Where to invest in 2021 as an out of state

80 Replies

Hello there,

I am looking for area suggestions for 2021 second half.

I would be into areas where the crime is not high, population has stable and mid-class income. B class neighbors and tenant pool is what I am after.

Before you start telling me "look at your back yard" I live in San Francisco Bay area, where the back yard here costs $1M SFH for $3000/mo rental revenue, where the tenant can choose to not pay for one whole year and you still cannot evict them. Same deal with MF, where they cost $1.5M and rent is not any higher than $5k. Eventually this is pushing me towards out-of state investing.

Also I am not really looking for places that has already sky-rocketed like Austin, TX.

I don't really have any set budget, I don't have a lot of money for buying "as-is" properties that cannot get a conventional loan. I can afford up to 100-150k downpayment + rehab costs.

I would really appreciate any comment.

You'll get flooded with comments. Sunbelt has been on fire so a lot of people are going there. Along with the Midwest. All investor friendly markets will be hot and competitive. Biggest thing is building a team to cater to you. Find people for each position that understands working with OOS clients and can fill you in on where to go. Happy to answer any more questions!

Originally posted by @Caleb Brown :

You'll get flooded with comments. Sunbelt has been on fire so a lot of people are going there. Along with the Midwest. All investor friendly markets will be hot and competitive. Biggest thing is building a team to cater to you. Find people for each position that understands working with OOS clients and can fill you in on where to go. Happy to answer any more questions!

 Yeah I also would be interested in a market where it would be easy to find contacts that would likely to help out out of state investors. If I reach out to individual realtors; it's often too hard to be on the same page as they've only dealt with local people buying it.

Also where is Sunbelt? (At least the state name would be helpful here)

I agree with the commenters that the Midwest is a great place to invest right now. You said you don't want turnkey, so you'll need to supervise rehab. Find cities that you can get to easily from San Francisco (nonstop flights would be ideal) and focus on those as you will have to visit regularly. 

@Sarp Ka the Midwest (Indianapolis, IN, Columbus, OH, Kansas City, MO) are great cities to look at. Have great job markets and can't beat the cost of living in those cities. Have you ever thought about syndication at all? It's a great way to invest in a market that is not in your backyard and get into the multifamily sector of the industry without the heavy lifting and sweat equity. Good luck!

Originally posted by @Sarp Ka :

Hello there,

I am looking for area suggestions for 2021 second half.

I would be into areas where the crime is not high, population has stable and mid-class income. B class neighbors and tenant pool is what I am after.

Before you start telling me "look at your back yard" I live in San Francisco Bay area, where the back yard here costs $1M SFH for $3000/mo rental revenue, where the tenant can choose to not pay for one whole year and you still cannot evict them. Same deal with MF, where they cost $1.5M and rent is not any higher than $5k. Eventually this is pushing me towards out-of state investing.

Also I am not really looking for places that has already sky-rocketed like Austin, TX.

I don't really have any set budget, I don't have a lot of money for buying "as-is" properties that cannot get a conventional loan. I can afford up to 100-150k downpayment + rehab costs.

I would really appreciate any comment.

 Hi Sarp, I'd check out the Columbus, OH market. Prices are starting to go up but there's still plenty of deals to be made. 

Originally posted by @Benjamin Aaker :

I agree with the commenters that the Midwest is a great place to invest right now. You said you don't want turnkey, so you'll need to supervise rehab. Find cities that you can get to easily from San Francisco (nonstop flights would be ideal) and focus on those as you will have to visit regularly. 

 I was hoping not to actually fly there and find people to do the rehab/repairs and a good property manager.

Originally posted by @William Costello :

@Sarp Ka the Midwest (Indianapolis, IN, Columbus, OH, Kansas City, MO) are great cities to look at. Have great job markets and can't beat the cost of living in those cities. Have you ever thought about syndication at all? It's a great way to invest in a market that is not in your backyard and get into the multifamily sector of the industry without the heavy lifting and sweat equity. Good luck!

I've looked into that but if I am not getting 1031 tax benefit; then I don't really see the point of doing that vs just buying VTI or QYLD stock (or maybe some REIT stock)

Originally posted by @Sarp Ka :

Hello there,

I am looking for area suggestions for 2021 second half.

