Where would you buy if looking for cashflow?

Buying & Selling Real Estate
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Where would you buy if looking for cashflow?

Maria D'Aura
Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes

I'm selling a rental (escrow scheduled to close 2/14) and need to find a replacement for 1031 exchange. I'm looking for cashflow, C class or better, multifamily would be great. Property needs to be around $550K to complete the 1031. 

I live in the San Francisco Bay Area and am considering a single family with in-law that I might make a primary residence one day, but it's probably not the best use of my investing resources so today I'm diving into what my other options look like. 

I've been looking around in the central valley and Sacramento area since it's within a 2 hour drive. I've also been considering out of state, where I have some contacts, in Vancouver WA area, Bend OR, and St. Louis MO. Would love some feedback from any investors in these areas or any other areas I should consider.

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Amber Boskers
Rental Property Investor · Scottsdale, AZ · Member since 2018 · 36 posts · 33 votes
6y

@Maria D.

Congrats on your 1031 sale! I'm an investor and Realtor in metro-Phoenix and am quite partial to the area here but there are many areas throughout the country (Texas, Tennessee, the Carolinas, Nevada, etc.,) that are investor friendly. It just depends on your goals and what you are looking for. In less expensive areas (like Phoenix) you could split up your 1031 funds into multiple properties, find a property manager (I know a few), get tenants lined up (we have ALOT here), mortgage the properties (we work with the best in the state, with great interest rates) and then enjoy the cash flow, tax breaks and appreciation. We have about 300+ people moving into our county every day (employment is booming) so housing is in high demand. You are in a fabulous position but the clock is ticking for you to find your new properties. I'd be happy to help answer any questions you may have about Phoenix. :)

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  • Chace Fraser
    Realtor · Portland, OR · Member since 2017 · 357 posts · 259 votes
    6y

    Hey @Maria D'Aura congrats on your closing! Bend is a beautiful area with 300 days of sunshine (and becoming more popular for tourists and retirees by the day). It's also subject to the tenant-friendly SB 608 in Oregon. Vancouver is growing in popularity and seeing properties and rents appreciate. But WA is looking to pass legislation similar to Oregon's that is much friendlier towards tenants. If you're willing to work with these laws, either place would work. Keep in mind, they're both higher cost of living areas and high amounts of cashflow aren't always possible. 

    6Reply
  • Nicholas Cook
    Real Estate Broker · Portland, OR · Member since 2017 · 100 posts · 56 votes
    6y

    @Maria D'Aura Everything really comes down to your primary goal. The west coast is a great appreciation play if you are looking to hold long term. If you are focused on cash flow, there are opportunities in the NW, but a bit harder to find unless you are buying large multifamily buildings. 

    Vancouver is more landlord friendly than Portland, and Oregon for that matter, but it's not clear how long that will be. 


    If you want to discuss feel free to message me.

    Thank you!

    5Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y

    Detroit Michigan

    7Reply
  • Delbert Standifer
    Rental Property Investor · Carson, CA · Member since 2019 · 185 posts · 74 votes
    6y

    @Maria D. What would make an investor sale a property and turn around and buy one? Upgrade

    0Reply
  • Sherwin Gonzales
    Rental Property Investor · San Francisco, CA · Member since 2015 · 236 posts · 156 votes
    6y

    @Maria D'Aura, congrats on selling your rental property! Using those capital funds for a SFH that you plan to live in and rent out an in law unit to help pay off your mortgage might not be bad idea but I agree that that route might not be the best use of your capital.

    I have investments in Sacramento and as @Nicholas Cook mentions, the west coast is more of an appreciation game rather than cash flow. Some of my multifamily properties in Sacramento do not cash flow day 1 like maybe in other states like Phoenix or Texas. However, once we value add and value management and stabilize the property and increase it's NOI, in due time, it'll cash flow and you know what. It appreciates like crazy maybe more quicker that in other states like Phoenix or Texas.

    So what is your end goal? Build up cash flow or wealth?

