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

    Detroit Michigan

     How many rentals do you have in Detroit, Michigan?

     I had 3 in Detroit area 7 years ago..  I am working on a 20 single package as we speak

    So, zero? As we speak? 

     You looking in Detroit? Ratios are excellent in B class neighborhoods 

    I know. $40k a door. Very interesting  

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y

    @Marylin OShea

    Going to have to disagree on this one. It’s not better in the Bay Area even self managing. With zero mortgage sure, but the return is much better elsewhere... even in a bank account in some cases.

    0Reply
  • Calvin OzanickBusiness Member
    Property Manager · Janesville, WI · Member since 2017 · 708 posts · 297 votes
    6y

    I highly recommend the Janesville or Beloit, Wisconsin areas. The prices are much lower than most of the country but with so much economic growth in the recent years, the rents are staying high and jobs are being created. Let me know if you have more questions or would be interested in talking more! Best of luck on your search wherever you intend to go!

    Wisconsin Property Managers4.8411 Reviews
    WebsiteView Page
    1Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:

    Detroit Michigan

     How many rentals do you have in Detroit, Michigan?

     I had 3 in Detroit area 7 years ago..  I am working on a 20 single package as we speak

    What made you sell them 7 years ago? Detroit RE has had an amazing run up in the last few years 

     They were singles.. I moved up to multis and MHPs..

    Detroit not much of a multifamily market.. cash flow singles mainly..

    1Reply
  • Tim Debronsky
    Full-Time Investor & Agent · Amherst, OH · Member since 2014 · 149 posts · 50 votes
    6y

    @Nidal Daraiseh  We are investing in C & B neighborhoods in the suburbs of Cleveland.  

    0Reply
  • Alice Huang
    Investor · Austin, TX · Member since 2020 · 223 posts · 83 votes
    6y

    @Hai Loc

    You mind putting me in touch? Sounds like me. Gentrified our of Vancouver and now I’m in Texas!

    0Reply
  • Kiera Underwood
    Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
    6y

    @Nidal Daraiseh I am an investor in OKC! 

    0Reply
  • Andrew Kahle
    Investor · Scottsdale · Member since 2019 · 13 posts · 9 votes
    6y

    There ya go.

    https://www.reitnotes.com/cap-rate-by-real-estate-properties-in-US-cities/

    4Reply
  • Michael Corso
    Lender · Wildwood Crest, NJ · Member since 2017 · 317 posts · 56 votes
    6y

    Ohio is hot !!

    2Reply
  • Jim Chuong
    Rental Property Investor · Toronto, Canada · Member since 2012 · 102 posts · 95 votes
    6y
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:

    Detroit Michigan

     How many rentals do you have in Detroit, Michigan?

     I had 3 in Detroit area 7 years ago..  I am working on a 20 single package as we speak

    What made you sell them 7 years ago? Detroit RE has had an amazing run up in the last few years 

     They were singles.. I moved up to multis and MHPs..

    Detroit not much of a multifamily market.. cash flow singles mainly..

    Why not refi cash out, continue with MF/MHP and keep everything?

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Nicholas Cook:

    @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!

    Thanks for the reply. As far as Vancouver goes, are tenant laws inline for some changes? 

    Although, I can't imagine it being any more tenant friendly than California and I haven't had any issues in the last 13 years... knock on wood.

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Thanks, Amber. I appreciate your detailed reply about the Phoenix area. You've peaked my interest and it's now on my radar, maybe not for this 1031, but I'll be in the market for another the second half of this year.
    #exprealtyproud ;-)  are you on workplace? Let's connect there.

    Originally posted by @Amber Boskers:

    @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. :)

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Account Closed:

    @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!

     Thanks, Zack. I have not looked in that area. I'll check it out.

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Jeff Bethke:

    @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.

    Hi Jeff, 

    Interesting thought here. I have not considered turnkey. Mainly because they seem to get a bad rap and I feel like I need to be EXTRA careful in choosing one. If I were to go this route how would I vet a turnkey provider? 

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Jeff Bethke:

    @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.

    BTW--- any chance you're related to Gogo Bethke?

