Best states for multi family investing?

Multi-Family and Apartment Investing
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Best states for multi family investing?

Robert Pritchett
Member since 2023 · 24 posts · 12 votes

I’m looking to invest outside of my home state, what states are best for properties in the 100k-300k range? I am looking for reasonable cash flow and appreciation.   Thanks again for any info provided.

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Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
3y
Quote from @Robert Pritchett:

I’m looking to invest outside of my home state, what states are best for properties in the 100k-300k range? I am looking for reasonable cash flow and appreciation.   Thanks again for any info provided.


It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s long-distance investing strategy and consists of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to invest in any market confidently.

As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio. I am also looking to invest in Cincinnati and Cleveland.
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  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    3y

    @Robert Pritchett

    Hi Robert. To be fast, highly recommend Columbus, Cincinnati, and Northern Ky. 

    Columbus has great job growth. Cincinnati has steady growth and a strong rental market, as well as northern ky. 

    all 3 are landlord friendly as well. I can't speak for Columbus but in Greater Cincinnati (Cincinnati/ Northern Ky), finding a property at 200k is possible and even better once you start getting towards 300k 

    I am a realtor in Cincinnati (soon to be NKY as well, like another couple weeks tops), let me know if I can help you with anything else Robert!

    [email protected]859-443-4952
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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    3y
    Quote from @Robert Pritchett:

    I’m looking to invest outside of my home state, what states are best for properties in the 100k-300k range? I am looking for reasonable cash flow and appreciation.   Thanks again for any info provided.


    It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s long-distance investing strategy and consists of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to invest in any market confidently.

    As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio. I am also looking to invest in Cincinnati and Cleveland.
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  • Peter Dorinsky
    Real Estate Agent · Columbus, OH · Member since 2020 · 149 posts · 193 votes
    3y
    Quote from @Robert Pritchett:

    I’m looking to invest outside of my home state, what states are best for properties in the 100k-300k range? I am looking for reasonable cash flow and appreciation.   Thanks again for any info provided.

    Hey Robert, I'd also recommend checking out Columbus, Ohio. Many big-tech companies are either moving into the market or expanding their business here, which is contributing to rapid economic development. Intel is investing $20 billion to build chip manufacturing plants in Licking County, which is projected to create 30,000 new jobs. This is the largest private investment in state history. In addition to Intel, other big companies like Google, Amazon and Facebook are also expanding their business here in Columbus. Columbus is also home to The Ohio State University, one of the largest public universities in the country.

    Columbus is a great hybrid market if you're looking for cash-flow and appreciation. If you're looking for a landlord-friendly state with homes at a lower price-point and lower taxes Columbus could be a good fit. If you're interested in learning more about the market I'd be happy to connect.

    2Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    3y
    Quote from @Robert Pritchett:

    I’m looking to invest outside of my home state, what states are best for properties in the 100k-300k range? I am looking for reasonable cash flow and appreciation.   Thanks again for any info provided.

    Hi Robert, I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!

    [email protected]614-300-7535
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  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    @Robert Pritchett
    I would definitely recommend Columbus, OH. It's a solid hybrid market of cash flow and appreciation. Columbus has lots of job opportunities and population growth. It’s great for investing from out of state since it’s landlord-friendly and has a low barrier of entry and cash flows.

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  • Doug Spence
    Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes
    3y

    @Robert Pritchett I've had success investing out of state in Wisconsin and Oklahoma. I'm still a big fan of Oklahoma, specifically Oklahoma City and Tulsa. 

    I've done 2 out of state BRRRR's and 2 out of state flips in Oklahoma! Don't hesitate to reach out if I can help with anything.

    @Cara Sides is your go-to agent and PM for Tulsa. 

    3Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    3y

    @Robert Pritchett

    We think the Midwest is a GREAT place for OOS investors to consider!

    YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods:

    https://www.biggerpockets.com/...

    (BP search feature can be problematic, so we’ve also added links @ our website under View Cities & Neighborhoods We Service)

    Your biggest question shouldn't be WHERE to invest, but HOW you will invest!

    Many OOS investors set themselves up for failure because they don't invest the time to ACTUALLY understand:

    1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

    2) The Class of the PROPERTY they are buying - which is relative to the overall area.

    3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

    4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

    5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

    6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

    7) That OOS property Class rankings are often different than the Class ranking of the local market they live.

    8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.

    9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.

    10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.

    11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
    ***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.

    https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799

    Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?

    Let us know if we can help in any other way.😊

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  • Jayson Cain
    Lender · Manhattan Beach, CA · Member since 2017 · 423 posts · 268 votes
    3y

    Hi @Robert Pritchett,

    I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals. I've started looking at Columbus because my business partners have found success doing Mid Term Rentals there and the returns are solid.

    I've also helped other investors with their DSCR loans and flip projects in Columbus. Happy to share my experiences and chat with you more if you're interested.

    0Reply
  • Robert Pritchett
    OP
    Member since 2023 · 24 posts · 12 votes
    3y

    Thanks for all of the input I had a few of these locations on my list and this will help me make that next step with my choice of location!

    0Reply
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    3y
    Quote from @Robert Pritchett:

    I’m looking to invest outside of my home state, what states are best for properties in the 100k-300k range? I am looking for reasonable cash flow and appreciation.   Thanks again for any info provided.


