Expanding portfolio with 75K

Expanding portfolio with 75K

Member since 2021 · 10 posts · 15 votes

Hello Bigger Pocketonians! I consider myself well educated on real estate(I hope!!). I currently own two homes in California. One in SD County, which is my only rental property and am experiencing what they call "Infinite return" (Thank you VA). And my other home is in Riverside County, also used VA. I am active duty military and retiring after 20 years of service, so my primary goal is cash flow. I am in the process of doing a cash out refinance for 75k. I am also doing a refinance on my rental property which will increase my cash flow aby 250 dollars. So my question, or opinion, is what should I do with this capital? I have been looking out of state in Texas to buy a SFH and am trying to find a deal good enough to cash flow. However, I cant find any worth it! Should I pull the trigger on this booming San Antonio market near all the military bases utilizing all of my capital in one bang. OR should I look at purchasing two smaller cash flowing properties in markets such as Ohio, or Tennessee, Atlanta, or Missouri? My wife is scared about OOS investments, for which i understand. She wants me to look at California markets, however, the only cash flowing markets in Cali that we can afford are 2 bedroom condos, but with that again, i would be using ALL of our capital on something priced high like this. So do you guys think we should use all the capital for ONE home, or distribute our funds even amongst two cash flowing properties!

I stay up super late looking for deals across the whole nation. I find properties that will cash flow, but am hesitant on pulling the trigger because i just dont know if I am paying for a legit home, or a polished turd. I take schools and the surrounding areas into consideration while looking in these markets. But when do you KNOW you are getting a solid deal?? My wife's biggest fear is NOT finding a tenant! Especially in a martket that has high rentals!

Thanks for stopping and reading my rant!!

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Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
4y
Originally posted by @Ryan Estes:

Hello Bigger Pocketonians! I consider myself well educated on real estate(I hope!!). I currently own two homes in California. One in SD County, which is my only rental property and am experiencing what they call "Infinite return" (Thank you VA). And my other home is in Riverside County, also used VA. I am active duty military and retiring after 20 years of service, so my primary goal is cash flow. I am in the process of doing a cash out refinance for 75k. I am also doing a refinance on my rental property which will increase my cash flow aby 250 dollars. So my question, or opinion, is what should I do with this capital? I have been looking out of state in Texas to buy a SFH and am trying to find a deal good enough to cash flow. However, I cant find any worth it! Should I pull the trigger on this booming San Antonio market near all the military bases utilizing all of my capital in one bang. OR should I look at purchasing two smaller cash flowing properties in markets such as Ohio, or Tennessee, Atlanta, or Missouri? My wife is scared about OOS investments, for which i understand. She wants me to look at California markets, however, the only cash flowing markets in Cali that we can afford are 2 bedroom condos, but with that again, i would be using ALL of our capital on something priced high like this. So do you guys think we should use all the capital for ONE home, or distribute our funds even amongst two cash flowing properties!

I stay up super late looking for deals across the whole nation. I find properties that will cash flow, but am hesitant on pulling the trigger because i just dont know if I am paying for a legit home, or a polished turd. I take schools and the surrounding areas into consideration while looking in these markets. But when do you KNOW you are getting a solid deal?? My wife's biggest fear is NOT finding a tenant! Especially in a martket that has high rentals!

Thanks for stopping and reading my rant!!

I would buy two smaller cash flowing properties in markets such as Columbus, Ohio

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  • Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    4y

    Texas is hot. Long term wise you'd have great appreciation just low cash flow. Midwest is good for cashflow, you can use the 75k to purchase multiple SF or a MF. Either way establish a team. Network and have a core team to help. From there offer and get the ball rolling

  • Investor · Fort Worth, TX · Member since 2021 · 68 posts · 57 votes
    4y

    What are you considering as a "good deal"? Out of curiosity. I've heard great things about the markets in Texas, and that there are plenty of deals to be found. I'm in the Nashville area, and I still see 1% rental opportunities very regularly. That is the general rule that I've seen many investors follow, in regard to LTRs. Also, congrats on your success in Cali! What branch are you retiring from? 

