Out - of - State Investing

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6 Reply

Brandon SturgillBusiness Member

Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes

5y

We can do this for hours...ROI numbers are all "predictive" unless you are syndicating or investing in large commercial properties...market strength and the relationships between purchase price and rental income are about all you need to know to pull the trigger and be successful in a strong market...and there are 50-comparable markets in the US right now

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4 Reply

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

5y

Originally posted by @Kenny Manchester:

Hello BP Community,

I want to start an in depth conversation regarding out-of-state investing. I have seen and read a couple posts on here with most people usually suggesting the City or State where they live/work without much explanation or comparison with other areas. Some others are usually trying to sell their service. Another thing I see is people suggesting different cities without any explanation or details involving why they suggest there. It would be great to see a breakdown of what neighborhood, was it due to you being able to create an "A" team, were looking for large appreciation and/or cashflow, job growth, population growth, large business influx? What really made the area you chose click for you? What kind of cap rate, ROI, ROE, are you seeing in these areas currently?

I know there has to be a lot of investors out there such as myself that have put in a lot of research and still can't put there finger on one let alone two areas to invest in. I have recently visited NC, ID, UT, and NV to check out the areas first hand. I am headed to TN next month. I have some capital I am looking to move out of the CA market. The reason is to not get hit with capital gains (had to sell). I am not asking you all to do all the research and pass on your hard work... I just think it would be great to pick all of your brains and let the information flow to the whole community. I rely heavily on referrals with life and business so why not do so with my RE business as well.

I think this will be great for all. Thanks in advance!

I would check out Columbus, Ohio for out-of-state investing. A lot of investors have been coming here due to our increasing job and population growth.

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5 Reply

Stephen Brown

Real Estate Broker · Huntsville, AL · Member since 2019 · 1k+ posts · 872 votes

5y

As you have read about Columbus, I'd also recommend you look at Toledo, Ohio. We have a diverse job market, great schools; however, we have lower price points than Columbus. You can do very well in both markets.

4 Reply

Rich O'Neill

Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes

5y

@Ross Yeager should join this conversation. He lives in CA and has done quite a bit of OOS investing. He is one of our clients in Philly. Hopefully he can add some more color to the reasons this was one of the areas he chose.

I happen to live here and do work here, but a few reasons for investing here (Philly MSA, including Delaware, Montgomery, and Bucks counties):

1. Cost of living in most areas is significantly less than nearby NYC and DC, but still very easily accessible to both. Still get the city feel for NYC migrants, or you can have more sprawling suburban like parts of DC.

2. Meds and Eds- some of the best hospitals and universities in the country.

3. Moderate climate- Some snow, but most years not major. Manageable temps most of the year.

4. Several massive banks headquartered in nearby Wilmington (DE tax/legal structure is famously beneficial for large companies).

Those are all broad strokes. Within the MSA there is a ton of variation in strategies, price points, rent values, LT legislation, etc. Each area could warrant its own post. I post a lot about Delaware County as that is my favorite submarket to invest, but everyone has different goals. Philly has something for everyone.

6 Reply

Andrew PostellPro Member

Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes

5y

@Brandon Sturgill Columbus is larger than Fort Worth, Texas?

2 Reply

Lee RipmaPro Member

Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes

5y

@Kenny Manchester

I did an in depth anaylis of markets, you can read about that below. Once you find a market, then you need to find a submarket within that market. I think submarkets are more important than markets. In other words, you can find a submarket within a lot of markets that will work for you. So instead of going to lots of different places go to 1-2 places on the list and then find a good submarket within in. That's my advice and what I personally do OOS investing. I live in CA, invest in Kansas City, and am going to add another OOS market, probably San Antonio. I just went there in December and picked my target submarkets. I'm waiting for a down leg in KC to sell and then I'll exchange into a small MF in San Antonio to get going there.

https://www.vestmap.com/the-to...

It's 100% possible to invest out of state. I also invest in CA but you really need a ton of capital to do it. When I started I didn't have the capital to invest in my home market (San Diego at the time, now LA) so I went out of state. I talk about it on my podcast 373. I have a lot of resources at VestMap.com to help others do it. I'm a huge fan of out of state investing. Real estate investing in any market is hard at first but you'll get the hang of it.

I hope this helps and if you don't want to keep your capital in CA what alternative do you really have? Figure out OOS investing, you'll be glad you did.

Podcast Guest on Show #373

16 Reply

Brandon SturgillBusiness Member

Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes

5y

@Andrew Postell yes...significantly

Metro Statistical Area...not so much

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Brandon SturgillBusiness Member

Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes

5y

@Andrew Postell...I guess it depends on the source... most city population stats for 2020 look the same as far as population for Columbus and Fort Worth...Columbus has not officially overtaken Fort Worth...but it will in the next 2-years....then onto the top 10 largest cities in the US in the next 10-years.

