Living in CA, where do I invest???

20 Replies

Hey all! I'm currently living in Redding, CA. I'm looking to invest, as you could imagine the 1% rule is hard to find here. I'm looking to try my hand in out of state investing, but I'm not sure where. I'm looking for a property about $350,000. As many units as I can get, without sacrificing quality. It will be out of state so I don't want a C, D, or F property giving me headaches. Let me know if you have any suggestions for good cities to start investing, that are safe, clean and have reasonable property prices! Thank you 

@Jake Mires Hi Jake. Im also a licensed real estate agent in CA. But recently have relocated to East TN. Message me for info on investing in the Smokies. I own 4 vacation rentals soon to be 6 and 4 LTR in AL. Out of state investor since the beginning. Its all about your connections.
@Jake Mires you need to learn the areas before investing. Get to know your market, then you will know what’s a good deal. If you pay 350k for 4 plex in Little Rock OR Memphis you paying to much!

Area is important, however if your buying out of state the most important component is your team! A plane ticket and cost of a hotel is a solid investment into your education. Plenty of hurdles to be aware of. Happy to share my experience if you like.

@Jake Mires You're in an area right now that has the strongest demand for rental property of probably anywhere in the U.S. Even before the Carr Fire, demand was high. It's almost impossible to find rentals for the displaced, I know, my firefighter grandson had his house burn, and is looking for a place to rent for his wife and two kids, so he can get back to work. For the next year, insurance is paying top dollar for rentals, and after that, there's still going to probably be strong demand like before the fire. 

When investing out of the area, it's a crap shoot. Plenty of people have lost all their investment trusting someone elses opinions, buying properties rented to fake tenants with no record. My personal opinion is unless you can afford to lose your money, you're better off investing where you KNOW the local markets, neighborhood, where schools are, what areas to avoid, etc. 

@Jake Mires I completely agree with @Karen Margrave here. I live in Redding with two properties that are about to be rented out by people that lost homes from the fire. It’s a win-win. The renter gets a furnished home and we get high rental rate paid by their insurance company. I’m trying to buy more properties in Redding right now. I’m also putting some deals together in KC. 

@Benjamin Goodpasture What are you getting in rents, and in what areas? 

I did a post the other day looking for investors wanting to buy homes to be rented to those with burned out homes. The demand is incredible. It was such a tight market before the fire. Most homes will probably be off market deals, etc.  I'm a licensed agent, and my daughter is a broker. My daughter was evacuated for days, and set her real estate office up to receive donations and distribute to those that lost homes, only to have her son end up losing his. She has so many people contacting her looking for rental housing, etc. School starts this week, and it's going to be a mess. I've done a lot of development and real estate in Redding, and surrounding areas over the years, and I KNOW that area in and out, and see some great opportunities for buy/hold. 

My grandson and his family are looking for a home, but having a difficult time because they have 2 labs. They have a good insurance package, but finding a home is tough. 

@Jake Mires You're not going to find anything for a dollar a foot now. There's only a few rentals available. Granted, it won't sustain those high rents, but for several months insurance companies are paying premiums in rents for homeowners that have lost housing. 

Hi @Jake Mires !

I live in California but invest out of state. There's a lot of great advice here on this thread.

My partner and I made a list of many cities in the US and made an excel sheet to track metrics like population growth, job growth, affordability, Fortune 500 companies in the city, demographics, and other factors. After you narrow down on 2-3 markets, connect with people in those markets and fly out there to immerse yourself in the area.

I highly recommend reading David Lindahl's book called Emerging Real Estate Markets. 

Originally posted by @Jeffrey Almonte :

Hi @Jake Mires !

I live in California but invest out of state. There's a lot of great advice here on this thread.

My partner and I made a list of many cities in the US and made an excel sheet to track metrics like population growth, job growth, affordability, Fortune 500 companies in the city, demographics, and other factors. After you narrow down on 2-3 markets, connect with people in those markets and fly out there to immerse yourself in the area.

I highly recommend reading David Lindahl's book called Emerging Real Estate Markets. 

 Thanks man! Just curious, 50% of investors say don't ever ever ever invest out of state. The other 50% say that it's great! What's the deal? It's only bad if you don't know what you're doing I'm assuming? Just lack of knowledge? The opposing views are crazy, do you think it's generally a good idea if you do your research?

Hi @Karen Margrave one of our properties is Airbnb and the other is our primary home that we are turning into a rental. Both are fully furnished. One is off Almond across from Shasta High and other is off Lake. Email our property manager today. We are ok with two labs. We have a couple other interested families too but no commitments. We should connect about finding some off market deals! I’m trying to make some creative offers. I’ll have more capital to invest soon too.

Fresno could be  good option for a bit higher cap rates, possibly some of the areas deeper in San Bernardino County (Victorville, Hesperia etc), or the Riverside area (one you get an hour or so out of LA county, going towards Coachella area.

However, if what you want is cash flow, as opposed to appreciation, CA is not the place to look, as compared to out of state. I'm looking seriously into Cleveland right now, like what I see. You can get good caps in B- / C+ areas, honestly even in slightly better areas. Connected with some folks on BP who invest in the market and have been happy. If you ask me, San Antonio is a market that will grow a lot in the future, arguably Dallas, Atlanta as well. All are becoming pricier, but good places to invest for sure. 

@Benjamin Goodpasture I sent you a private message, don't want to get myself into trouble "deal making the forums" isn't allowed, and being a moderator I need to adhere to rules. 

@Karen Margrave @Benjamin Goodpasture - glad that you are safe in Redding. I own a vacation rental in Napa, and last fall's fires missed by 1 mile. It was scary times, as I'm sure is the case in Redding right now. While our VR functions as a nightly rental, we wanted to "do the right thing" after the fires and offer the home to fire evacuees. The problem that we found was that the insurance companies were paying paltry rates. I certainly didn't expect the revenue that I was making on our VR, but some of these highly reputable insurance companies ("like a good neighbor...") were offering fire victims $2K-$3k/month for their burned $2 million properties. Also, the Attorney General in CA also prosecuted a lot of people under the Anti-Price Gouging laws for "price gouging" on rents. That is, rents >10% higher post-fire than pre-fire are illegal, so please do your math carefully.

@Carla Carvalho Thanks for the information. The problem with Redding is that there are no rentals to speak of, as it was already an extremely tight market, and many of those that may come on the market will be taken from inventory for sale, and will be newly added to the rent rolls, with no rental history. Redding has much more reasonable rents, therefore; the allowance offered by insurance companies seem to be sufficient for the market, so far anyway. 

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