New Yorker looking to invest OUT-OF-STATE!

36 Replies

Hello all! I reside in Staten island, NY. I am priced out in NYC. Just bought a SFH in Staten Island last year via VA Loan. I currently reside in this home. I was wondering which of these locations would be best to invest in. I am looking to purchase a buy&hold under 100k for now.

1) Philly, PA

2) Cleveland, Ohio

3) Indianapolis, Indiana

4) Kansas City, MO

I'm preferential to Cleveland for obvious reasons.

What sort of minimum CoC do you wanna see on your SFR?

I would say $150-$200 a month CoC return. I am a newbie but I believe this is a reasonable amount? Correct me if I am wrong.

@Eric DeVito Philly's a lot closer - you can pop down there any day for only a $30 bus ride to meet w people and/or check out properties. A wknd trip to any other markets will cost you $1,000 and be a huge pain (possible flight delays, etc). You should scour the Philly local forum here on BP & start making contacts

Originally posted by @Eric P. :

@Eric DeVito Philly's a lot closer - you can pop down there any day for only a $30 bus ride to meet w people and/or check out properties. A wknd trip to any other markets will cost you $1,000 and be a huge pain (possible flight delays, etc). You should scour the Philly local forum here on BP & start making contacts

 What areas in Philly do you recommend? 

Originally posted by @Eric DeVito :

I would say $150-$200 a month CoC return. I am a newbie but I believe this is a reasonable amount? Correct me if I am wrong.

 You didn't answer the question.  I'm assuming you mean you want $150-200 a month in cash flow, but what is that based on?

Is that per property, total per month, and if it is per property, what is the investment in cash (your cost) per property? Are you investing $100k in cash and getting back 200/month (2400/year)? That's a 2.4% CoC return...and if that's what I got, I would quit REI. Even if you only invested $50k and got back $2400/year, that's only a 4.8% CoC Return...and I would still have to quit...just not as fast. Look at it this way, You are spending $50k, and getting only $2400/year back. That means it will take you almost 21 years to break even. That assumes no vacancies, no CAPEX, no other expenses, etc...

For me, I'm looking to invest no more than $60k of someone else's cash (partner), or free money (no cost for its use), and get a minimum of $500/month ($6k/year) back in cash flow...and the original $60k back by the end of the year too.

Originally posted by @Joe Villeneuve :
Originally posted by @Eric DeVito:

I would say $150-$200 a month CoC return. I am a newbie but I believe this is a reasonable amount? Correct me if I am wrong.

 You didn't answer the question.  I'm assuming you mean you want $150-200 a month in cash flow, but what is that based on?

Is that per property, total per month, and if it is per property, what is the investment in cash (your cost) per property? Are you investing $100k in cash and getting back 200/month (2400/year)? That's a 2.4% CoC return...and if that's what I got, I would quit REI. Even if you only invested $50k and got back $2400/year, that's only a 4.8% CoC Return...and I would still have to quit...just not as fast. Look at it this way, You are spending $50k, and getting only $2400/year back. That means it will take you almost 21 years to break even. That assumes no vacancies, no CAPEX, no other expenses, etc...

For me, I'm looking to invest no more than $60k of someone else's cash (partner), or free money (no cost for its use), and get a minimum of $500/month ($6k/year) back in cash flow...and the original $60k back by the end of the year too.

Hello Joe, I am quite new to all of this. I did mean $150-$200 per home. I would like to look for a SFH under $100k and put 20% down. I am leaning towards the turn-key route. I only have about $5,000-$10,000 in savings, but I was thinking of taking out a home equity line of credit out to fund my next investment property. I purchased my primary residence last year for $255,000 and have about $60,000 in equity.

@Eric DeVito note: CoC refers to return on investment based on your invested amount. If you put 20k into a 100k home, and you get cash flow of $200 per month, then 200x12 months = $2400 return per year, which is a CoC return of 12% per year.

If I were you, given limited opportunities in the NY metro area, i would go for turnkeys. Living in NYC myself, I have purchased turnkeys in Indianapolis and KC and am happy with their performance so far. With a 60K HELOC + 10k savings you should be able to buy about 3 solid rentals with a 20% down payment on each

Originally posted by @Ishviyan D. :

Eric DeVito note: CoC refers to return on investment based on your invested amount. If you put 20k into a 100k home, and you get cash flow of $200 per month, then 200x12 months = $2400 return per year, which is a CoC return of 12% per year.

If I were you, given limited opportunities in the NY metro area, i would go for turnkeys. Living in NYC myself, I have purchased turnkeys in Indianapolis and KC and am happy with their performance so far. With a 60K HELOC + 10k savings you should be able to buy about 3 solid rentals with a 20% down payment on each

 Thank you for clarifying that. I would like to PM you in regards to your experience.

Originally posted by @Eric DeVito :
Originally posted by @Joe Villeneuve:
Originally posted by @Eric DeVito:

I would say $150-$200 a month CoC return. I am a newbie but I believe this is a reasonable amount? Correct me if I am wrong.

 You didn't answer the question.  I'm assuming you mean you want $150-200 a month in cash flow, but what is that based on?