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OP

Vacaville, CA · Member since 2018 · 36 posts · 22 votes

5y

@Brandon Sturgill

You have provided some great information regarding Columbus Ohio. I have slightly looked at Columbus and Cleveland as I always find a debate on the forums about which one is better to invest into.

Is there any sub markets in the Columbus area you recommend?

OP

Vacaville, CA · Member since 2018 · 36 posts · 22 votes

5y

Originally posted by @Remington Lyman:

Originally posted by @Kenny Manchester:

Hello BP Community,

I want to start an in depth conversation regarding out-of-state investing. I have seen and read a couple posts on here with most people usually suggesting the City or State where they live/work without much explanation or comparison with other areas. Some others are usually trying to sell their service. Another thing I see is people suggesting different cities without any explanation or details involving why they suggest there. It would be great to see a breakdown of what neighborhood, was it due to you being able to create an "A" team, were looking for large appreciation and/or cashflow, job growth, population growth, large business influx? What really made the area you chose click for you? What kind of cap rate, ROI, ROE, are you seeing in these areas currently?

I know there has to be a lot of investors out there such as myself that have put in a lot of research and still can't put there finger on one let alone two areas to invest in. I have recently visited NC, ID, UT, and NV to check out the areas first hand. I am headed to TN next month. I have some capital I am looking to move out of the CA market. The reason is to not get hit with capital gains (had to sell). I am not asking you all to do all the research and pass on your hard work... I just think it would be great to pick all of your brains and let the information flow to the whole community. I rely heavily on referrals with life and business so why not do so with my RE business as well.

I think this will be great for all. Thanks in advance!

I would check out Columbus, Ohio for out-of-state investing. A lot of investors have been coming here due to our increasing job and population growth.

Thanks for the response. Can you suggest any sub markets in the Columbus area that people should investigate deeper?

OP

Vacaville, CA · Member since 2018 · 36 posts · 22 votes

5y

Originally posted by @Stephen Brown:

As you have read about Columbus, I'd also recommend you look at Toledo, Ohio. We have a diverse job market, great schools; however, we have lower price points than Columbus. You can do very well in both markets.

Thank you for adding your input. It would be nice to get a little more rectification regarding the Toledo market. Any input would be appreciated as Toledo is you home market which makes you the most knowledgeable in this market.

Kindly,

OP

Vacaville, CA · Member since 2018 · 36 posts · 22 votes

5y

Originally posted by @Rich O'Neill:

@Ross Yeager should join this conversation. He lives in CA and has done quite a bit of OOS investing. He is one of our clients in Philly. Hopefully he can add some more color to the reasons this was one of the areas he chose.

I happen to live here and do work here, but a few reasons for investing here (Philly MSA, including Delaware, Montgomery, and Bucks counties):

1. Cost of living in most areas is significantly less than nearby NYC and DC, but still very easily accessible to both. Still get the city feel for NYC migrants, or you can have more sprawling suburban like parts of DC.

2. Meds and Eds- some of the best hospitals and universities in the country.

3. Moderate climate- Some snow, but most years not major. Manageable temps most of the year.

4. Several massive banks headquartered in nearby Wilmington (DE tax/legal structure is famously beneficial for large companies).

Those are all broad strokes. Within the MSA there is a ton of variation in strategies, price points, rent values, LT legislation, etc. Each area could warrant its own post. I post a lot about Delaware County as that is my favorite submarket to invest, but everyone has different goals. Philly has something for everyone.

Appreciate the reply. I have some family in Pittsburgh. Have not really thought about the Philly market. You have some great input regarding the market as a whole and the Delaware County sub market. I will check it out. It would be great to get Ross on here with his experiences as well.

Thank you,

https://www.vestmap.com/the-to...

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

5y

Originally posted by @Lee Ripma:

@Kenny Manchester

I did an in depth anaylis of markets, you can read about that below. Once you find a market, then you need to find a submarket within that market. I think submarkets are more important than markets. In other words, you can find a submarket within a lot of markets that will work for you. So instead of going to lots of different places go to 1-2 places on the list and then find a good submarket within in. That's my advice and what I personally do OOS investing. I live in CA, invest in Kansas City, and am going to add another OOS market, probably San Antonio. I just went there in December and picked my target submarkets. I'm waiting for a down leg in KC to sell and then I'll exchange into a small MF in San Antonio to get going there.

It's 100% possible to invest out of state. I also invest in CA but you really need a ton of capital to do it. When I started I didn't have the capital to invest in my home market (San Diego at the time, now LA) so I went out of state. I talk about it on my podcast 373. I have a lot of resources at VestMap.com to help others do it. I'm a huge fan of out of state investing. Real estate investing in any market is hard at first but you'll get the hang of it.

