Out of state investing: Where to invest?

10 Replies

I have decided to invest in out of state properties but not sure where to invest. I am thinking about Cleveland, OH and Dearborn, MI since the real estate there are quite affordable and good cashflow for a turn key properties (according to the listing). I don't know if I am missing any detail but the cashflow sounds almost too good to be true (ex 8 beds 4 baths fully occupied $1500/month for a price of $70k). I would like to hear from a local or someone who has properties there if this is true or am I missing something? I am also open to invest in other states please let me know if you have any detail. Feel free to connect with me if you think we can work together. I am looking to purchase a turn key property for less than 200k that also meet the 1% rule criteria for my first property. Thank you for taking your time to answer my question.

@Napatarong Wannaphaschaiyong Why are you investing in real estate?  What goals do you need to make in order to accomplish your why?  Are you investing for cash flow or appreciation? How much do you plan to invest?

Before deciding where to invest, you should answer the questions above. Depending on how you answer them, this will guide you to certain markets. One market that is good for one investor may not be good for another one. It all depends on your goals in investing and your criteria.

Best of luck!

Cleveland is a great market to get cashflow (not as familiar with Dearborn).  I am assuming with 8 bed and 4 bath this is a 4 unit property?  That means the rent per unit is under $400.  It is likely that the financials look good on paper but the actual returns may be much smaller once you consider delinquency and turnover.  Also, consider that the same hot water heater, say $1,000 is needed in a $400/mo unit as is needed in a $800/mo unit, but in once case it is 2.5x rent and the other is just over a month of rent.  I have known some local guys that do well at these low rent points but the out of state investors often struggle.
With that said, keep looking because Cleveland has a ton of opportunity - just be careful.

Originally posted by @Napatarong Wannaphaschaiyong :

I have decided to invest in out of state properties but not sure where to invest. I am thinking about Cleveland, OH and Dearborn, MI since the real estate there are quite affordable and good cashflow for a turn key properties (according to the listing). I don't know if I am missing any detail but the cashflow sounds almost too good to be true (ex 8 beds 4 baths fully occupied $1500/month for a price of $70k). I would like to hear from a local or someone who has properties there if this is true or am I missing something? I am also open to invest in other states please let me know if you have any detail. Feel free to connect with me if you think we can work together. I am looking to purchase a turn key property for less than 200k that also meet the 1% rule criteria for my first property. Thank you for taking your time to answer my question.

 If you're only getting $1,500/mo out of a quad in Cleveland it's probably in the hardcore ghetto. If you're familiar with that type of investing I'd say go for it. However as you've posted this question, I assume you aren't familiar with the hardcore ghetto. It's a whole different animal and I don't recommend it for out of staties.

@Napatarong Wannaphaschaiyong do some thinking about what you are trying to accomplish. That will help guide and narrow your choices. If it’s out of state your job isn’t so much to run the numbers as it is to find a good team on the ground that’s able to do that for you, or at least help you get the info to run the numbers.

And I’ve said it 10000 times, but house hacking your own residence is the easiest way to get started in my opinion. It’s worth a consideration.

Originally posted by @Napatarong Wannaphaschaiyong :

I have decided to invest in out of state properties but not sure where to invest. I am thinking about Cleveland, OH and Dearborn, MI since the real estate there are quite affordable and good cashflow for a turn key properties (according to the listing). I don't know if I am missing any detail but the cashflow sounds almost too good to be true (ex 8 beds 4 baths fully occupied $1500/month for a price of $70k). I would like to hear from a local or someone who has properties there if this is true or am I missing something? I am also open to invest in other states please let me know if you have any detail. Feel free to connect with me if you think we can work together. I am looking to purchase a turn key property for less than 200k that also meet the 1% rule criteria for my first property. Thank you for taking your time to answer my question.

Becareful of "turnkey" rentals. Make sure the financials are sound and have a good record. Its not uncommon for sellers to inflate income and diminish expenses. As for getting a 1% deal under $200k, very doable, you just need a good agent or wholesaler, etc. I just brokered a duplex in Columbus that met the 1.3% rule for $140k. Those properties won't be turnkey though, you'll need to do some work to get it to your liking, but that's where the real money is made.

 

Originally posted by @Napatarong Wannaphaschaiyong :

I have decided to invest in out of state properties but not sure where to invest. I am thinking about Cleveland, OH and Dearborn, MI since the real estate there are quite affordable and good cashflow for a turn key properties (according to the listing). I don't know if I am missing any detail but the cashflow sounds almost too good to be true (ex 8 beds 4 baths fully occupied $1500/month for a price of $70k). I would like to hear from a local or someone who has properties there if this is true or am I missing something? I am also open to invest in other states please let me know if you have any detail. Feel free to connect with me if you think we can work together. I am looking to purchase a turn key property for less than 200k that also meet the 1% rule criteria for my first property. Thank you for taking your time to answer my question.

Have the team in place to turn tenants. Also - are paying cash or financing?

 

Originally posted by @Napatarong Wannaphaschaiyong :

I have decided to invest in out of state properties but not sure where to invest. I am thinking about Cleveland, OH and Dearborn, MI since the real estate there are quite affordable and good cashflow for a turn key properties (according to the listing). I don't know if I am missing any detail but the cashflow sounds almost too good to be true (ex 8 beds 4 baths fully occupied $1500/month for a price of $70k). I would like to hear from a local or someone who has properties there if this is true or am I missing something? I am also open to invest in other states please let me know if you have any detail. Feel free to connect with me if you think we can work together. I am looking to purchase a turn key property for less than 200k that also meet the 1% rule criteria for my first property. Thank you for taking your time to answer my question.

Cleveland, Ohio has amazing cash flow. You just need to make sure you are working with someone that understands the different areas so you are not getting into a war zone (unless that is what you are looking for).

Thank you everyone for answering my questions. After giving it a lot of thought, I re-evaluated my investment strategy, and I am going to go with a house hacking strategy instead. Even though the area where I live is expensive but a 700k Triplex with 3.5% down in my city will still give me a positive cashflow. As for my future investment, I am going to try both BRRR strategy and a buy and hold light rehab strategy. After all, I want to know which strategy will fit me best.

Originally posted by @Napatarong Wannaphaschaiyong :

Thank you everyone for answering my questions. After giving it a lot of thought, I re-evaluated my investment strategy, and I am going to go with a house hacking strategy instead. Even though the area where I live is expensive but a 700k Triplex with 3.5% down in my city will still give me a positive cashflow. As for my future investment, I am going to try both BRRR strategy and a buy and hold light rehab strategy. After all, I want to know which strategy will fit me best.

 Thats awesome. It is good to have a strategy and mind. House hacking is a perfect way to start. You can always change your strategy down the road, but it is important to become an expert in one thing.

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