  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    4y
    Originally posted by @Ryan Estes:

    Hello Bigger Pocketonians! I consider myself well educated on real estate(I hope!!). I currently own two homes in California. One in SD County, which is my only rental property and am experiencing what they call "Infinite return" (Thank you VA). And my other home is in Riverside County, also used VA. I am active duty military and retiring after 20 years of service, so my primary goal is cash flow. I am in the process of doing a cash out refinance for 75k. I am also doing a refinance on my rental property which will increase my cash flow aby 250 dollars. So my question, or opinion, is what should I do with this capital? I have been looking out of state in Texas to buy a SFH and am trying to find a deal good enough to cash flow. However, I cant find any worth it! Should I pull the trigger on this booming San Antonio market near all the military bases utilizing all of my capital in one bang. OR should I look at purchasing two smaller cash flowing properties in markets such as Ohio, or Tennessee, Atlanta, or Missouri? My wife is scared about OOS investments, for which i understand. She wants me to look at California markets, however, the only cash flowing markets in Cali that we can afford are 2 bedroom condos, but with that again, i would be using ALL of our capital on something priced high like this. So do you guys think we should use all the capital for ONE home, or distribute our funds even amongst two cash flowing properties!

    I stay up super late looking for deals across the whole nation. I find properties that will cash flow, but am hesitant on pulling the trigger because i just dont know if I am paying for a legit home, or a polished turd. I take schools and the surrounding areas into consideration while looking in these markets. But when do you KNOW you are getting a solid deal?? My wife's biggest fear is NOT finding a tenant! Especially in a martket that has high rentals!

    Thanks for stopping and reading my rant!!

    I would buy two smaller cash flowing properties in markets such as Columbus, Ohio

  • Member since 2021 · 10 posts · 15 votes
    4y
    Originally posted by @Justin Vogelgesang:

    What are you considering as a "good deal"? Out of curiosity. I've heard great things about the markets in Texas, and that there are plenty of deals to be found. I'm in the Nashville area, and I still see 1% rental opportunities very regularly. That is the general rule that I've seen many investors follow, in regard to LTRs. Also, congrats on your success in Cali! What branch are you retiring from? 

     Justin, 

    Appreciation is awesome. However, it is something we cannot control. It may happen, it may not happen, or it may happen very very slowly compared to other markets. With my home search criteria in Texas, I am not finding any properties that will cash flow the way i want it to. Texas would be a long term play for me. I know, there are deals out there, but I haven't stumbled across any yet. And when or if I see something on sale below market value, i have to ask myself, "okay, why?". I have skimmed over Nashville, maybe i will take a look there! I always find myself searching back in Memphis, particularly around Millington.

    I appreciate it! Navy! If any veterans or AD military on here, I have one thing to say to you. TAKE ADVANAGE OF VA LOANS! There are ways to make this program flourish in YOUR favor with practically NO money. #Infinitereturns

  • Bakersfield, CA · Member since 2016 · 378 posts · 307 votes
    4y

    Have you looked into Central CA? There are some areas in the middle of the state that are still affordable and have cash flow potential. 

  • Investor · Fort Worth, TX · Member since 2021 · 68 posts · 57 votes
    4y

    @Ryan Estes I'll take your advice on the VA Loan!

    I would definitely suggest looking in the Nashville area closely, as well as Clarksville. Clarksville is right outside of Fort Campbell, and that market is hot as well. Homes there actually average 3 days on the market now, which is even faster than Nashville and they are generally more affordable there too. 

    You are correct about appreciation though. While it is never guaranteed, you can definitely make safer bets in certain areas. Nashville has been consistently in the top 5 markets nationwide and is predicted to continue in the future. If you ever have any real estate questions, feel free to reach out! I'm always happy to talk real estate or chat with other vets 

  • Joshua JanusBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
    4y

    I would buy cash flowing properties in either Cleveland or Columbus, Ohio. 

  • Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
    4y

    @Ryan Estes

    If you're looking for cashflow....definitely look outside of CA. 

