Need financing or I can do HELOC out of my own property. Price range is better below 100k. Would like a light fixer so I can do BRRRR later. Looking for an area/city with strong job and population growth.

Here is my list of areas/cities below. Which area/city shall I start with. Would like to hear your opinions. 

1. Memphis, TN

2. Nashville, TN

3. Tampa, FL

4. Jacksonville, FL

5. Orlando, FL

6. Charlotte, NC

7. Indianapolis, IN

8. Cincinnati, OI

9. Cleveland, OI 

Thank you for your input. 

Cleveland is one of the best turnkey market and the most popular for investors because of high rental demand and low cost of entry, property prices are pretty inexpensive here. With that said, don’t go for the cheapest house in the market, anything sub 50k nowadays can be a nightmare. The first thing you will want to do is check out this Cleveland Price & Neighborhood Map which will help you have a better understanding of the neighborhoods and general market in Cleveland. Good luck!

 

@Renee Ren Cleveland without a doubt.  I have clients that used to invest in INDY, Memphis, Az, but now all are in the Cleveland markets . It has been the best overall rental market for many years, Forbes had  it for 2017-18, but they were not paying attention . There is a reason why I have flipped / sold about 250 props to Ca investors. 10-14% net caps are to be had.  Its all about knowledge and your team

Good Luck

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@Jordan Reynolds Thank you Jordan. I'll look into Dayton and Columbus.

@Zach Hoereth Thanks for your advice. PM is very important. I'll ask for referrals. 

@Anthony Tonsoline  Thanks Anthony. If the market is too hot, I probably won't go there. I'd like to keep the price under 150k.

@Dave DeMarinis   Thanks for your advice. 

@Remington Lyman Thanks. I'll look into Columbus. 

@Kalanie Tran Hi Kalanie, how do you find the property to buy. Do you buy it through an agent. I'll strongly suggest you to find a PM. It is too difficult to manage it remotely. 

@Andrew A. Thanks Andrew. When you say central FL, what city/area do you suggest.

@Jeff Tyndall  Hi Jeff, I'll look into Columbus. Looks like it is a good market. It is recommended by a couple of investors. 

@Ben Halabi Hi Ben, thanks for the info. 

@Nick Giulioni Hi Nick, what area are you investing in Indi. 

@Bob Prisco Thanks Bob. I'll check your website. 

@Brian Garlington  Hi Brian, what area/city do you recommend. 

@Renee Ren , I consider Central Florida to be the counties of Polk, Osceola, Orange, Lake, Seminole, Sumter, and Marion. Notable cities include Lakeland, Orlando, Ocala, and their surrounding areas.

Hi Renee! Me and my partner are active out in Cleveland so we would absolutely be recommending that as the entry way. But with that being said do your own research and as a random rule of thumb if you need a tie breaker between areas choose the one you'd enjoy to visit more since you will have to make a trip at some point. 

Also saw that you're local and wanted to add that we host a real estate meetup along with @Jeb Brilliant  (who's a pro in the Indy market so he can tell you his experience there) mostly centered around out of state investing here in Newport beach so it would be great for you to come by and ask any questions you may have! 


Feel free to reach out for anything! 


@Renee Ren how do you go about purchasing properties so far away from you? How do you manage them and how do you look at them before purchasing? Do you take trips ? How is a property manager feasible on a 2 -4 unit ? Please explain . Thank you

I am in the Nashville market and it definitely is a cash flowing market. We have not even reached out ceiling yet. Job growth and development continues to come here and although there may not be under $100k deals within minutes from the city, there are great opportunities below that price range in suburbs of Nashville. I am not saying I an expert, but you have to dive into the neighborhoods and suburbs of Nashville to get an accurate picture. Everyone sees Nashville and they think Broadway, honky tonk bars and all these high rises. I am consistently finding properties $50k-$250k all over Middle Tennessee. There is so much opportunity for fix and flips, development properties, BRRRR, etc. You just have to know this market.

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