I would be into areas where the crime is not high, population has stable and mid-class income. B class neighbors and tenant pool is what I am after.

Before you start telling me "look at your back yard" I live in San Francisco Bay area, where the back yard here costs $1M SFH for $3000/mo rental revenue, where the tenant can choose to not pay for one whole year and you still cannot evict them. Same deal with MF, where they cost $1.5M and rent is not any higher than $5k. Eventually this is pushing me towards out-of state investing.

Also I am not really looking for places that has already sky-rocketed like Austin, TX.

I don't really have any set budget, I don't have a lot of money for buying "as-is" properties that cannot get a conventional loan. I can afford up to 100-150k downpayment + rehab costs.

I would really appreciate any comment.

Yeah - midwest is solid. My reason for Ohio (and probably true for most of midwest) is solid appreciation and cashflow. Hard to beat. Best of luck!

 

Originally posted by @Sarp Ka :

Hello there,

I am looking for area suggestions for 2021 second half.

I would be into areas where the crime is not high, population has stable and mid-class income. B class neighbors and tenant pool is what I am after.

Before you start telling me "look at your back yard" I live in San Francisco Bay area, where the back yard here costs $1M SFH for $3000/mo rental revenue, where the tenant can choose to not pay for one whole year and you still cannot evict them. Same deal with MF, where they cost $1.5M and rent is not any higher than $5k. Eventually this is pushing me towards out-of state investing.

Also I am not really looking for places that has already sky-rocketed like Austin, TX.

I don't really have any set budget, I don't have a lot of money for buying "as-is" properties that cannot get a conventional loan. I can afford up to 100-150k downpayment + rehab costs.

I would really appreciate any comment.

You should look into Columbus, Ohio 

Originally posted by @Todd Dexheimer :

I wrote an article on the best multifamily markets earlier this year:

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

Also, check out this article on what to look for: 

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

I have read that but unfortunately they don't match with my initial post. That's why I created this thread.

Just to remind you two things that I am looking for:

1.  I don't really have any set budget, I don't have a lot of money for buying "as-is" properties that cannot get a conventional loan. I can afford up to 100-150k downpayment + rehab costs.

2. I would be into areas where the crime is not high, population has stable and mid-class income. B class neighbors and tenant pool is what I am after.

Cities like Raleigh, you cannot do this with that much amount of money; so it doesn't satisfy the 1st condition. Cities like Atlanta, if 1st condition is met; 2nd condition does not satisfy (or at least I couldn't find any from my search)


I thought maybe market has completely changed in the 2nd half of the year. That's why I am revising where to look for.

I'd recommend Northwest Ohio. Our suburbs have had major growth here and they continue to expand out west. Rents are growing along with home prices and we have had several new employers come into the region. Tenants stay long term for the school districts and job opportunities. We have one of the largest hospitals in the country too.

@Sarp Ka Hello! My name is Kameron, licensed here in Kansas & Missouri with Keller Willaims Diamond Partners. Kansas City offers a great opportunity for cash flow properties! I’m actually here in San Francisco visiting! DM me!

There is definitely a flood of coastal capital gravitating inland looking for better yield and future appreciation. 
Many markets in the Midwest (e.g. Indiana & Ohio) performed phenomenally well during the past downturns. 

Indianapolis has an average rent growth of 2.9% for almost 40 yrs now, 2020 saw 4.7% YOY Rent Growth per Cushman & Wakefield.

Could spark some conversation, but I'd recommend finding a city that everybody knows/is growing (Kansas City, Cleveland, Huntsville...ect) in the midwest or the south, then looking at cities 3-5 cities away from them. Lots of times you'll find a city you've never heard of, maybe with a smaller than ideal population (<30,000) BUT the large city it's nearby has tons of jobs, tons of growth, and feeds that smaller city. Similar to how SF was the huge place to invest but even if you invested in the East Bay 15 years ago, nobody heard of Walnut Creek but now it's incredibly valuable. 

