Out - of - State Investing

OP

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

5y

Originally posted by @Kent Kiess:

@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

Please share the numbers or the input you get from Stephen Brown

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Kenny Manchester

OP

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

5y

Originally posted by @Darius Ogloza:

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.

This is great input. I have followed some of these guidelines but could add more into my daily practices. Congrats on being in some of those very highly priced areas. Are you currently buying in these markets today? I feel as if I am priced out of the markets you mention, but maybe that is just a mindset adjustment I need to fix.

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Darius Ogloza

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

5y

@Kenny Manchester We are currently fixing and flipping here in Marin since the market has gone bat-sh*t crazy. Just last week lost out on a property that received 21 offers. Crazy and expensive but with high risk comes high reward (and more often than not low maintenance headaches)

In every market, there are deals. Deep, scary fixers. Probates (especially with our of state heirs).

Good luck! Your location reminded me I need to get out to Fenton's now that things are opening up.

1 Reply

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

5y

@Kenny Manchester I will be the opposing voice here.... IMO it is always best to invest in places you know and where you can have some control over asset management. Investing where you must rely on others to manage, repair, rent etc is IMO a good way to give away a lot of money.

Nobody will maintain your assets as well as you will... and even if you rely on a PM, if you are in the vicinity you can keep a sharp eye on things. The entire concept of OOS investing is to make money for the "team" not so much the asset owner.

My suggestion is to buy where/what you know... if you are in CA see if you can find areas that might make more sense, or look for those deals that will work for your goals. Being from the Bay Area I know how hard that can be, and I took myself and my money to Oregon.

I hear so many horror stories about OOS investing that it just would not be my first choice.....

good luck in whatever you do !

1 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:

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?

No problem!

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Allen Wu

Rental Property Investor · Member since 2021 · 335 posts · 193 votes

5y

@Kenny Manchester

Investor here. I invest in a couple of areas and happy to share my team’s contact info if you want to tap into my rental unit markets below. I have a solid team working on the acquisition and PM fronts. Just private message me and I’ll share the full list.

1) Southwest FL - Close to 1% Rule, cash flow and some appreciation.

2) San Antonio TX - Close to 1% Rule, cash flow and some appreciation.

3) Pasadena CA - Equity / appreciation play, now cash flowing $200 a month

4) San Gabriel Valley CA - Equity and appreciation play, not cash flowing yet

2 Reply

Jim K.

Rental Property Investor · Charlotte, NC · Member since 2017 · 271 posts · 259 votes

5y

@Kenny Manchester

I don't have anything to sell and I've said it before, but I would encourage you to follow where the big SFR funds are concentrating their efforts.

You want long term growth and strong fundamentals, not 20% cap rates.

2 Reply

Ross Yeager

Rental Property Investor · Mountain View, CA · Member since 2017 · 83 posts · 59 votes

5y

@Kenny Manchester

for me the pros are pretty simple. I have a great team on the ground, it’s a cash flow market, and is appreciating well as a bonus.

Cons: very competitive market, houses in the city are some of the oldest in the country so u have to be careful, and the city is very tenant friendly (getting worse lately).

I’m still bullish on the market and plan on continuing to grow a or this year.

I’d be happy to answer any further questions (dm me) as well and if you want to jump in I’ve got a lot of resources for you!

1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ 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.

where can you buy lots or tear downs in hot sub markets in Columbus lots for 50 to 60k new cool modern houses sell for 400k ? does this exist like in Indy and other cities ? if your short 30k housing units Maybe ? of course 50% renters does not help.. I would be interested to know if this exists in that city or hot pocket areas.. I funded turn key in Columbus prior to the 08 melt down those guys went under as did many of the properties. but i liked going there far more than other parts of Ohio for sure.

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Charlie Kimberly

Real Estate Agent · Portland, OR · Member since 2020 · 9 posts · 8 votes

5y

@Kenny Manchester I had similar questions before buying into two separate OOS markets, and ultimately it came down to A) the specific deal I could get & B) WHO I was working with.

