Advice on first rental property out of state

Advice on first rental property out of state

Member since 2023 · 39 posts · 31 votes

Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

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Real Estate Agent · Columbus | Toledo · Member since 2019 · 608 posts · 768 votes
3y
Quote from @Grant T.:

Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

Invest in the wonderful town of Columbus, OH. Home to The Ohio State University with nearly 60,000 students, 5 Fortune 500 companies, over +25% population change since 2000, and the 2016 smart city challenge award winner (https://www.columbus.gov/smartcity/). Furthermore, Intel is spending 20 Billion dollars to build two semiconductor plants, and many more great things presently and coming in the future. Needless to say, Columbus will remain a strong real estate market for the foreseeable future.
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  • Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes
    3y

    Hi Grant!

    Picking a great market is the first mission-critical step.

    Tennessee and Texas are not markets; they're states.

    Columbus is definitely a lot stronger than Cleveland. My vote's for Columbus.

    Best,

    Jon

  • Dillon, MT · Member since 2017 · 4 posts · 4 votes
    3y

    Hi Grant, What part of Montana did you build your house? I live in Montana and am also looking to invest in Cleveland.  I would certainly like to know you progress. Thanks.

  • Real Estate Broker · Cleveland, OH · Member since 2015 · 255 posts · 248 votes
    3y
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.


     Go with Columbus if you favor appreciation, Cleveland if you favor cash flow, your own backyard if you favor control and more hands-on experience.

  • Rental Property Investor · Clarksville, TN · Member since 2016 · 1k+ posts · 1k+ votes
    3y

    @Grant T.

    Once you pick a market area, start working lenders to figure out what your deal has to look like to get funded. You are about two years away from MF hitting the market that can't get refi'd so make sure you are on the right side of that situation. Middle TN has been good to us. TX lures a lot of new investors in before they realize about TX's property taxes. There are people making money in every market, just be adaptable.

  • Real Estate Agent · Columbus | Toledo · Member since 2019 · 608 posts · 768 votes
    3y
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

    Invest in the wonderful town of Columbus, OH. Home to The Ohio State University with nearly 60,000 students, 5 Fortune 500 companies, over +25% population change since 2000, and the 2016 smart city challenge award winner (https://www.columbus.gov/smartcity/). Furthermore, Intel is spending 20 Billion dollars to build two semiconductor plants, and many more great things presently and coming in the future. Needless to say, Columbus will remain a strong real estate market for the foreseeable future.
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    3y
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.


     Sounds like you have a lot of experience already. I recommend Ohio

  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Travis Wiggins:

    Hi Grant, What part of Montana did you build your house? I live in Montana and am also looking to invest in Cleveland.  I would certainly like to know you progress. Thanks.

    Hey Travis, I built in Black bull golf course in Bozeman. 
  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Jad Boudiab:
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.


     Go with Columbus if you favor appreciation, Cleveland if you favor cash flow, your own backyard if you favor control and more hands-on experience.

    Thank you for the advice! I was leaning hard towards Cleveland but after more research I’m not favoring Columbus. 
  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Todd Rasmussen:

    @Grant T.

    Once you pick a market area, start working lenders to figure out what your deal has to look like to get funded. You are about two years away from MF hitting the market that can't get refi'd so make sure you are on the right side of that situation. Middle TN has been good to us. TX lures a lot of new investors in before they realize about TX's property taxes. There are people making money in every market, just be adaptable.

    Awesome, thanks for the lending advice. And exactly why I don’t want to do Texas unless I come across a gold mine, which isn’t going to happen in my case. 
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    3y
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

    This is awesome man! You have learned a great deal at a young age. Take a look into the Columbus market. I personally buy all of my investment properties there and have been able to successfully BRRRR and do fix & flips.

     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.

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

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

    Hi Grant, 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!

  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    @Grant T.

    I would 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. If you don't care about appreciation at all you should look at Cleveland, OH. Cleveland has a bit higher cash flow than Columbus in exchange for the appreciation.

  • Omaha, NE · Member since 2023 · 7 posts · 4 votes
    3y

    Hello! First off, congratulations on your first investment property! In my opinion I think the two most important things in real estate investing are

    1) Research many markets and find one that works for you (affordability and stability)

    2) Build a good team (An investment Real Estate Agent who wants to help you build a portfolio, a trust worthy contractor, a knowledgeable insurance broker, etc.)

  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Patrick Drury:

    @Grant T.

    I would 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. If you don't care about appreciation at all you should look at Cleveland, OH. Cleveland has a bit higher cash flow than Columbus in exchange for the appreciation.

    Thanks for the input Patrick, I agree with you. Given the pros and cons of each, Columbus seems like the better option given my current position. 
  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Kalyn Catlin:

    Hello! First off, congratulations on your first investment property! In my opinion I think the two most important things in real estate investing are

    1) Research many markets and find one that works for you (affordability and stability)

    2) Build a good team (An investment Real Estate Agent who wants to help you build a portfolio, a trust worthy contractor, a knowledgeable insurance broker, etc.)


