Should I stay or should I go now?

Question

Hello All,

This is my first post after reading Brandon's book and joining the community, so thank you for taking the time to read this. My situation is that I retired early from my tech job and after a couple years I got bored and my true passion is real estate, so I want to jump back into it. I currently have two investment properties in CA, with good equity and cash flow. I have about 300K in cash to invest, a yearly income of 100K and can qualify for 4 more conventional loans (I just did a refinance).

I live in Santa Cruz, CA which is very expensive, so I could get one or at most two duplexes in CA and probably not the best yeilds, or go out of state.  I then have to decide if I should do a duplex or a apartment building (which I have never done).  My questions are:

Should I go out of state and if so where would be best (I heard Cleveland and Memphis were good)?

If I go out of state should I look at an apartment building or stay with residential property for the best yield?

Is there another angle I hadnt thought of?

Thanks!

Neil

Amedeo M. · Answer

@Neil Polehn

I would diversify and invest in 3 different states.

It’s more complicated but you can “play” with cash flow VS appreciation and put your eggs in different baskets.

It takes time, but are you in a rush?  Post Covid will bring a lot of opportunities, unfortunately for some people a lot of foreclosures, for some others better prices.

Ulisses Terriquez · Answer

Hello @Neil Polehn, Santa Cruz is expensive. I live in Santa Cruz as well but I recently got my first property in the valley. Best of luck to what ever Decision you make.

Steve Morris · Answer

"Should I stay or should I go now?"

You should be a songwriter - That'd make a catchy lyric.

James Wise · Answer

If you decide on looking further into investing in Cleveland I recommend bookmarking The Ultimate Guide to Grading Cleveland Neighborhoods. It will definitely give you a lay of the land if this is where you end up investing. Lots of risk and quality of life variances between the neighborhoods here in town.

Neil Polehn · Answer

Hi James,

I have been reading and researching for at least 10 hours a day for the last two weeks, because when I get into something I am all in.  I have discovered that what your saying is exactly true, lots of sub markets even within a market.  I need to decide on an area and learn the sub markets, and Cleveland is on the list.  Thanks this is really helpful!

Jesse Daconta · Answer

@Neil Polehn

Have you looked into investing in apartment complexes as a passive investor? This angle is great as long as you don't mind giving up the reigns to experienced people who make all the decisions and deal with all of the headaches of real estate while you maintain all of the benefits of real estate (cash flow, forced appreciation, and a tax sheltering asset).

Best,

Jason Arms · Answer

@Neil Polehn hey Neil, having a property manager is going to be the best key for doing out of state property management,

I’m in memphis, and lots of experience with property managers @Douglas Skipworth

Would be too 5 people to meet with or network with for helping you get your team together.

He can help with all of the challenges in out to state investing.

I find deals for out of state investors too, I just know your going to benefit from knowing one of my mentors too!

I’d love to chat anytime and help you build a portfolio, best of Luck,

Jason Arms

Charles Cooper · Answer

@Neil Polehn

Welcome Neil

I would say depends on what you are looking for from your investment. Are you looking for cash flow (out of state) or equity/appreciation growth (CA)? I would definitely go units, can’t go bad with them. SFR is for getting  started or houehacking but seems like you already have experience. Go with units and you won’t regret it.

Should I stay or should I go now?

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