Out of State Investing

St. Louis, Missouri
General Real Estate Investing
3yFollow

Out of State Investing

Justin Carter
Rental Property Investor · Chicago, IL · Member since 2019 · 35 posts · 23 votes

Hello, I am based in the metropolitan DC area and looking to invest out of state as this market is very expensive and it's hard to find a good deal. Does anyone have any experience investing in the Midwestern states? Was considering looking into markets such as Detroit, MI, Cleveland, Oh, St. Louis, MO, etc as from my understanding cash flow tends to be higher in those markets. I am primarily focused on cash flow vs appreciation at this point in time. Any thoughts on investing in those markets would be greatly appreciated.


Also, by chance does any have any contacts of real estate agents they can share in any of those markets?

9Reply
102 views

Most Popular Reply

Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3y

Invest locally

[email protected]301-893-4635Podcast Guest on Show #192
District Invest Group545 Reviews
WebsiteView Page
5Reply
See this reply in the discussion

46 Replies

Jump to latestLatest
  • Nathan Harden
    Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 379 votes
    3y

    You named off a couple of pretty rough cities. Yes, some of them do have good and bad parts (every city does) but just be careful and proceed with caution. Just because you find a turnkey rental in Detroit at $40k, does not mean that you should buy it. Certain properties and areas will give you more headache than you can imagine. Have a trusted team in place and talk to local investors prior to spending your hard earned money. 

    2Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    3y

    Invest locally

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    5Reply
  • Johann Villalvir
    Real Estate Consultant · San Francisco, CA · Member since 2023 · 109 posts · 71 votes
    3y

    Hello from Indianapolis, Justin. Yes, cash goes a long way here. One of our users got a deal for $43k. Of course, there are other challenges that can't be avoided such as finding a reliable contractor, etc. But you can get a deal for a lot less in the Midwest.

    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    Hey Justin, I'm in California and invest in Detroit (I have 12-doors there).

    I have a strong team on the ground and help people get started there all the time with my network/team. Happy to discuss the Detroit market, strategy, etc. Feel free to shoot me a message.

    0Reply
  • Melissa HaworthBusiness Member
    Real Estate Agent · The Panhandle | The Emerald Coast | Panama City Beach | Destin · Member since 2017 · 269 posts · 103 votes
    3y

    Hey Justin! Have you thought about investing in a vacation rental in somewhere like Destin or Panama City Beach? I have a lot of out of state investors who have seen a lot of success with this area and they love it because they can also vacation here with their friends or families so it kills two birds with one budget essentially :) 

    [email protected]469-658-2869
    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    3y

    Try @joe hammel or @David Rabior

    Logical Property Management4.9460 Reviews
    WebsiteView Page
    0Reply
  • Kerry Noble JrPro Member
    Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
    3y

    Keep Central IN in mind as well

    0Reply
  • Peter Dorinsky
    Real Estate Agent · Columbus, OH · Member since 2020 · 149 posts · 193 votes
    3y
    Quote from @Justin Carter:

    Hello, I am based in the metropolitan DC area and looking to invest out of state as this market is very expensive and it's hard to find a good deal. Does anyone have any experience investing in the Midwestern states? Was considering looking into markets such as Detroit, MI, Cleveland, Oh, St. Louis, MO, etc as from my understanding cash flow tends to be higher in those markets. I am primarily focused on cash flow vs appreciation at this point in time. Any thoughts on investing in those markets would be greatly appreciated.


    Also, by chance does any have any contacts of real estate agents they can share in any of those markets?

    Hey Justin, Cleveland is definitely a good option if you're looking for cheap homes with high cash-flow. I'd also suggest looking into the Columbus market as well. Many big-tech companies are either moving into the Columbus market or expanding their business here and as a result the market is experiencing tremendous growth. It's more of a hybrid-market compared to Cleveland so you'll get a mix of cash-flow and appreciation as well. I'm a local agent in Columbus, feel free to reach out if you have any questions or are interested in learning more.

    2Reply
  • Justin Carter
    OP
    Rental Property Investor · Chicago, IL · Member since 2019 · 35 posts · 23 votes
    3y
    Quote from @Nathan Harden:

    You named off a couple of pretty rough cities. Yes, some of them do have good and bad parts (every city does) but just be careful and proceed with caution. Just because you find a turnkey rental in Detroit at $40k, does not mean that you should buy it. Certain properties and areas will give you more headache than you can imagine. Have a trusted team in place and talk to local investors prior to spending your hard earned money. 

    You raise a very good point. I have noticed a ton of opportunities that are priced anywhere between $50-75K which I thought couple potentially be a good fit for section 8 vs finding a traditional market rate tenant. Not too familiar with Detroit, but I figured going the section 8 rate may be a safer play. 
    0Reply
  • Justin Carter
    OP
    Rental Property Investor · Chicago, IL · Member since 2019 · 35 posts · 23 votes
    3y
    Quote from @Russell Brazil:

    Invest locally


     DC is way too expensive - almost nothing pencils with these rates. I’ve been taking a good look at Baltimore. Are you familiar with the DC area at all? Any submarkets or suburbs you think are worth taking a look at? Again, I’m prioritizing cash flow over appreciation here. 