Is that per property, total per month, and if it is per property, what is the investment in cash (your cost) per property? Are you investing $100k in cash and getting back 200/month (2400/year)? That's a 2.4% CoC return...and if that's what I got, I would quit REI. Even if you only invested $50k and got back $2400/year, that's only a 4.8% CoC Return...and I would still have to quit...just not as fast. Look at it this way, You are spending $50k, and getting only $2400/year back. That means it will take you almost 21 years to break even. That assumes no vacancies, no CAPEX, no other expenses, etc...

For me, I'm looking to invest no more than $60k of someone else's cash (partner), or free money (no cost for its use), and get a minimum of $500/month ($6k/year) back in cash flow...and the original $60k back by the end of the year too.

Hello Joe, I am quite new to all of this. I did mean $150-$200 per home. I would like to look for a SFH under $100k and put 20% down. I am leaning towards the turn-key route. I only have about $5,000-$10,000 in savings, but I was thinking of taking out a home equity line of credit out to fund my next investment property. I purchased my primary residence last year for $255,000 and have about $60,000 in equity.

OK, now you need to subtract the cost per month of your HELOC on your house that is being used to fund the purchase. You will also need to subtract the cost of the 80% mortgage from your cash flow.

You can't simply say I want to spend $20k max on a DP for a $100k property and get $200k/month back, without knowing where those properties are.  The market will dictate what you get, and what it will cost.  You dictate what you need to get and what your budget is.  The secret, is the find a market where what the market dictates, and what you need, will "play nice with eachother". 

Yes of course. I'm looking into Indy or KC, MO. A lot more affordable for me then NYC. I do have to work on numbers. Is their a fee for using a Helco?

@Eric DeVito I didnt see you mention Tampa, FL and it's one of the Top10 Markets in the USA. Let me know if you want a piece of this sunshine real estate

Hi @Eric DeVito ,

Indianapolis and Kansas City are great markets. Not that familiar with Cleveland or Philly. We work with several out of state investors in the Indianapolis market. If you are in need of contacts for wholesalers, realtors and contractors, feel free to contact me.

I figured I would continue the trend and support the market on your list that I am in. I have read a lot about those other markets and they seem to have a lot of appeal, however, to back @Eric P. the ability to come see your rental in Philly is a huge advantage. That being said I noticed you were interested in what areas are good to look in. I currently have properties in Pennsport, Point Breeze, and Olde Kensington. The latter two are experiencing a lot of building and gentrification. Other areas that are worth considering are Brewerytown and Germantown. I do not personally hold any properties there, however I know @Troy S. is familiar with Brewerytown.

Good luck!

-James

@Eric DeVito you can find homes in Kansas City in the 60k to 70k range that rent from 800 to 900 per month . Check with your current first mortgage lender and local credit unions to find out how much the equity line will cost and the Max ltv that they will lend up to for their equity lines. 

Gordon Cuffe, Lender in CA (#1037464)
916-261-2381

@Eric DeVito You can do well in any of those cities. However, I am with Eric P. on this, Philly should be your first choice on this. It is so much better if you are can have a quick trip over by car or transit to maintain an overview of your properties. Philly is very different than the midwest markets you mentioned - more attached row houses on small lots for SFR. All best in your REI.

Larry Fried, Real Estate Agent in OR (#201211636)

thanks for replies. It seems like the areas you have mentioned in Philly have already been "modernized" so to speak. Went on realtor and many of the homes have been renovated. Many of these homes are listed for $200,000 and up.

I feel like KC or Indy would be best for me because I can obtain a good property with good CoC between $60,000-$80,000 SFH.

Kansas City is a great market to get started in. We work with several happy out of state investors. It's hard to find the same numbers and houses for the price outside of our market. I would check with several different lender here in the area for LTV.

Originally posted by @Eric DeVito :

Hello all! I reside in Staten island, NY. I am priced out in NYC. Just bought a SFH in Staten Island last year via VA Loan. I currently reside in this home. I was wondering which of these locations would be best to invest in. I am looking to purchase a buy&hold under 100k for now.

1) Philly, PA

2) Cleveland, Ohio

3) Indianapolis, Indiana

4) Kansas City, MO

Hey Eric!

I ran the Staten Island Half Marathon last year.  What specifically is your investment goal?

For various reasons, Personally i would not acquire anything for less than $100k and not in any markets you've mentioned.  None of these cities rank high in terms of population or job growth forecasts.  

Do you want SF or MF deals only? Are you interested in Commercial Deals, such Warehouses, Strip Centers and Income Producing Businesses?

I want to have buy & hold rental property for long term income. 

Hey Eric, I think you should consider the Philadelphia Suburbs. I grew up 5 minutes outside of Philadelphia although I live in Santa Barbara now. I am diving into the RE game full force as I am mastering the art of acquiring homes at steep discounts and dishing them out to cash investors. I am still quite new, however I have learned so much in so little time just because of BP... Amazing. Anyways, I can give you some inside information as I know that there are plenty of properties waiting to be snatched up in the Philly burbs. Specifically the Main Line area, along with the Delco area. If you have any questions about feel free to send me a colleague request I would be glad to help. 

Best, 

Blake Dalessio 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.