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Raju Balakrishnan:

    @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!

    Thanks for the link, Raju. 

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Matt R.:

    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!

    Well, I've definitely considered an adu. I had plans drawn to add one onto my house. It's not an adu for renting at this point, it's to accommodate family. However, the estimates I've been getting for construction are much higher than I anticipated. We're adding about 350sqft including a new bathroom plus reconfiguring two bathrooms. My estimates have been between $265-355K. I guess it's not a terrible return for added value. If we were renting it out would probably go fro $1500/mo.. We have another SFH I would like to add an ADU to, but my husband does not share my vision and is not on board because parking on that street is already a challenge. I say if we can get the permits... do it anyway!

    Anyway, part of the reasoning for selling and buying out of state is the extra cashflow will more than cover a loan for the addition on my primary residence. 

    1Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Account Closed:

    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.  

    I've had this property a long time. I won't be financing this next one.

    0Reply
  • Maria D'Aura
    OP
    Real Estate Agent · Livermore, CA · Member since 2016 · 173 posts · 74 votes
    6y
    Originally posted by @Tj M.:

    @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.

     Interesting thought. Where I live getting an offer accepted before having sold the property you need the capital from would be nearly impossible. Even offers contingent on selling when the property to be sold is in contract very rarely get accepted. I had not considered if it was the norm in the areas where I'm considering buying. Regardless, I see what you're saying, but I'm more comfortable having my steps completed in order as I go. 

    0Reply
  • Chris Gouveia
    Santa Clara, CA · Member since 2019 · 17 posts · 5 votes
    6y

    @Chace Fraser@Nicholas Cook- saw you two mention Vancouver possibilities- anything to know/avoid on buying SFR properties in Canada/Vancouver?

    0Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:

    Detroit Michigan

     How many rentals do you have in Detroit, Michigan?

     I had 3 in Detroit area 7 years ago..  I am working on a 20 single package as we speak

    What made you sell them 7 years ago? Detroit RE has had an amazing run up in the last few years 

     They were singles.. I moved up to multis and MHPs..

    Detroit not much of a multifamily market.. cash flow singles mainly..

    Why not refi cash out, continue with MF/MHP and keep everything?

    It was difficult to get financing at that time let alone refi especially as Canadian. It was during the time when Detroit declared Bankruptcy. It was either sell or keep..  

    0Reply
  • Jim Chuong
    Rental Property Investor · Toronto, Canada · Member since 2012 · 102 posts · 95 votes
    6y
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:
    Originally posted by @Jim Chuong:
    Originally posted by @Hai Loc:

    Detroit Michigan

     How many rentals do you have in Detroit, Michigan?

     I had 3 in Detroit area 7 years ago..  I am working on a 20 single package as we speak

    What made you sell them 7 years ago? Detroit RE has had an amazing run up in the last few years 

     They were singles.. I moved up to multis and MHPs..

    Detroit not much of a multifamily market.. cash flow singles mainly..

    Why not refi cash out, continue with MF/MHP and keep everything?

    It was difficult to get financing at that time let alone refi especially as Canadian. It was during the time when Detroit declared Bankruptcy. It was either sell or keep..  

     Remember when Dan Gilbert moved into Detroit back then? Baller!

    Timeline of Dan Gilbert's move into Detroit

    0Reply
  • Chace Fraser
    Realtor · Portland, OR · Member since 2017 · 357 posts · 259 votes
    6y
    Originally posted by @Chris Gouveia:

    @Chace Fraser@Nicholas Cook- saw you two mention Vancouver possibilities- anything to know/avoid on buying SFR properties in Canada/Vancouver?

    Hey Chris,

    I'm in the Portland, OR and Vancouver, WA markets. Unfortunately, I don't know about the Vancouver, BC market or international investing

    0Reply
  • Yohanna Montero
    Member since 2020 · 1 post · 0 votes
    6y


    All properties for sale in one place, to find the best price 

    https://www.estateathome.com/

    0Reply
  • Travis Hanson
    Rental Property Investor · Lubbock, TX · Member since 2017 · 39 posts · 52 votes
    6y

    Lubbock Texas!

    2Reply
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