    My first piece of advice would be to actually pick your target market. (Wherever that may be).

    From there talk to the local investors and agents there in order to build the right team and get the right contacts. The KEY is good property management, which you will find by talking to the right people. 

    Once you have the area picked out, and have a good set of people to call, start looking for properties that meet your criteria. 

    In terms of actual areas, I wouldn't focus on 10 different places as that would make things way too difficult to navigate. Pick 1-3 markets that you are really excited about and then start looking and start making offers!!!

    In my local market of Nashville, cashflow isn't much of play down here....outside of the surrounding counties where you can still get some decent rentals. 

    Some places to look into that I would recommend in TN (no particular order): Clarksville, Chattanooga, Dickson, Columbia, Spring Hill, Thompson's station, Ashland city.

    There's a waiting list here for rentals, so you shouldn't be worried about finding tenants. Assuming you don't price your rental way higher than market value. 

  • Realtor · Atlanta, GA · Member since 2021 · 98 posts · 54 votes
    4y

    Atlanta is rock solid. Great industry, population growth;  Happy  to send you and your wife a few listing to help you decide . Looking at actual deals always help

  • Real Estate Agent · Clarksville, TN · Member since 2018 · 5 posts · 3 votes
    4y

    @Ryan Estes Use your VA loan, look up properties in Clarksville, TN that have sat for 15+ days, ask the sellers to pay your closing costs (unheard of right now, but if it's been sitting & they don't want 2 mortgages, they will usually help), and get into a home for $0 down, $0 closing costs, and only pay some earnest money, ~$350 home inspection, and ~$600 appraisal. Now you have a rental, and Clarksville homes rent non-stop because it's a military town. Rentals are as competitive to get into as buying a home - property managers get 5-20 applications in 1st hour they are listed. If you need good property management companies, I can send you a list. If you need a list of homes that have been sitting, but will still pass VA appraisal, I can send you a list as well. PM me & rock on investing!

  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    4y

    The markets throughout Columbus are great for cash flow and appreciation hybrid.

    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
  • Real Estate Broker · Columbus, GA · Member since 2018 · 28 posts · 22 votes
    4y

    @Ryan Estes

    Congratulations on your successes.

    I would say that if you’re more interested in cash flow rather than appreciation to stay away from coastal cities because those are more appreciation investments. They are great for solid appreciation over time and longer term hold periods but they will not garner much in the form of cash flow. If you’re interested in cash flow investments you might want to stick to the Midwest or the South. Areas with a lower cost of living and a pattern of increasing population. These areas tend to have a much better cash flow up front, just don’t expect the same appreciation rates of those coastal cities. Think of it as a trade off, it’s harder to find a deal that gives you both high cash flow and high appreciation rate track records.

    As far as knowing when you get a good deal. That seems to mean something different depending on who you are talking to. It’s relative to what you’re comparing it to. Some people live by the 1% rule, some people buy at a specific cap rate or cash on cash return. Decide what is acceptable to you and underwrite every deal to see if it meets your standard.

  • Real Estate Consultant · Chattanooga, TN · Member since 2018 · 384 posts · 330 votes
    4y

    @Ryan Estes  Gotta love every agent who says "invest in my market!". Personally, I think you need to determine your strategy a bit more, and then consider a market.  You focus on cashflow and maintaining capital.  

    To me, the best path for that is BRRRing C class rentals: you recycle your capital, and C class is going to give you the highest cashflow.  BUT that's also a bumpy and higher risk road.  It may be out of you and your wife's comfort zone.  

    If so, then I'd say what about BRRRing B class properties?  

    If you go with either of those strategies, finding a good contractor used to working with OOS investors would be key to your plan.  I'd say pick a market where you have that.  Also, you'll want to pick a market that has a lot of those types of opportunities.

    If you don't want to take on BRRRing, then you can still recycle your capital by cash out refi'ing every few years in an appreciating market.  It changes the timeline of your growth, but is still powerful.  With this plan, your market focus would be different: appreciation matters more.

