Investment properties < $100K purchase price

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Investment properties < $100K purchase price

Ben Hosseinzadeh
Investor · Orange County, CA · Member since 2020 · 7 posts · 0 votes

Hi everyone,

I'm an investor from California and am looking to purchase additional properties cash out of state.  I am priced out of California and can't compete with cash buyers here.  I'm looking for markets where I can purchase properties less than $100K.  Do any of you have any recommendations of where to start?  I've heard that Toledo OH is good (from members here), but wanted to learn about other markets.  My primary goal is to have good cash flow and hold long term.

Thanks in advance for your input.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y

100k can be fine or it can be not so good.

I have one little tidbit for OOS investors..  figure out the median price point of the area and invest at or slighty above. this will give you better area better schools better tenants.

So simple LOGIC will tell you that if the median for a given MSA is say 150k  that a 75K house will be half of the median.. not in a great area does not have a great tenant pool to choose from and will be very difficult for the OOS

if the Median in the area is say 100k which it could be then 80 to 100k could work..  just dont go buying for half or less of median 90% of the time those are the worse neighborhoods and IMHO only appropriate for locals who self manage.

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  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    You should only invest near where you live. Period.

    1Reply
  • Beau Watson
    Rental Property Investor · Atlanta, GA · Member since 2019 · 90 posts · 73 votes
    5y

    @Ben Hosseinzadeh

    Will you be refinancing said property anytime soon after cash purchase?

    I don’t totally disagree with the statement you should invest near you. It is MUCH easier to be close to your rentals. My furthest away is 2 hours and it sucks. Mine that is that far is also under the $100k mark. It is also my most troublesome rental. Although it cash flows AWESOME. Not really worth the trouble.

    0Reply
  • Ben Hosseinzadeh
    OP
    Investor · Orange County, CA · Member since 2020 · 7 posts · 0 votes
    5y

    @ Beau 

    @Beau Watson

    Yes, eventually I would likely refi the expand my investment opportunities.  I understand that long distance tenant management is troublesome.  I own a couple of rentals in Palm Springs area which is about 1.5 hours away from me.  

    any feedback on hiring a good property management company to help with tenant management for long distance investing?

    Thanks 

    0Reply
  • Beau Watson
    Rental Property Investor · Atlanta, GA · Member since 2019 · 90 posts · 73 votes
    5y

    @Ben Hosseinzadeh

    Can’t help you there. I manage all my own.

    I will tell you that it is extremely hard to find a bank to refinance a house that is under $100k. So not sure how soon you are going to be refinancing but just keep in mind that is an uphill battle. Going through it right now with mine.

    0Reply
  • Dave PoeppelmeierBusiness Member
    Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
    5y

    @Ben Hosseinzadeh Don't listen to @Account Closed, he has a major conflict of interest here! All joking aside, Toledo is a great place to invest for <$100k. You can get C to B- class SFH all day here, as well as some C class duplexes. Toledo is a cash flow town, you will get some appreciation but not much, especially if you are in the C-C+ areas of town. Let me know if you have any local questions!

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  • Davartay Miller
    Architect · Memphis, TN · Member since 2020 · 259 posts · 144 votes
    5y

    I would definitely say out of state investments are totally fine under one condition. Investors like you MUST have an excellent property management team behind you. It’s a MUST. You want a property manager that can communicate and one that you can trust! 

    Respectfully, 

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    Metro Detroit is one of the best markets in the country for investors.

    Just don't go in blindly.

    [email protected]248-209-6824
    Logical Property Management4.9451 Reviews
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    1Reply
  • Joe HammelBusiness Member
    Real Estate Agent · Metro Detroit, MI · Member since 2018 · 612 posts · 666 votes
    5y

    @Ben Hosseinzadeh

    Metro Detroit.

    $70-$110k seems to be the sweet spot.

    [email protected]248-422-1685
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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    I'd do some research on cheap homes.  The numbers on paper may look good, but you will have higher turnover and more problems.

    If you are investing in an area you aren't familiar with, make sure you have a good realtor to find a good area and property manager to get good tenants.

    0Reply
  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    The problem is OOS you can't compete with locals on the ground who are intimately familiar with the market, tenant base, contractors, Realtors, and may even self manage. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y

    100k can be fine or it can be not so good.

    I have one little tidbit for OOS investors..  figure out the median price point of the area and invest at or slighty above. this will give you better area better schools better tenants.

    So simple LOGIC will tell you that if the median for a given MSA is say 150k  that a 75K house will be half of the median.. not in a great area does not have a great tenant pool to choose from and will be very difficult for the OOS

    if the Median in the area is say 100k which it could be then 80 to 100k could work..  just dont go buying for half or less of median 90% of the time those are the worse neighborhoods and IMHO only appropriate for locals who self manage.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    4Reply
  • Ben Hosseinzadeh
    OP
    Investor · Orange County, CA · Member since 2020 · 7 posts · 0 votes
    5y

    Thank you all for the great feedback

    @Dave Poeppelmeier

    Thanks for the recommendations! I’ll DM you some questions.

    @Davartay Miller

    Totally agree with you. A great PM is in the plan and budget.

    @Drew Sygit and @Joe Hammel

    Thanks for the suggestion. Any specific zip codes you recommend and ones to stay away from?

    @Theresa Harris

    Thanks for the suggestion. I plan on working with a team locally.

    @Eric James

    Great points. I plan on working with a team locally to help with the investments and property management.

    @Jay Hinrichs

    Great tidbit Jay! Thanks for sharing. Makes total sense.

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    @Ben Hosseinzadeh look at Warren, Redford and Harper Woods in Detroit area

    [email protected]248-209-6824
    Logical Property Management4.9451 Reviews
    WebsiteView Page
    0Reply
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