I hope this helps and if you don't want to keep your capital in CA what alternative do you really have? Figure out OOS investing, you'll be glad you did.

I think you should look to Columbus Ohio. :)

2 Reply

https://www.vestmap.com/the-to...

OP

Vacaville, CA · Member since 2018 · 36 posts · 22 votes

5y

Originally posted by @Lee Ripma:

@Kenny Manchester

I did an in depth anaylis of markets, you can read about that below. Once you find a market, then you need to find a submarket within that market. I think submarkets are more important than markets. In other words, you can find a submarket within a lot of markets that will work for you. So instead of going to lots of different places go to 1-2 places on the list and then find a good submarket within in. That's my advice and what I personally do OOS investing. I live in CA, invest in Kansas City, and am going to add another OOS market, probably San Antonio. I just went there in December and picked my target submarkets. I'm waiting for a down leg in KC to sell and then I'll exchange into a small MF in San Antonio to get going there.

It's 100% possible to invest out of state. I also invest in CA but you really need a ton of capital to do it. When I started I didn't have the capital to invest in my home market (San Diego at the time, now LA) so I went out of state. I talk about it on my podcast 373. I have a lot of resources at VestMap.com to help others do it. I'm a huge fan of out of state investing. Real estate investing in any market is hard at first but you'll get the hang of it.

I hope this helps and if you don't want to keep your capital in CA what alternative do you really have? Figure out OOS investing, you'll be glad you did.

Hello fellow Californian,

Thank you for providing this great article. I will absolutely utilize your research into OOS investing.

I couldn't agree more that the sub markets become the most important aspect to investing OOS. I have found information overload on the forums regarding to investing in certain areas vs other areas. This is why I am a true believer of getting my boots on the ground to really investigate a state, city, and neighborhoods. I know this isn't possible for everyone. I have found that creating a team gives you way more insight to the area. BP is a great avenue to do so. After visiting ID I created a team to get a in depth analysis on the area, this was the final needed piece to the puzzle. ID is a tough market right now unless you have large capital to beat out the competition.

My CA properties have grown in size so much the ROE is not great. My money can go much further if I take the money out of state. I appreciate the kind words of encouragement in my OOS venture. I am sure I will be successful, just need to get the small amount of fear out of my brain at going OOS. I live on research research research and then pull the trigger. I am literally reading @David Greene book on Long Distance Real Estate Investing again, love the book! He is also here in California which makes it relate even more.

I can't wait to journey outside CA. I appreciate the time you took to listen and respond.

2 Reply

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

5y

Originally posted by @Kenny Manchester:

Originally posted by @Remington Lyman:

Originally posted by @Kenny Manchester:

Hello BP Community,

I want to start an in depth conversation regarding out-of-state investing. I have seen and read a couple posts on here with most people usually suggesting the City or State where they live/work without much explanation or comparison with other areas. Some others are usually trying to sell their service. Another thing I see is people suggesting different cities without any explanation or details involving why they suggest there. It would be great to see a breakdown of what neighborhood, was it due to you being able to create an "A" team, were looking for large appreciation and/or cashflow, job growth, population growth, large business influx? What really made the area you chose click for you? What kind of cap rate, ROI, ROE, are you seeing in these areas currently?

I know there has to be a lot of investors out there such as myself that have put in a lot of research and still can't put there finger on one let alone two areas to invest in. I have recently visited NC, ID, UT, and NV to check out the areas first hand. I am headed to TN next month. I have some capital I am looking to move out of the CA market. The reason is to not get hit with capital gains (had to sell). I am not asking you all to do all the research and pass on your hard work... I just think it would be great to pick all of your brains and let the information flow to the whole community. I rely heavily on referrals with life and business so why not do so with my RE business as well.

I think this will be great for all. Thanks in advance!

I would check out Columbus, Ohio for out-of-state investing. A lot of investors have been coming here due to our increasing job and population growth.

Thanks for the response. Can you suggest any sub markets in the Columbus area that people should investigate deeper?

North Linden, South of Main, Vassor Village, Woodland Park, MT Vernon, Milo-Grogan, Franklinton, Merrion Village, Hungarian Village, Southern Orchards, Driving Park, Olde Towne East, Franklin Park, King Lincoln, Old Oaks, Livingston Park are all but not limited to some areas in Columbus, Ohio I think will gentrify quickly and make for great long term buy and holds.

[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals

Reafco512 Reviews

Website View Page

[email protected]614-363-2787

Marc RiceBusiness Member

Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes

5y

I have a neighborhood map of Columbus with baseline cap rates and neighborhood grades that I share with the investors I work with to help them familiarize themselves with the city. If you need that feel free to reach out.

Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews

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6 Reply

Brandon SturgillBusiness Member

Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes

5y

Hey @Marc Rice I'd like to see it...