    Also, to take it in a totally different direction, if your goal is cashflow, are you considering STRs at all?  If you'll have the time to self-manage in your retirement, it could get you MUCH more cashflow than LTRs, and is very common for people to do OOS.

    Overall I'd say the investors I know are doing markets in Ohio and Tennessee for LTRs. If you're interested in the STR route, there are many options, and I'd recommend considering where you'd want to utilize an STR yourself!

  • Bonnie LowPro Member
    Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
    4y

    You said single family home, but are you looking to make it a LTR, STR or even a medium term rental? Those scenarios will dramatically change your COC return. If it were me, considering you already have one LTR, I'd shift to a STR purchase since your stated goal is cash flow and you will almost always have significantly greater cash flow with a STR. CA does have some affordable STR markets. Check out Big Bear and Lake Arrowhead. Texas also has STR opportunity and I was just reading one investor's post who focuses on STR and MTR in and around military bases because of the need for temporary furnished housing when service members transition to and from assignments. Really, there are STR opportunities almost anywhere - they may not all be year round and they may not all be in popular vacation spots like Florida - but search Airbnb and you'll find homes for rent pretty much everywhere. Just watch out for restrictive regulations in many markets. You have to do your homework. The MTRs seem to mostly avoid these regulations. One other note, we've been looking at OOS markets for LTR because the price tags are so low (relatively speaking). However, rents are also fairly low (also relatively speaking) and property taxes are surprisingly high in many markets you wouldn't expect. So, at the end of the day, we had to decide which opportunities provide us both the best cash flow and the best use of our deployable $ (COC return). Right now, that is STRs. We plan to execute two STR purchases in 2022 for the cash flow boost and continue buying LTRs for slow but steady income and portfolio growth since we still want a diverse portfolio.

  • Member since 2021 · 10 posts · 15 votes
    4y

    Good information, actually, GREAT information. At the end of the day, I absorb as much knowledge as I can from seasoned REI, but never make my decision solely off of what one says. I will assess and analyze my options and I appreciate all of your insights! Even if you are just trying to get me to invest in your area! Everyone will say their market is great, which it probably is! Thats why you are there! This is a great community to share tips and insight!

    I just don't have the time for STR. Even close by in Big Bear or Lake Arrowhead. The summer months worry me in that area and am just not comfortable taking that risk.

    What are your thoughts on using apartments/condos for cash flow? The numbers are there! I have found numerous properties in California mainly, 2bd2ba that generate about 300-400 dollars a month cash flow. Why aren't investors jumping on these? Maybe they are? There is HOA, but still, the numbers don't lie and the cash is there. I understand condos don't appreciate as much, but my goal is cash flow.

    Thanks!!

  • Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Ryan Estes good to see another Vet investor on here! VA was exactly how I got started too after living in our home for a year. Rinse and repeat! as stated by some of the others It really just depends on your goals. For me, I like the option of having moderate cash flow with high chance of appreciation as It will allow em to leverage that equity one day into more deals. I live in SoFlo and invest in other FL markets that are cheaper and currently on the rise is population growth such as Ocala and Cape Coral.

    Right now, I’m actually using a turnkey company for a new build project out in Cape Coral FL. Build price is about $265k all in with only needing 10% down. Rents are $2300/mo and post construction appraisals are around $340k to $410k depending on the lot location. Would be happy to connect to share my experiences in these markets! Good luck!

  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Ryan Estes 
    If you want cash flow look at investing out of state. The prices and cash flow will make more sense. The Midwest is going to have the best markets for this. Narrow in on a market that has lots of job opportunities and population growth. These are good indicators for out-of-state investors when picking a market to invest in as well as price and cash flow. I recommend Columbus OH I live and invest here currently. 

  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    4y

    @Ryan Estes

    A lot of people like investing in Ohio vs Cali due to the landlord friendly laws here, ability to scale up more quickly, and to get cash flow along with appreciation

    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
  • SoCal · Member since 2019 · 33 posts · 20 votes
    4y

    @Ryan Estes

    Where are you seeing that kind of cash flow in CA? Prices right now are insane. My CA rentals are doing well, but I bought them in the 1980s...:-) I, too, am looking at cash flow, which is why I have been investing out of state (like Ohio). I'm looking at Indiana next, but I have to run numbers and find a property manager.

