Anyone buying rental properties in Oklahoma ?

Most Popular Reply

Tracy StreichPro Member
Real Estate Broker 路 Tulsa- OKC Oklahoma 路 Member since 2017 路 868 posts 路 801 votes
6y

I own properties on both the OKC and Tulsa markets.  I also manage about 600 doors in these markets.   Here are a few of the problems I run into with out of state investors.  

 1.   I can get 2% rule in Oklahoma.   Yes you can but the question is do you really want to be in that market.   You almost have to deal with the local housing authorities and accept vouchers.   This is fine if that is your target market.   They typically pay more.  The rub is we have had to pick up the pieces with OSS investors thinking they are getting a great deal.  In fact they are often dealing with people doing a very poor quality, low end renovation and selling it as turn key.   They then have a house that should rent for $800 per month but they get $1100 per month  with the voucher.   These houses can be bought for $70-80K turn key.   The problem is they are not in good areas.   The house will be worth the same or less in 5 years.   On top of this they bought a house with a sub par renovation.   Turn over cost on these houses tend to be double or triple that of a typical rental and occur almost annually. 

2. The next call it get is "I want to buy a house that needs some renovation and do the BRRRR method" I think the BRRRR method is great....if you are there every day and managing the renovation yourself. If you are paying an OSS contractor you can still get a great reno but is going to cost you. Then you have to have someone checking in on them. Is that your realtor or PM? You will need to pay them to do this as well. This is how this usually works. House ARV is advertised as $130K. Purchase is $75K and needs $30K renovation. Well the $30K always ends up 25% higher because you are not here to manage the renovation and ARV ends up at $120K. Now you have a $120K house that you are all in at $115K that rents for $1000 per month. Still not a bad deal but you spent 90-120 days to get it there and in reality you could have bought a rent ready home on the mls with the same spread.

3.   Next call   "Can you manage and help me get this house leased.   My realtor said it would rent for $1150 per month"   Well your realtor has clearly never rented a house in that particular neighborhood because the rent will be $950-$1000   No matter who you are using to buy the house just call a PM that has no commission on the line if you buy that house and ask them the rent range for that neighborhood. 

I love Oklahoma and I love OSS investors.  Just don't come in with blinders covering your eyes.   Do the due diligence.   I think you can buy and average home in Oklahoma and significantly out perform other markets especially any state touching the Pacific Ocean.  Good luck and welcome to Oklahoma.  Just remember just like where you live...if it is way to good to be true, well you know. 

[email protected]918-728-8080
11Reply
See this reply in the discussion

146 Replies

Jump to latestLatest
  • Son Tran
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 50 posts 路 33 votes
    6y

    @Alex Waugh

    Hi Alex, how much would that nice duplex cost you? What鈥檚 the square feet? And do you mind sharing your financing strategy?

    1Reply
  • David Bloomer
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 9 posts 路 4 votes
    6y

    @Son Tran

    That鈥檚 awesome! What kind of properties? I鈥檓 in OKC looking to get started in OKC.

    0Reply
  • Son Tran
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 50 posts 路 33 votes
    6y

    You are such a pro, @Alyssa Dyer. With one picture you can immediate spot it is Hampton Park 馃憦

    0Reply
  • Son Tran
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 50 posts 路 33 votes
    6y

    @David Bloomer

    I buy all kinds of properties, SFR and MFR, as long as the numbers make cents :)

    All the best with your first property in April 2020!

    1Reply
  • Alex Waugh
    Property Manager 路 Edmond, OK 路 Member since 2019 路 20 posts 路 21 votes
    6y



    @Alyssa Dyer

    Yes! Good eye! Thank you for the compliment. 

    @Son Tran

    Thanks for reaching out. The duplex cost $370,000, 6 Beds/6 Baths, 3,282 Sq. Ft. for both sides combined. For financing, I simply did a conventional commercial business loan through a bank (buying the property through my LLC) putting 20% down. I'm looking to do the same structure for when I buy a quad next. BiggerPockets is a great mentorship program through all their books, videos, podcasts. I'm building "the stack" as Brandon Turner talks about.