Originally posted by @Justin Moy :

Could spark some conversation, but I'd recommend finding a city that everybody knows/is growing (Kansas City, Cleveland, Huntsville...ect) in the midwest or the south, then looking at cities 3-5 cities away from them. Lots of times you'll find a city you've never heard of, maybe with a smaller than ideal population (<30,000) BUT the large city it's nearby has tons of jobs, tons of growth, and feeds that smaller city. Similar to how SF was the huge place to invest but even if you invested in the East Bay 15 years ago, nobody heard of Walnut Creek but now it's incredibly valuable. 

Have you tried this strategy? Buy and hold for 15 years seems risky if you don't know what you are getting into...

 

@Sarp Ka I am a real estate investor in the state of Kentucky. The deals here are in your price range. There is lots of development surrounding the city of Louisville. Contact me by direct message with details on the type of home you want to invest in. Thank you kindly

Originally posted by @Sarp Ka :
Originally posted by @Todd Dexheimer:

I wrote an article on the best multifamily markets earlier this year:

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

Also, check out this article on what to look for: 

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

I have read that but unfortunately they don't match with my initial post. That's why I created this thread.

Just to remind you two things that I am looking for:

1.  I don't really have any set budget, I don't have a lot of money for buying "as-is" properties that cannot get a conventional loan. I can afford up to 100-150k downpayment + rehab costs.

2. I would be into areas where the crime is not high, population has stable and mid-class income. B class neighbors and tenant pool is what I am after.

Cities like Raleigh, you cannot do this with that much amount of money; so it doesn't satisfy the 1st condition. Cities like Atlanta, if 1st condition is met; 2nd condition does not satisfy (or at least I couldn't find any from my search)


I thought maybe market has completely changed in the 2nd half of the year. That's why I am revising where to look for.

 It's time to think creatively in order to stretch your money and buy larger properties and open your horizons or go a different direction. To me, all that I am hearing are excuses to everyones suggestions. Reasons why you cannot do it vs interest in the suggestions and questions to further your understanding. 

Originally posted by @Todd Dexheimer :
Originally posted by @Sarp Ka:
Originally posted by @Todd Dexheimer:

I wrote an article on the best multifamily markets earlier this year:

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

Also, check out this article on what to look for: 

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

I have read that but unfortunately they don't match with my initial post. That's why I created this thread.

Just to remind you two things that I am looking for:

1.  I don't really have any set budget, I don't have a lot of money for buying "as-is" properties that cannot get a conventional loan. I can afford up to 100-150k downpayment + rehab costs.

2. I would be into areas where the crime is not high, population has stable and mid-class income. B class neighbors and tenant pool is what I am after.

Cities like Raleigh, you cannot do this with that much amount of money; so it doesn't satisfy the 1st condition. Cities like Atlanta, if 1st condition is met; 2nd condition does not satisfy (or at least I couldn't find any from my search)


I thought maybe market has completely changed in the 2nd half of the year. That's why I am revising where to look for.

 It's time to think creatively in order to stretch your money and buy larger properties and open your horizons or go a different direction. To me, all that I am hearing are excuses to everyones suggestions. Reasons why you cannot do it vs interest in the suggestions and questions to further your understanding. 


I was justifying why your article doesn't really answer my question here. I'm not too sure if you're suggesting me to spend more money so that I can buy in those areas?

I am also not really replying people with excuses. The ones who I am not replying I will be researching that first. In fact I found majority of answers here very useful. I'll be looking more in to mid-western markets and seeing what are the neighbors that I can invest. 

Originally posted by @Jonathan Pavkov :
Originally posted by @Justin Moy:

Could spark some conversation, but I'd recommend finding a city that everybody knows/is growing (Kansas City, Cleveland, Huntsville...ect) in the midwest or the south, then looking at cities 3-5 cities away from them. Lots of times you'll find a city you've never heard of, maybe with a smaller than ideal population (<30,000) BUT the large city it's nearby has tons of jobs, tons of growth, and feeds that smaller city. Similar to how SF was the huge place to invest but even if you invested in the East Bay 15 years ago, nobody heard of Walnut Creek but now it's incredibly valuable. 

Have you tried this strategy? Buy and hold for 15 years seems risky if you don't know what you are getting into...

 

Not 15 years, we're typically doing 5 year value-add's, just closed a 10 year but since we raise the money, lots of people are offering liquidation events in 5 years