Anyone buying rental properties in Oklahoma ?

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Tracy StreichPro Member
Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 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
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  • Nandy B.
    Rental Property Investor · Los Angeles CA · Member since 2016 · 128 posts · 55 votes
    6y

    @Deborah Burian

    Would love to connect with you, I have toyed with the idea of investing in Ok. Now I m actively working on it.

    Nandy

    0Reply
  • Jeff Filali
    Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Nandy B.:

    @Jeff Filali

    I grew up in Stillwater and I m looking into the Stillwater and surrounding area.

    What do you think about investing in Stillwater.

    I currently live in Texas and the market is ridiculous here.

    College towns can be a unique market. Some are good, some are bad. Personally I would stay away from Stillwater.  Yes there’s the college and you’d think it was a great opportunity because of renting by the room.  But it’s a very competitive market, if you pull up current available rentals, there’s 257 empty units!!  To me that’s a lot considering it’s the middle of college semester.

    1Reply
  • Jai Reddy
    Edmond, OK · Member since 2012 · 456 posts · 270 votes
    6y

    @Jeff Filali

    I think college rentals are best when within walking/cycling distance to college. How many available rentals are there within one mile of campus?

    0Reply
  • Pete M.
    Financial Advisor · Issaquah, WA · Member since 2017 · 243 posts · 141 votes
    6y

    @Guy Yoes My wife and I own all of the properties (via an LLC). We have a local PM who manages the day-to-day, but it's never completely hands off. Doing two evictions right now... when it rains, it pours, as they say. Happy to talk more offline, feel free to DM me.

    0Reply
  • Jovan Caballero
    Rental Property Investor · Apple Valley, CA · Member since 2018 · 40 posts · 5 votes
    6y

    I’ve looked in OKC and flew out there to visit the area and see the city. I liked some of what I saw and would consider something near Edmond. Is there any other places other than Edmond that work well for any of you? I would like to purchase a Multi maybe like a duplex but some of the nicer area ones I see are selling only half duplex? I’ve never seen that before until I went to OKC. What are good C areas that any of you would recommend looking into?

    0Reply
  • Priscilla Y.
    Rental Property Investor · Fremont, CA · Member since 2020 · 16 posts · 11 votes
    6y

    @Anthony Petrozzella Thanks for starting this great thread! Lots of info here and helped me understand better of the area... we've yet to make our trip to OKC to see the area ourselves!

    @Alex Waugh Would you mind me connecting with you about who helped you setup the LLC? It's our first out of state investments and would like to setup an LLC to separate them from the rentals we have here in CA...

    0Reply
  • Alex Waugh
    Property Manager · Edmond, OK · Member since 2019 · 20 posts · 21 votes
    6y
    Originally posted by @Priscilla Y.:

    @Anthony Petrozzella Thanks for starting this great thread! Lots of info here and helped me understand better of the area... we've yet to make our trip to OKC to see the area ourselves!

    @Alex Waugh Would you mind me connecting with you about who helped you setup the LLC? It's our first out of state investments and would like to setup an LLC to separate them from the rentals we have here in CA...

    Sure thing. I've got both of my LLC's based out of Oklahoma. I found out you can originate an LLC there even if the business is in another state. With Oklahoma, all you need is about half an hour on the Secretary of State's website and $100 to set one up. Applying for an EIN afterward is free too. There is only a $125 annual fee every year afterward. However, if you would like a professional to help you, I recommend Incfile. You can find them in the link here https://www.incfile.com/. They've helped me in the past and have been awesome. I'm not a tax advisor, but before you start, being from California I would make sure you talk to your tax advisor first so you don't get caught off guard by any Franchise Tax Board fees on the backend if there are any. I would also recommend anyone interested in LLCs to talk to their tax advisor first no matter what state they live in.

    Hope this helps!


    1Reply
  • Jason Gonzales
    Investor · Oklahoma City, OK · Member since 2015 · 41 posts · 22 votes
    6y

    Hello everyone. Raised in Okc and invest in Okc. I would love to connect with other investors in or out of town. Message me if you have any questions!

    0Reply
  • Tracy StreichPro Member
    Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 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
  • Anthony Petrozzella
    OP
    Nesconset, NY · Member since 2016 · 25 posts · 11 votes
    6y

    @Michael Slockers

    What are the better appreciation markets ?

    0Reply
  • Guy Yoes
    Rental Property Investor · Springfield, MO · Member since 2017 · 266 posts · 312 votes
    6y

    @Tracy Streich 

    Thank you for a candid conversation on OOS investing. I hope people will do their homework before signing up to purchase properties they have not vetted.