    2Reply
  • Son Tran
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 50 posts 路 33 votes
    6y

    @Alex Waugh

    That's nice for sharing the strategy, Alex. I just want to understand more about the strategy when you negotiated for the price. What is the ARV when you agreed to pay $370k for it? Did you put any rehab work into it? How much both units can be rented for?

    2Reply
  • Alex Waugh
    Property Manager 路 Edmond, OK 路 Member since 2019 路 20 posts 路 21 votes
    6y

    @Son Tran

    The listed price was actually $390K...$20K difference from the purchase price. I started at $360K, they dropped their price to $385K, and we went back and forth until landing on $380K if they paid all closing costs. We move forward and I get a home inspection that mentions the roof was worn way down for what it should be. I hired a roofing contractor to take a look and he said the whole thing needs to be replaced in 3-4 years due to hail and wind damage and not the best install job either. 

    After making the seller aware of this they used insurance to replace the whole roof because I said I wouldn't buy it otherwise. $17K later the job was done. The appraisal came back to value the property at $370,000 so I agreed to that paying my own closing costs. 

    The whole project was turnkey. I've been in California for several months and bought it while out-of-state. Each side rents for $1500/mo. 

    7Reply
  • Anthony Murphy
    Tyler, TX 路 Member since 2020 路 25 posts 路 7 votes
    6y

    @Alyssa Dyer Hi interested in knowing how is the Norman area? Thanks

    1Reply
  • Son Tran
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 50 posts 路 33 votes
    6y

    @Alex Waugh

    Thanks for sharing so great details. We can learn from each other everyday about deals. Each deal has its own characteristics :)

    1Reply
  • Alex Waugh
    Property Manager 路 Edmond, OK 路 Member since 2019 路 20 posts 路 21 votes
    6y

    @Son Tran

    I'm glad I can help! I agree, we always should learn from each other. That is why I enjoy BiggerPockets so much. I see you're from New York City. If you're looking to buy out-of-state I highly recommend this BiggerPockets published book. There is a lot of great info in there. Thanks for being an active investor!  

    1Reply
  • Son Tran
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 50 posts 路 33 votes
    6y

    @Alex Waugh

    Thanks for the intro. Coincidentally I have finished that book last week. :) It鈥檚 a great book to start with.

    2Reply
  • Mark Keeler
    Fremont, CA 路 Member since 2016 路 25 posts 路 19 votes
    6y

    @Jai Reddy. I put 10% on a pre-construction duplex outside of Denver.  I visited the property and the company managing the deal.  My first mistake was sending the money directly to the investment group (Mile High Capital) rather than through an escrow account. The founder (Rick Dryer) of Mile High Capital Group, was sentenced in Denver District Court Friday to 132 years in state prison on charges of securities fraud, theft, and violation of Colorado's organized crime laws. District Court Judge Anne Mansfield also ordered Dryer to pay $3.4 million in restitution.  How's he supposed to pay while he spends the rest of his life in prison?

    I was offered another deal that felt even shadier after the company was put into receivership.  I should have used a real estate attorney to check out the contract. 

    Regarding turnkey properties, I was heading in that direction just to get something done.  A turnkey provider that is involved in Bigger Pockets said if I really want to become an investor, I need to learn the process myself rather than handing over money and let someone else do the work for me.  The owners of the company said they will take money if I insist.

    My plan is to network with people in OKC to learn the market and make my first deal.

    I think turnkey investment properties are a great way for someone to start learning the process with little risk. 

    I want to take the risk and buy my own property.

    2Reply
  • Jeff Filali
    Rental Property Investor 路 Broken Arrow, OK 路 Member since 2016 路 1k+ posts 路 1k+ votes
    6y

    I live in Broken Arrow (Tulsa Suburb) and own a lot of rentals. 

    2Reply
  • Mark Keeler
    Fremont, CA 路 Member since 2016 路 25 posts 路 19 votes
    6y

    @Alex Waugh,

    Did you use the Bigger Pockets rental calculator for your duplex deal?


    0Reply
  • Alex Waugh
    Property Manager 路 Edmond, OK 路 Member since 2019 路 20 posts 路 21 votes
    6y

    @Mark Keeler,

    No, even though I know BP has a great rental calculator, I use an excel spreadsheet for my cash flow analysis. You can create your own or download free templates from google. They might not have the graphs and other visuals like BP, but the numbers are there. 