    0Reply
  • Amber Boskers
    Rental Property Investor · Scottsdale, AZ · Member since 2018 · 36 posts · 33 votes
    6y

    @Maria D.

    Congrats on your 1031 sale! I'm an investor and Realtor in metro-Phoenix and am quite partial to the area here but there are many areas throughout the country (Texas, Tennessee, the Carolinas, Nevada, etc.,) that are investor friendly. It just depends on your goals and what you are looking for. In less expensive areas (like Phoenix) you could split up your 1031 funds into multiple properties, find a property manager (I know a few), get tenants lined up (we have ALOT here), mortgage the properties (we work with the best in the state, with great interest rates) and then enjoy the cash flow, tax breaks and appreciation. We have about 300+ people moving into our county every day (employment is booming) so housing is in high demand. You are in a fabulous position but the clock is ticking for you to find your new properties. I'd be happy to help answer any questions you may have about Phoenix. :)

    11Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y

    @Delbert Standifer

    I’m not sure I understand the question, but I’ll try.

    The property I'm selling has done well for appreciation, but not so great for cash flow. I want to move the appreciation into a property that has better return and not a condo with monthly HOA dues.

    0Reply
  • Delbert Standifer
    Rental Property Investor · Carson, CA · Member since 2019 · 185 posts · 74 votes
    6y

    @Maria D.

    I get it now,thanks for explaining. I'm excited and nervous I'm flying to Detroit to look at and strongly considering buying my first oos rental property.

    1Reply
  • Junior Soares
    Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
    6y

    @Maria D.

    That could buy you a nice cash flowing 4plex in the Austin area that could produce 7% cash on cash and be 75% paid off or got can go big in the Midwest. I'm a fellow BayArea native and I invest here, in Austin since I'll be relocating there end of year and pretty heavy in Ohio and Michigan for cash flow.

    1Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y

    @Sherwin Gonzales

    Goal for this one is cash flow.

    0Reply
  • Zack Thiesen
    Contractor · Eureka, CA · Member since 2015 · 100 posts · 64 votes
    6y

    @Maria D'Aura Have you considered Arcata, CA? Or Eureka, CA? I live up here in Humboldt Bay (about 5 hrs north of you) and moved here from the SF Bay Area. It is identical in terms of weather and ocean/coastline and a wonderful area. There is a large Cal State University in Arcata, and rents up here are high and getting higher every month it seems like. Your dollar amount for the 1031 is well suited to the multi-family market here. Feel free to DM me with any questions or to ask about areas and other details if you find something you're interested in. Good luck!

    4Reply
  • Tj M.
    Real Estate Investor · Reno, NV · Member since 2016 · 71 posts · 67 votes
    6y

    @Maria D. Unfortunately I think you made the same mistake I did. You sold your property before finding something to buy to use the 1031. You now are in a time crunch to buy something even if it’s not a good deal. I think you really should find the new property first before selling the old one. I ended up just paying my taxes. Time is of the essence. Good luck.

    5Reply
  • Jeff Bethke
    Audio Visual Manufacturer Sales · Scottsdale, AZ · Member since 2015 · 32 posts · 6 votes
    6y

    @Maria D. I notice no one mentioned a turnkey provider. You could likely have them line up multiple properties that cover the amount you need to exchange and do it rather quickly. The houses we buy in Memphis run about $130-$170k and rent for $1200-$1500.

    2Reply
  • Kyle Eckert
    Realtor · Saint Louis, MO · Member since 2017 · 228 posts · 174 votes
    6y

    @Maria D'Aura 550k In St Louis would get you a bigger building in a C class neighborhood, up to a 4-family in an A neighborhood. St Louis is also known for its cashflow, and I am doing pretty well here. Feel free to reach out, I may have some leads we can discuss

    5Reply
  • Logan Freeman
    Specialist · Kansas City, MO · Member since 2018 · 331 posts · 148 votes
    6y

    Hi @Maria D'Aura, first off - Congrats on selling your rental through 1031 exchange! 