I liked Memphis, and I couldn't find a great team in the area. When we looked into KCMO we found a great group to help us source off market properties + management. 👆 That's been gold & we will build our portfolio in KCMO for that reason.

Our most recent deal is in a market that I wouldn't even suggest... & we just had a golden deal fall in our lap so we took it. 👏

For me, it's all about the people &/or deal.

1 Reply

Janel Briones

Member since 2020 · 18 posts · 7 votes

5y

@Marc Rice - Hi Marc, If you would share map with me as well, Id greatly appreciate it.

0 Reply

Janel Briones

Member since 2020 · 18 posts · 7 votes

5y

@Charlie Kimberly

hi Charlie, Id like to connect with you on KCMO and how you were able to build your A-Team out there.

1 Reply

Saurabh Kasat

Member since 2020 · 1 post · 0 votes

5y

@Marc Rice, I am also interested in the columbus map. Please share.

0 Reply

Richan McCarthy

Member since 2021 · 1 post · 0 votes

5y

@Darius Ogloza this is great advice. Thank you for your insight!

0 Reply

Charlie Kimberly

Real Estate Agent · Portland, OR · Member since 2020 · 9 posts · 8 votes

5y

@janel Briones absolutely... the short answer was A LOT of zoom call interviews... and I'm happy to share the specifics too. shoot me a message and we can find a time to chat!

1 Reply

Crystal SmithPro Member

Moderator

Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ 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?

I'm originally from the area I chose, but wasn't living in the area at the time. Neither was my partner. We had investments in Orlando, DFW, South Carolina, St. Louis, Chicago, San Antonio,Atlanta.... along with some other places. These were mostly fix and flips w/ a few holds. How did we chose these cities? Over a period of time we had developed relationships in each city that allowed us to develop teams that we trusted. We eventually settled on Chicago for the majority of our business & managed it communting between South Carolina & Atlanta. Why Chicago? It's large (3rd largest MSA), diverse with over 100 submarkets for both fix and flip and buy & hold. The cost of doing business was/is reasonable compared to the coastal cities (We've tried to get deals closed on the coasts and could never make it work). And last but certainly not least- The airports. Because of it's location in the MidWest and the airports, there are direct flights to almost every market. So while Chicago started out as an OOS investment we ended up settling here & w/ the airports we can still manage our OOS investments.

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1 Reply

Marc RiceBusiness Member

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

5y

@Jay Hinrichs

You can find those in B class neighborhoods with those $350k+ sale numbers, it’s a little bit tougher in B-/C+ neighborhoods to get those sale prices on the finish end.

I personally do not see too many ground up developers in my circle because of the risk/team demands. Most are buying below market value with value add to the existing property.

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Kenny Manchester

OP

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

5y

Originally posted by @Darius Ogloza:

@Kenny Manchester We are currently fixing and flipping here in Marin since the market has gone bat-sh*t crazy. Just last week lost out on a property that received 21 offers. Crazy and expensive but with high risk comes high reward (and more often than not low maintenance headaches)

In every market, there are deals. Deep, scary fixers. Probates (especially with our of state heirs).

Good luck! Your location reminded me I need to get out to Fenton's now that things are opening up.

I am glad to hear you are still batting away at the market out there. It is crazy here as well. I would love to pick your brain sometime regarding finding deals in different markets as you have been in the game much longer than I have. I could even treat you to some Fentons... Talk soon.

1 Reply

Kenny Manchester

OP

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

5y

Originally posted by @Mary M.:

@Kenny Manchester I will be the opposing voice here.... IMO it is always best to invest in places you know and where you can have some control over asset management. Investing where you must rely on others to manage, repair, rent etc is IMO a good way to give away a lot of money.

Nobody will maintain your assets as well as you will... and even if you rely on a PM, if you are in the vicinity you can keep a sharp eye on things. The entire concept of OOS investing is to make money for the "team" not so much the asset owner.