  • Member since 2021 · 10 posts · 15 votes
    4y
    Originally posted by @Myriam Mourani:

    @Ryan Estes

    Where are you seeing that kind of cash flow in CA? Prices right now are insane. My CA rentals are doing well, but I bought them in the 1980s...:-) I, too, am looking at cash flow, which is why I have been investing out of state (like Ohio). I'm looking at Indiana next, but I have to run numbers and find a property manage

    So, my home in North SD county was purchased zero down in 2016. Our payments were about 2100 and started renting it out for 2500. Since then, with a refinance, brought our payment to 1800 and rental price of 3200. As far as properties NOW, I have seen a few condos in Santa Maria 3bd2ba 1100 sq ft going for about 250k. With the rental markets, it seems like a good deal? Do you know the Santa Maria area??

     Additionally, what areas of Ohio have you been invested in? Myself, I like eastern Cleveland like Painsville and the surrounding areas. But havent found the one yet. 

  • SoCal · Member since 2019 · 33 posts · 20 votes
    4y

    I'm not familiar with the Santa Maria area, but $250K for a 3/2 sounds pretty good. If it's a condo, you definitely want to check out the association, as they might limit rentals. Also check out the HOA fees, since those will eat into your cash flow. You can go on rentometer.com and plug in the address to see what rents are going for. My Ohio properties are in Eastern OH in the outskirts of Youngstown. Prices have really gone up lately, and less expensive properties are being snapped up by investors (who have a crew ready to do the rehab). I can't compete with those because I'm 1500 miles away and have to rely on my property manager's people, where I would pay retail. I heard good things about Painsville, OH actually! Real estate seems to have gotten crazy over the past year or so, and it's making me nervous. I don't know if it can go that way forever...

  • Nicholas MischPro Member
    Investor · Broadview Hts, OH · Member since 2016 · 310 posts · 280 votes
    4y

    Cleveland and subs has great cashflow with good appreciation as a bonus. Just make sure you form a trustable team wherever you choose to ensure you are getting what you think you are. 

  • SoCal · Member since 2019 · 33 posts · 20 votes
    4y

    You are so right, Nicholas Misch! It's all about the property manager and his/her team! I find the property management team BEFORE buying the property. 

  • New to Real Estate · Central Coast of California · Member since 2021 · 6 posts · 0 votes
    4y
    Originally posted by @Ryan Estes:
    Originally posted by @Myriam Mourani:

    @Ryan Estes

    Where are you seeing that kind of cash flow in CA? Prices right now are insane. My CA rentals are doing well, but I bought them in the 1980s...:-) I, too, am looking at cash flow, which is why I have been investing out of state (like Ohio). I'm looking at Indiana next, but I have to run numbers and find a property manage

    So, my home in North SD county was purchased zero down in 2016. Our payments were about 2100 and started renting it out for 2500. Since then, with a refinance, brought our payment to 1800 and rental price of 3200. As far as properties NOW, I have seen a few condos in Santa Maria 3bd2ba 1100 sq ft going for about 250k. With the rental markets, it seems like a good deal? Do you know the Santa Maria area??

     Additionally, what areas of Ohio have you been invested in? Myself, I like eastern Cleveland like Painsville and the surrounding areas. But havent found the one yet. 



    I am very familiar with the Santa Maria valley and all the surrounding areas.
    250K sounds like a awesome deal, but I would figure out where in Santa Maria the condo is located. The north side of the city is very populated, yet if you plan to invest in this area for rental properties you'll find tenants very fast. 

    The approx. price for sq. ft. is about $235. 

    I would find out like others have mentioned: does it have HOA fees? the location of the property? is there tenants living on the property?

    If you have any more question about Santa Maria or the central coast just let me know.

  • Rental Property Investor · MA · Member since 2019 · 85 posts · 37 votes
    4y

    @Patrick Bavaro Would you mind sharing the turn key provider you are using?  Have you used them before?

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