    As i understand your needs, you're looking for cashflow, C class or better, preferably multifamily, and the property needs to be around $550K to complete the 1031.

    While you live in the bay area, you realize west coast is more so appreciation over cash flow; so you're considering out of state... including and St. Louis MO. 

    I specialize out of state investors acquire properties in the KC area, and last year helped over 20 clients with their 1031 exchanges. 

    I'd be happy to chat with you!

    Logan Freeman, Founder / LiveFree Investments

    Screen Shot 2020-01-23 at 8.50.52 AM.png

    3Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @Maria D'Aura I would recommend checking out Columbus, Ohio. It is easy to find cash flowing properties in C class neighborhoods if you are willing to work at it.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    4Reply
  • Sherwin Gonzales
    Rental Property Investor · San Francisco, CA · Member since 2015 · 236 posts · 156 votes
    6y
    5Reply
  • Raju BalakrishnanPro Member
    Rental Property Investor · Santa Clara, CA · Member since 2016 · 219 posts · 112 votes
    6y

    @Maria D'Aura Immediate cash flow means outside CA probably. Here is a  stat for for best multi-family locations across the country for 2020: https://www.realwealthnetwork.com/learn/best-places-to-buy-rental-property/ . Singles may vary but somewhat correlated. May be will give you some new location ideas. Good luck with your search!

    4Reply
  • Account Closed
    Specialist · San Antonio, TX · Member since 2012 · 865 posts · 351 votes
    6y

    It really depends how you will be Financing the purchase. If you are trying to get alternative financing from the seller then it is advisable to meet them in person. So many folks talk a big game about buying real estate, but can only buy a house or two at best thru a bank. Knowing your financing strategy is so over looked by new aspiring investors. 

    I buy local to where I am.  

    0Reply
  • Stephanie Jones
    Property Manager · Memphis, TN · Member since 2020 · 80 posts · 32 votes
    6y

    @Maria D'Aura congrats on the sale of your first rental investment! To offer some additional information on areas that offer higher monthly cash flow, my team is currently seeing anywhere between 8% and 19% cash on cash return on properties in Memphis, TN.  

    0Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    6y
    Originally posted by @Maria D'Aura:

    I'm selling a rental (escrow scheduled to close 2/14) and need to find a replacement for 1031 exchange. I'm looking for cashflow, C class or better, multifamily would be great. Property needs to be around $550K to complete the 1031. 

    I live in the San Francisco Bay Area and am considering a single family with in-law that I might make a primary residence one day, but it's probably not the best use of my investing resources so today I'm diving into what my other options look like. 

    I've been looking around in the central valley and Sacramento area since it's within a 2 hour drive. I've also been considering out of state, where I have some contacts, in Vancouver WA area, Bend OR, and St. Louis MO. Would love some feedback from any investors in these areas or any other areas I should consider.

     I would look at Columbus, OH for sure you can find c-b class property that will cash flow as a much lower price point that you will find  in your local area!

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    4Reply
  • Zeke ListonBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    I agree with @Remington Lyman and @Robert Ellis, Columbus, OH would be a good place to consider! 

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  • Michelle Phillips
    Real Estate Agent · Columbus ohio · Member since 2017 · 6 posts · 1 vote
    6y

    I would agree, Columbus is a great place to invest although are pricing are rising. There is still great opportunities for the buy and hold investors. 

    1Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    6y

    Perhaps circle back on CA with the new adu laws, heck you can even add one on wheels, effectively turning a sfr upto a tri. For example a friend turned his 2 car detached into $1800.00 a month (30k all in) thats 6% rent ratio for the 1% -2% seekers. Good luck with your search!

    1Reply
  • Jim Chuong
    Rental Property Investor · Toronto, Canada · Member since 2012 · 102 posts · 95 votes
    6y
    Originally posted by @Hai Loc:

    Detroit Michigan

     How many rentals do you have in Detroit, Michigan?

    1Reply
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