    0Reply
  • Justin Carter
    OP
    Rental Property Investor · Chicago, IL · Member since 2019 · 35 posts · 23 votes
    3y
    Quote from @Johann Villalvir:

    Hello from Indianapolis, Justin. Yes, cash goes a long way here. One of our users got a deal for $43k. Of course, there are other challenges that can't be avoided such as finding a reliable contractor, etc. But you can get a deal for a lot less in the Midwest.


     Hello, sir! Pleasure meeting you. Yes, I heard Indiana has great investment opportunities. Besides Indianapolis, are there any other cities in Indiana you think I should take a look at? Will send you a note offline. 

    0Reply
  • Justin Carter
    OP
    Rental Property Investor · Chicago, IL · Member since 2019 · 35 posts · 23 votes
    3y
    Quote from @Travis Biziorek:

    Hey Justin, I'm in California and invest in Detroit (I have 12-doors there).

    I have a strong team on the ground and help people get started there all the time with my network/team. Happy to discuss the Detroit market, strategy, etc. Feel free to shoot me a message.

    Thank you, Travis! Sending you a note shortly. 
    0Reply
  • Justin Carter
    OP
    Rental Property Investor · Chicago, IL · Member since 2019 · 35 posts · 23 votes
    3y
    Quote from @Melissa Haworth:

    Hey Justin! Have you thought about investing in a vacation rental in somewhere like Destin or Panama City Beach? I have a lot of out of state investors who have seen a lot of success with this area and they love it because they can also vacation here with their friends or families so it kills two birds with one budget essentially :) 

    Had not put much thought into this. Will send you a note offline!
    1Reply
  • Justin Carter
    OP
    Rental Property Investor · Chicago, IL · Member since 2019 · 35 posts · 23 votes
    3y
    Quote from @Peter Dorinsky:
    Quote from @Justin Carter:

    Hello, I am based in the metropolitan DC area and looking to invest out of state as this market is very expensive and it's hard to find a good deal. Does anyone have any experience investing in the Midwestern states? Was considering looking into markets such as Detroit, MI, Cleveland, Oh, St. Louis, MO, etc as from my understanding cash flow tends to be higher in those markets. I am primarily focused on cash flow vs appreciation at this point in time. Any thoughts on investing in those markets would be greatly appreciated.


    Also, by chance does any have any contacts of real estate agents they can share in any of those markets?

    Hey Justin, Cleveland is definitely a good option if you're looking for cheap homes with high cash-flow. I'd also suggest looking into the Columbus market as well. Many big-tech companies are either moving into the Columbus market or expanding their business here and as a result the market is experiencing tremendous growth. It's more of a hybrid-market compared to Cleveland so you'll get a mix of cash-flow and appreciation as well. I'm a local agent in Columbus, feel free to reach out if you have any questions or are interested in learning more.

    Thank you! Good to know. Will send you a note offline. 
    0Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    3y
    Quote from @Justin Carter:

    Hello, I am based in the metropolitan DC area and looking to invest out of state as this market is very expensive and it's hard to find a good deal. Does anyone have any experience investing in the Midwestern states? Was considering looking into markets such as Detroit, MI, Cleveland, Oh, St. Louis, MO, etc as from my understanding cash flow tends to be higher in those markets. I am primarily focused on cash flow vs appreciation at this point in time. Any thoughts on investing in those markets would be greatly appreciated.


    Also, by chance does any have any contacts of real estate agents they can share in any of those markets?

     I’d consider taking a 2nd look at dc proper, you can basically break even on cash flow with as little as 10% in certain area, if you owner occupy right now, one area in particular I really like and I’m intimately familiar with having done two flips there recently is the Brentwood neighborhood of dc, at its peak (I’m pretty sure I have highest neighborhood comp) it was selling for 735k you could probably pick something up there for around 500k right now, that’s nearly 33% off, mortgage is around 3200-3500, with 10% down, rents are about $3300. I was showing some condos in admo last week not quite break even but once you factor in principle pay down, basically break even and selling at 2016 prices.

    4Reply
  • Melissa HaworthBusiness Member
    Real Estate Agent · The Panhandle | The Emerald Coast | Panama City Beach | Destin · Member since 2017 · 269 posts · 103 votes
    3y
    Quote from @Justin Carter:
    Quote from @Melissa Haworth:

    Hey Justin! Have you thought about investing in a vacation rental in somewhere like Destin or Panama City Beach? I have a lot of out of state investors who have seen a lot of success with this area and they love it because they can also vacation here with their friends or families so it kills two birds with one budget essentially :) 

    Had not put much thought into this. Will send you a note offline!

     Awesome!