My suggestion is to buy where/what you know... if you are in CA see if you can find areas that might make more sense, or look for those deals that will work for your goals. Being from the Bay Area I know how hard that can be, and I took myself and my money to Oregon.

I hear so many horror stories about OOS investing that it just would not be my first choice.....

good luck in whatever you do !

Hey Mary, Thanks for reaching out. I do agree it would be better to invest more locally. I could take a look at it again. I am looking into moving myself out of state as well. So I guess it would have been better to touch on where a good place to live/invest would be. How is Portland treating you? Thank you for your insight.

0 Reply

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

5y

@Kenny Manchester Portland is ok, Covid really put a damper on things as I was mid purchase when covid hit....

If you are looking to move then if possible wait to buy until you move and move to a place where you can invest. I found Eugene Oregon to be a great market.... Portland is tough given its new tenant laws, but the surrounding areas are good too.... but the advice I was given when I started out is to buy in a university town. This was great advice so I am passing it along.

2 Reply

Kenny Manchester

OP

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

5y

Originally posted by @Charlie Kimberly:

@Kenny Manchester I had similar questions before buying into two separate OOS markets, and ultimately it came down to A) the specific deal I could get & B) WHO I was working with.

I liked Memphis, and I couldn't find a great team in the area. When we looked into KCMO we found a great group to help us source off market properties + management. 👆 That's been gold & we will build our portfolio in KCMO for that reason.

Our most recent deal is in a market that I wouldn't even suggest... & we just had a golden deal fall in our lap so we took it. 👏

For me, it's all about the people &/or deal.

It is wonderful that you were able to find such a great team in KCMO. Sounds like they are doing wonders to help your expand. How did you come across such a great team? Did you just cold call, know someone, get recommended? Memphis is a tough place... I been there once a couple years ago and was not impressed. My family and I will be visiting Central to Eastern TN end of month. Would love to hear more.

0 Reply

Charlie Kimberly

Real Estate Agent · Portland, OR · Member since 2020 · 9 posts · 8 votes

5y

@Kenny Manchester lots of interviews & trial and error... I'm happy to share details if you're interested

1 Reply

Keleisha Carter

Investor · Tampa · Member since 2018 · 289 posts · 107 votes

5y

I just started investing in Memphis and researched the area for about a year first until I started investing and still learning. It was either Cleveland, Kansas City or Memphis and I chose Memphis for the following reasons:

1. Memphis is a high rental demand area as most of the residents rent.There is a great chance to achieve the 1% rule here or close because if your property is worth $80,000 you can get it rented for $795- $850

2. If you run your numbers right, your property can cash flow (that's my main goal)

3. One of Amazon's and Nike's Distribution center is located in Memphis and Amazon is expanding their facility. That tells you, that if those big companies are expanding in the area it has potential and they would have done their resesearch before making that step.

4. You also had Fedex Center in Memphis, Autozone and other huge facilities. With these facilities, their is a great chance for job demand and those people as well will need somewhere to live.

5. You get more bang for your buck, if you want to start investing in real estate

You can look on every single factor to make a decision for investing out of state. but as a newbie, all the big terms and acronyms can be overwhelming. I would say to do your research on different markets that can help you meet your goal and write them down in a book (at least that's what I did). Then I viewed the areas on google map and reached out to some agents and in talking with agents and turnkey providers I gain clarity in which market I wanted to invest in.

2 Reply

Caleb Brown

Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes

5y

I'm late to this but building a team is key. Without that OOS investing is pretty hard.

2 Reply

Bob Persichetti

Investor · NJ · Member since 2020 · 17 posts · 18 votes

5y

Originally posted by @Caleb Brown:

I'm late to this but building a team is key. Without that OOS investing is pretty hard.

By team are you referring to Turn-Key or is this an assembly you put together yourself?

I am looking to get back in and am leaning towards Turn-Key because I am time strapped.

1 Reply

Out - of - State Investing

Out - of - State Investing

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