Thanks

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Kent Kiess

Rental Property Investor · Brea, CA · Member since 2016 · 71 posts · 34 votes

5y

@Marc Rice I would be interested in seeing that map also.

Thanks Marc

Kent Kiess

Rental Property Investor · Brea, CA · Member since 2016 · 71 posts · 34 votes

5y

@Stephen Brown would enjoy having a conversation about Toledo. I keep running numbers and I’m not getting a good population growth or rent increases.

Thanks

Jeron Smith

Rental Property Investor · Gillette, WY · Member since 2020 · 2 posts · 2 votes

5y

@Marc Rice I'd be interested in seeing that map as well if you are sharing! I'm personally interested in the multifamily market for the area.

Jeff Wydra

Rental Property Investor · Montréal, QC Canada · Member since 2019 · 28 posts · 17 votes

5y

@Marc Rice

That's a very generous offer and I'd love to see it as well. Thanks Marc

Mynor Perez

Developer · Atl, GA · Member since 2021 · 3 posts · 0 votes

5y

I’ll say Alta ga and surrounding areas is good for MANY MANY reasons which are too much to type 👍

Darius Ogloza

Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes

5y

You can spend the rest of your life comparing cites and states across the U.S. and still, in the end, make a poor investment decision. Every metro area has great, good, fair and poor investment opportunities. Whether you invest in your own backyard or 3,000 miles away, being able to spot good opportunities is the key. What constitute good opportunities will depend on your investment goal and time horizon (wealth building? cash flow?), the amount of capital available to you, your risk tolerance and your capacity to conduct diligence. We invest in our own backyard (SF/Marin County) as well as, both currently and in the past 20 years, in Davis CA, Las Vegas, Rochester NY, Chicago and St. Pete area. Here is a sketch of our process for finding new markets:

If you are going out of area, start with a metro with which you have some familiarity. You have family there? Friends? You like to visit? Many online resources exist that will allow you to break the metro into neighborhoods. Having some personal experience with the area will help immensely in this regard. Once you develop this map, focus on those neighborhoods/areas consistent with your level of risk tolerance and available capital. Are you looking for high end properties, working class areas, etc? From there, check rent to sale price ratios in the selected neighborhoods. Look into the area's property tax assessment practices and rates (unlike mortgages property taxes are forever). Subscribe to the online version of the local paper for a sanity check on your neighborhood assessments. Lastly, pay a meaningful visit to the neighborhoods you have selected. If one or more neighborhoods continue to appear promising, meet up with one or more local realtors and select the best one to work with in helping you find properties.

Once you have this process down pat, you can drill down in pretty much any metro in a week or two.

9 Reply

OP

Vacaville, CA · Member since 2018 · 36 posts · 22 votes

5y

Originally posted by @Remington Lyman:

Originally posted by @Kenny Manchester:

Originally posted by @Remington Lyman:

Originally posted by @Kenny Manchester:

Hello BP Community,

I want to start an in depth conversation regarding out-of-state investing. I have seen and read a couple posts on here with most people usually suggesting the City or State where they live/work without much explanation or comparison with other areas. Some others are usually trying to sell their service. Another thing I see is people suggesting different cities without any explanation or details involving why they suggest there. It would be great to see a breakdown of what neighborhood, was it due to you being able to create an "A" team, were looking for large appreciation and/or cashflow, job growth, population growth, large business influx? What really made the area you chose click for you? What kind of cap rate, ROI, ROE, are you seeing in these areas currently?

I know there has to be a lot of investors out there such as myself that have put in a lot of research and still can't put there finger on one let alone two areas to invest in. I have recently visited NC, ID, UT, and NV to check out the areas first hand. I am headed to TN next month. I have some capital I am looking to move out of the CA market. The reason is to not get hit with capital gains (had to sell). I am not asking you all to do all the research and pass on your hard work... I just think it would be great to pick all of your brains and let the information flow to the whole community. I rely heavily on referrals with life and business so why not do so with my RE business as well.

I think this will be great for all. Thanks in advance!

I would check out Columbus, Ohio for out-of-state investing. A lot of investors have been coming here due to our increasing job and population growth.

Thanks for the response. Can you suggest any sub markets in the Columbus area that people should investigate deeper?

North Linden, South of Main, Vassor Village, Woodland Park, MT Vernon, Milo-Grogan, Franklinton, Merrion Village, Hungarian Village, Southern Orchards, Driving Park, Olde Towne East, Franklin Park, King Lincoln, Old Oaks, Livingston Park are all but not limited to some areas in Columbus, Ohio I think will gentrify quickly and make for great long term buy and holds.

Thank you sir. I will take your advice and research the area. I hope you don't mind if I reach out with a question or two in the coming month?