    [email protected]469-658-2869
    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Justin Carter

    if DC proper is too expensive pick a suburb or exurb - Manassas, Fredericksburg, Frederick, Winchester, Charles Town, etc.

    there is just no substitute for being hands-on when you're starting out.

    cash flow has gotten much tougher in the midwest markets being mentioned.

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

    Hello, I am based in the metropolitan DC area and looking to invest out of state as this market is very expensive and it's hard to find a good deal. Does anyone have any experience investing in the Midwestern states? Was considering looking into markets such as Detroit, MI, Cleveland, Oh, St. Louis, MO, etc as from my understanding cash flow tends to be higher in those markets. I am primarily focused on cash flow vs appreciation at this point in time. Any thoughts on investing in those markets would be greatly appreciated.


    Also, by chance does any have any contacts of real estate agents they can share in any of those markets?


    Hey Justin, I would strongly look into the Columbus market for both of its cashflow and appreciation. Although it is a more appreciating market, you can do fix & flips and BRRRR's to achieve a high ROI and cashflow.

    [email protected]614-802-5698
    ReafCo | Ahmed Group 533 Reviews
    WebsiteView Page
    3Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Alfath Ahmed

    i have to ask - you would recommend, in today's market environment, that a brand new, out of state investor start with a flip or BRRRR?

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

    @Alfath Ahmed

    i have to ask - you would recommend, in today's market environment, that a brand new, out of state investor start with a flip or BRRRR?


    I have been able to setup my investor to successfully BRRRR out of state because they have their core 4. Your team should be able to set you up to filter the right deals and have good contractors that will get the job done.

    [email protected]614-802-5698
    ReafCo | Ahmed Group 533 Reviews
    WebsiteView Page
    0Reply
  • Gloria N GearBusiness Member
    Realtor · Indianapolis IN · Member since 2018 · 464 posts · 339 votes
    3y

    If you are in Chicago, why are you looking so far away?  I used to live in Illinois - taxes are high, but I know plenty of investors in Champaign, Peoria, and Rockford.  You can go right across the border for Wisconsin or Indiana.  The Northwest corner of Indiana is very popular with Chicago investors. I now live in Indianapolis, investor here and have built a business around helping OOS investors.  I have a substantial network of contractors, property managers, lenders, etc.  Indianapolis has a stable but growing economy with plenty of transitional areas and low price points which make it attractive.  You asked about other cities in Indiana, I would recommend Ft Wayne, Lafayette (Purdue), Bloomington (IU), Terre Haute.  Contact me for more info.

    2Reply
  • Joe HammelBusiness Member
    Real Estate Agent · Metro Detroit, MI · Member since 2018 · 614 posts · 666 votes
    3y

    Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.

    Anyone who disagrees, is simply missing out. I cash flow $100k a year off 20 doors and have built a ton of equity in a short amount of time. Happy to send a screen shot of the portfolio to anyone who wants to see, it just won’t allow me to attach pics to a reply.

    Purchase: $80k-$130k

    Rent: $1100-$1500 (no rent control in MI)

    1% rule: 1%-1.4% rule deals

    ROI: 10-14%

    Cash flow: $250-$350/door (after all expenses and budgeting for maint, capex, vacancy)

    Appreciation: 3-10%+ (has been double digit for a decade)

    Location: C+, B-

    These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

    We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

    The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties. We don’t buy those. We have found what works and repeat it as much as funds allow. Detroit is known as the highest rent to price ratio in the country…and we’ve found the perfect balance of price/location within the area.

    [email protected]248-422-1685
    FIRE Realty Team - Keller Williams5380 Reviews
    WebsiteView Page
    2Reply
  • Anthony L Amos Jr
    Real Estate Agent · Columbus | Toledo · Member since 2019 · 608 posts · 768 votes
    3y
    Quote from @Justin Carter:

    Hello, I am based in the metropolitan DC area and looking to invest out of state as this market is very expensive and it's hard to find a good deal. Does anyone have any experience investing in the Midwestern states? Was considering looking into markets such as Detroit, MI, Cleveland, Oh, St. Louis, MO, etc as from my understanding cash flow tends to be higher in those markets. I am primarily focused on cash flow vs appreciation at this point in time. Any thoughts on investing in those markets would be greatly appreciated.


    Also, by chance does any have any contacts of real estate agents they can share in any of those markets?


     Cleveland is a good cash flow market! 

    4Reply
  • Devin Dougherty
    Real Estate Agent · Omaha, NE · Member since 2023 · 47 posts · 23 votes
    3y

    There is going to be good and bad deals in any given market, some buy ins might just be a little higher than others. If you are investing out of state, make sure you have a good team in that area that can guide you through the process and make sure everything happens smoothly, and in your favor. If you have that trusted team, including agents, lenders, property management, etc, they should be able to get you towards what you're wanting to do. 

    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    got it.  someone call these folks and give them the easy button.

    https://www.biggerpockets.com/forums/12/topics/1111808-strug...

    https://www.biggerpockets.com/forums/311/topics/1137430-insp...

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free