    Hey Robert, Ohio is an awesome market to invest in. I just read a published article today by the Columbus Dispatch that Franklin County home values are supposed to rise by 30-35% with re-appraisal. We have had nearly a 39% property value gain from 2019 to 2022 in the Columbus market. 

    Is your plan to buy turnkey or do BRRRR/Fix&Flips?

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  • Robert Pritchett
    OP
    Member since 2023 · 24 posts · 12 votes
    3y

    My price range of 100k-200k preferably in the mid 100s may limit turnkey, but that is ideal. I am open to either turnkey or BRRRR but not interested in fix and flip at this time.

    0Reply
  • Robert Pritchett
    OP
    Member since 2023 · 24 posts · 12 votes
    3y

    I have narrowed the search down to Columbus as the 1st choice and Cincinnati as the 2nd choice. I am moving to look for properties up to 100k-200k preferably in the mid 100s. Any suggestions for attorneys and property management in the 2 areas? When it comes to out-of-state investing I am guessing I have to register my LLC based in NJ with Columbus for the purposes of taxes etc. correct? Lastly any weird tax setups in either of the 2 cities that I should be on the lookout for? Thanks for any feedback.


    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    3y
    Quote from @Robert Pritchett:

    I have narrowed the search down to Columbus as the 1st choice and Cincinnati as the 2nd choice. I am moving to look for properties up to 100k-200k preferably in the mid 100s. Any suggestions for attorneys and property management in the 2 areas? When it comes to out-of-state investing I am guessing I have to register my LLC based in NJ with Columbus for the purposes of taxes etc. correct? Lastly any weird tax setups in either of the 2 cities that I should be on the lookout for? Thanks for any feedback.



    I can send you some attorneys and property management referrals in Columbus, Ohio.
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  • Robert Pritchett
    OP
    Member since 2023 · 24 posts · 12 votes
    3y

    Please do. Thanks.

    0Reply
  • Dan Cosgrove
    Member since 2023 · 11 posts · 12 votes
    3y

    You can't go wrong investing in Ohio (especially the Cincy/Columbus area) and it looks like you are making the right choice. 

    If you wanted to get some diversity and reduce your exposure while still being able to drop in on all your properties in one trip, you could make a triangle of Indy, Cincy, and Columbus as they have different employment drivers. 

    The other thing to think about is moving away from the individual property purchases to private real estate syndications that get you more passive income without the headaches. Will you get as high as an IRR when you are a passive? No. But you will have zero headaches and less risk of your investment going south as you have greater scale. EX. Vacancy on a 2 unit home means you are not covering your DSCR, while vacancy on a 100 unit property doesn't have a material impact on your return.

    1Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y
    Quote from @Robert Pritchett:

    I’m looking to invest outside of my home state, what states are best for properties in the 100k-300k range? I am looking for reasonable cash flow and appreciation.   Thanks again for any info provided.


     Secondary markets are your best bet in this economy.  Kansas City, as everyone has mentioned; Columbus, OH, Pittsburgh, lots of places that aren't Miami in Florida and other places like that.  Stay away from states that are overly tenant friendly.

    1Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    3y

    It's great that you're considering investment opportunities outside your home state! Columbus, Ohio, and its surrounding tertiary markets offer a compelling landscape for real estate investors, especially in the 100k-300k range.

    While Columbus itself is often mentioned, exploring bedroom communities like Newark, Lancaster, Marion, and Springfield can be a strategic move. These areas often present less competition and can yield favorable economics on a per-unit basis, particularly for investments in 1-4 dwelling units.

    This approach allows you to tap into the regional market dynamics while potentially benefiting from more accessible entry points and better cash flow prospects.

    Wishing you success in your out-of-state investment ventures!

    [email protected]786-494-6766
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  • Alex HilemanPro Member
    Real Estate Agent · Pittsburgh, PA · Member since 2023 · 225 posts · 147 votes
    3y
    Quote from @Stephanie P.:
    I second this. Stay away from Los Angeles, San Francisco, and San Diego. Pittsburgh and Columbus are great, affordable markets.
    [email protected]412-804-1171
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  • Gary Swank
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 822 posts · 255 votes
    3y

    Pittsburgh has proven to be a very strong market for investors, both local and remote to the area. But one must really educate themselves on the market in order to be successful. Pittsburgh neighborhoods are very diverse and certain areas are growing in the right direction. Others not so much. I've lived here my whole life and have seen a lot of changes throughout. I'm in and out of properties every single day and really have a solid understanding of the market here. Be happy to share knowkedge as I love to talk about Pittsburgh and REI.

    0Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    3y

    I've lived in Pittsburgh since 2007 and I would best characterize this city as one where out-of-state investors ride in breathing fire at high noon, but slink out of in the dead of night grimly determined never, ever, ever to discuss the shaved orangutan they woke up next to.

    0Reply
  • Kim Knaust
    Claremore, OK · Member since 2016 · 60 posts · 1 vote
    3y

    @Dan Cosgrove

    I am struggling to find many current posts about private real est syndications. Can you please help direct me in the right place?

    Thanks,

    Kim

    0Reply
  • Mike Krieg
    Investor / Syndicator · Austin, TX · Member since 2015 · 367 posts · 220 votes
    3y

    Texas has gotten more difficult but it's still growing rapidly. As you know if multifamily investing you want to target areas in the path of growth. We're looking closely at the growth corridors in the metros. Of particular interest is the new tollway I130 in Austin, or otherwise called the Tesla growth corridor. Exciting things happening in that area.

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