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

    @Jovan Caballero

    I would go for B or C rentals in areas of Edmond and Deer Creek school districts, C rentals in Piedmont (cheaper) and B/C in Yukon

    1Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y

    @Jovan Caballero I see the best cash flow in Midwest City, Del City and South OKC. 60-80k purchase price. 1% rent ro value ratio. Decent blue collar tenants. 

    *In Dec city there's a mandatory inspection at close and new tenant move-in where the city is essentially preventing slum lords. Normally no crazy items on that list. 

    *In South OKC there is a higher risk area just south of the river, you'll also potentially see the most appreciation there. 

    1Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y
    Originally posted by @Jai Reddy:

    @Jovan Caballero

    I would go for B or C rentals in areas of Edmond and Deer Creek school districts, C rentals in Piedmont (cheaper) and B/C in Yukon. 

    If you can find a deal sure! I wouldn't expect to be able to find much cash flow here. Great areas! Just tough to take anything home each month. 

    1Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y

    @Anthony Murphy Norman is tough. Often prices are too high and you just can't snag the deals. I know full time investors that are Norman focused and have totally paused until the next downturn. It does happen, but not often! Rent rate is also hard to project there, so staying conservative is important. 

    1Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y
    Originally posted by @Son Tran:

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

    Haha thank you! I was a big fan of those. It's tough to get multi in OKC in general and especially tough to get multi in Edmond where the numbers work, so they stand out. 

    1Reply
  • Michael Slockers
    Real Estate Entrepreneur · Owasso, OK · Member since 2015 · 220 posts · 154 votes
    6y
    Originally posted by @Anthony Petrozzella:

    @Michael Slockers

    What are the better appreciation markets?

    Anthony - 

    Google could tell you this better than I could. But if you look at the swing UP in markets like Denver, Dallas, coastals in the last 10 years, I think you'll see it has "appreciated" much more than the OK markets. Those markets may be more susceptible to a downturn as well. I consider the OK markets pretty stable and don't bounce as much or as fast as the some of these other hot-spots where appreciation has made many millionaires.

    0Reply
  • Tyler Howell
    Property Manager · Denver, CO · Member since 2016 · 107 posts · 43 votes
    6y

    I like the idea of investing in Lawton, OK. I was stationed there for 3 years - lots of federally-employed folks staying 2-3 years. Now you've got me thinking!

    0Reply
  • Kenan Heppe
    Rental Property Investor · Los Angeles · Member since 2020 · 28 posts · 7 votes
    6y

    Hey @Anthony Petrozzella, @Alyssa Dyer, @Mark Keeler, @Ron Todd

    I'm also interested in investing in OKC. I'd love to connect!

    0Reply
  • John Suarez
    New to Real Estate · Oceanside, CA · Member since 2019 · 8 posts · 4 votes
    6y

    I am also a new OSS investor and Tulsa county is where we're currently focusing, would love connecting with others investing in OK!

    0Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y

    @John Suarez & @Kenan Heppe Happy to answer any questions about OKC! 

    0Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y
    Originally posted by @Jai Reddy:

    What @Guy Yoes describes, as an 80s to 90s oil boom and then bust in Oklahoma has surely happened even in the last decade 2001-2017. I was laid off from Devon Energy in 2015, so I experienced the most recent bust.

    However, the city has been growing in areas outside of oil and gas, in fact, oil and gas is as low as can be fathomed, I do no think there is ever going to be another boom in oil (supply meets demand and can even out pace it.

    So, inspite of being in an oil bust since 2015, the city has been growing exponentially, still hidden behind the shadows of the growth in Dallas.

    I was a software engineer by trade and Ive seen more tech jobs (and new tech companies) here. Paycom is an Oklahoma City company, recently added to the S&P 500.

    Bottomline, OKC doesnt see high appreciation because the greed isn’t there yet. There is plenty of land adjoining the city where new neighborhoods are being built and selling well. Taxes are lower, land is relatively cheap but hazard insurance is relatively high.

     This all day! We don't have huge appreciation spikes, so even with drops in oil we don't see big drops. And we hold rent rates through the lows, especially in B and C class. 

    0Reply
  • Anthony Murphy
    Tyler, TX · Member since 2020 · 25 posts · 7 votes
    6y

    Was wondering if anyone could connect me with lenders they have worked with in OK appreciate your time and contact. Looking to be pre approved before speaking with agents.

    2Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y

    @Sam Botlon have you thought about doing a house hack? 

    0Reply
  • Alyssa Dyer
    Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
    6y
    Originally posted by @Anthony Murphy:

    Was wondering if anyone could connect me with lenders they have worked with in OK appreciate your time and contact. Looking to be pre approved before speaking with agents.

    Marcie Hines with Cornerstone will make your experience flawless. For a national lender, I'd look to Aaron Chapman with Security National. He's licensed in OK and has competitive rates. 

    1Reply
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