    1Reply
  • Harrison Sharp
    Real Estate Broker 路 DFW 路 Member since 2015 路 350 posts 路 270 votes
    6y

    @Anthony Petrozzella

    @Dylan B.

    1Reply
  • Anthony Petrozzella
    OP
    Nesconset, NY 路 Member since 2016 路 25 posts 路 11 votes
    6y

    @Alex Waugh

    Are you using a real estate agent and/or a property manager ? I鈥檓 looking for an introduction if possible.

    0Reply
  • Anthony Petrozzella
    OP
    Nesconset, NY 路 Member since 2016 路 25 posts 路 11 votes
    6y

    @Alex Waugh

    I鈥檓 reading that book at this very moment. I even bought it on audiable so I can listen to it while I drive. Lol

    0Reply
  • Cameron SchmidtPro Member
    Member since 2018 路 1 post 路 2 votes
    6y

    Im living in Moore currently, i have 3 doors total, the last door i opened was in Del City. HEADS UP! they require a city inspection to turn on utilities in any new name. Most of their homes are pre 1970s which will be out of code and caught me off gaurd. Im looking into buying multi-family homes. Hot spots are in the midtown area but are being scooped up by big money companies to gentrify the area. Its booming!

    2Reply
  • Mark Keeler
    Fremont, CA 路 Member since 2016 路 25 posts 路 19 votes
    6y

    @Alex Waugh,

    I ran your property through the BP rental property calculator.  Can you advise what you used for expenses such as loan fees, points, cap-ex, property management fees, taxes, and insurance?  The numbers and negotiations that you provided are helpful.  Thanks!. 

    0Reply
  • Jai Reddy
    Edmond, OK 路 Member since 2012 路 456 posts 路 270 votes
    6y

    @Mark Keeler

    Thanks for sharing your lesson learned.

    I鈥檝e been in Oklahoma City since 2008, right when the GFC commenced. I kept listening to NPRs talks on the economic doom especially in real estate, especially in markets of high appreciation like Phoenix, Las Vegas, etc. but I never saw anything that gloomy in Oklahoma City. We bought our home in 2009 at a price higher than what previous owner bought for, certainly not a recession price. So, appreciation and depreciation during a recession are nominal. Its a cash flow play here with fairly low property taxes (but relatively higher insurance).

    I however am not playing in the residential SFH space right now, in fact I have my only SFH rental up for sale as I have better uses of the equity in there than as a residential rental.

    If I were to invest in SFH, I might do the Piedmont area. It's growing in population but the boom hasn't reached there yet, so large swaths of land yet to be developed. It's fairly affordable, my parents have a rental there.

    1Reply
  • Jared Stine
    Rental Property Investor 路 Danville, CA 路 Member since 2017 路 6 posts 路 3 votes
    6y

    The Oklahoma market is on my radar since I grew up in the area. I'm happy to connect and chat with anyone about opportunities or share what I know of some of the markets. I'm mostly familiar with the central area (not Tulsa) and have lived in Choctaw, Midwest City, and NW OKC (Lake Hefner) areas. 

    1Reply
  • Son Tran
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2019 路 50 posts 路 33 votes
    6y

    @Jared Stine

    Jared, you should come back and buy OKC market. The price here is more competitive than CA and will make positive cashflow for you, plus the fact that you are native from OK :)

    2Reply
  • Jeff Filali
    Rental Property Investor 路 Broken Arrow, OK 路 Member since 2016 路 1k+ posts 路 1k+ votes
    6y
    Originally posted by @Son Tran:

    @Jared Stine

    Jared, you should come back and buy OKC market. The price here is more competitive than CA and will make positive cashflow for you, plus the fact that you are native from OK :)

    Truth!!  Oklahoma prices are great.  Your money goes so much further here. All my rentals are 2% or better and I have more deals then I can buy myself. I literally cherry pick and pass up a lot of deals that would be better then west coast numbers.  

    0Reply
  • Jared Stine
    Rental Property Investor 路 Danville, CA 路 Member since 2017 路 6 posts 路 3 votes
    6y

    @Son Tran

    That鈥檚 my plan. I鈥檒l keep my CA job & pay while investing in other areas. I鈥檓 planning on the OK market since I鈥檓 familiar with it and also still have a few connections there.

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free