     Are there any other markets or even states you recommend I consider aside from the ones I listed? thank you for the reply!

  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Jimmy Lieu:
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

    Hi Grant, 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!


     Thanks a lot, Jimmy! I will be reaching out soon for sure! I definitely want to be on the less aggressive side right now with all the uncertainties. 

  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Alfath Ahmed:
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

    This is awesome man! You have learned a great deal at a young age. Take a look into the Columbus market. I personally buy all of my investment properties there and have been able to successfully BRRRR and do fix & flips.

     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.


     That's awesome, congrats! I will read it for sure. For your flips do you usually do single or multi-family?

  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Anthony L Amos Jr:
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

    Invest in the wonderful town of Columbus, OH. Home to The Ohio State University with nearly 60,000 students, 5 Fortune 500 companies, over +25% population change since 2000, and the 2016 smart city challenge award winner (https://www.columbus.gov/smartcity/). Furthermore, Intel is spending 20 Billion dollars to build two semiconductor plants, and many more great things presently and coming in the future. Needless to say, Columbus will remain a strong real estate market for the foreseeable future.
    Thank you for the input Anthony, I wasn't aware of Intel building there! I appreciate the reply. 
  • Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @Grant T.- thanks - congrats on your first deal ....regarding your next steps - I would advise that you get formally  pre approved for whatever  hypthetical  sceanrio you want to  use ...this will get you educated on present  numbers and  organized  and prepared - good luck

  • Member since 2023 · 39 posts · 31 votes
    3y
    Quote from @Dave Skow:

    @Grant T.- thanks - congrats on your first deal ....regarding your next steps - I would advise that you get formally  pre approved for whatever  hypthetical  sceanrio you want to  use ...this will get you educated on present  numbers and  organized  and prepared - good luck

    Thank you, Dave. I appreciate the advice! Now that the date is coming up, I am learning much more about the pre-approval process and things to look out for. 
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    3y
    Quote from @Grant T.:
    Quote from @Alfath Ahmed:
    Quote from @Grant T.:

    Hey everyone, I am new to Bigger Pockets so forgive me if I am posting this in the wrong area. I am 23 years old, own an LLC with my father and brother, and live in California. We are about to close on our first investment project. We bought land on a golf course in Montana, built a house, and am in the process of selling it. The closing date is scheduled for 9/8. Don't get me wrong, it was awesome completing our first real project and we learned a lot. We are making a decent profit but we do not want to do this again. Over the time this was built, I fell in love with studying rental properties and learning all about them, it's honestly an addiction now. We have all agreed that we are going to roll all of our cash and profits into multifamily rentals, and I basically have the most influence and decision power in terms of what we buy and where. My top locations right now are Columbus, Cleveland, Tennessee (still need to do more research on Tennessee but I like it a lot so far) , and possibly Texas if I can find a deal. Lastly, assuming closing happens, which it most likely will, I will have roughly $250k for a down payment, closing, and rehab if needed. I am still very aggressively looking, studying, and learning about other markets across the country. Any advice would be greatly appreciated from those who have done this before. Thanks.

    This is awesome man! You have learned a great deal at a young age. Take a look into the Columbus market. I personally buy all of my investment properties there and have been able to successfully BRRRR and do fix & flips.

     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.


     That's awesome, congrats! I will read it for sure. For your flips do you usually do single or multi-family?


     I do both! At the moment, my partner and I are looking into buying an 6-unit to turnaround and fix operational inefficiencies and increase rent prices then re-appraise based on the new Cap Rate. 


    There is a ton of good deals out there for SFH as well. I am currently helping a client close a deal at 70 % ARV. We are expecting a huge CoC return.

  • Omaha, NE · Member since 2023 · 7 posts · 4 votes
    3y
    Quote from @Grant T.:
    Quote from @Kalyn Catlin:

    Hello! First off, congratulations on your first investment property! In my opinion I think the two most important things in real estate investing are

    1) Research many markets and find one that works for you (affordability and stability)

    2) Build a good team (An investment Real Estate Agent who wants to help you build a portfolio, a trust worthy contractor, a knowledgeable insurance broker, etc.)


     Are there any other markets or even states you recommend I consider aside from the ones I listed? thank you for the reply!


     Hello again! I do apologize for my delayed response. I am a SoCal native who migrated to Omaha, NE, and stayed due to the real estate market! Omaha is central to many businesses/ industries within the US and is currently a fast-growing city. There are so many opportunities not just within real estate but many industries as a whole and it is, in my opinion, a perfect city for a newbie, like myself, to not only get my foot in that door but to successfully get into the room and sit at the table. 

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