I know I should start now but where is the question
Newark, CA · Member since 2016 · 15 posts · 4 votes
Hello BP community, I am a home owner for about 3 years and now ready for rental investment. I am here in SF bay area but market here is super hot to jump into investing in RE. I am thinking about TX, AR, CO or OR or even anywhere. For a first timer like me, where would be the best location for now. ideas, leads/connections are appreciated.
I have been following several other discussions on the similar topic here in BP that other new members started but wanted to get feedback here so that I can concentrate and keep track.
The Northwest Indiana rental market can be great if you are smart about it. The taxes are lower here which if you do things right you should be able to cashflow more. Also there is a large demand for rentals here as the rents are cheaper than Chicago (because of property taxes) so people move here all the time from Illinois.
The Northwest Indiana rental market can be great if you are smart about it. The taxes are lower here which if you do things right you should be able to cashflow more. Also there is a large demand for rentals here as the rents are cheaper than Chicago (because of property taxes) so people move here all the time from Illinois.
I will second what Mr Tannehill has to say about NWI. Great values can be found in the $65-75k range and these are turnkey properties from a solid TK provider (not me). Low taxes, close to Chicago for jobs, and landlord friendly state (plus we have the Cubs!).
The rental market in Indianapolis is pretty good also.
Dilan-
First off welcome and congratulations on jumping into a great wealth building adventure!
Baltimore is the hottest market in the country right now, and one of the best kept secrets despite Realty Trac naming it the #1 SFR rental market in the country for 2016.
We boast small city property pricing with big city rental income, and comfortably meet the 1% rule with plenty of built in equity left over.
To boot, being an experienced Turnkey provider, we have a system in place that does all the heavy lifting for you.
Message me and I'd be happy to share example properties that show how a $75k property can earn 16%+ NOI.
Good luck to you and look forward to hearing your successes!
Dilan,
Welcome to the community! Northwest Indiana is a great area for B&H's. Some of the Chicago suburbs are good as well. Indiana taxes are lower than Illinois, but Illinois rents are higher than Indiana, but not by much. I recently partnered with a hedge fund and I can offer you SFR's at 55 cents on the dollar. They're pre foreclosures. I have a list for Illinois and Indiana is coming very soon. I also have a rehab crew, property manager and a realtor for flipping. So I can offer you the "entire" package, if you need those services. I get a new list about every 3 weeks. These properties are NOT available to the public. The Illinois list only contained Cook County, and there were over 1200 properties on it! So if I can be of service, PM me and we'll go from there.
@Scott Steffek Does your list have anything in Indianapolis or any county touching Marion county? If so send me that list also please.
Edward,
I will have a list for Indianapolis in a few weeks. I'm already working with an investor down there. However, I'm always open to more business. I don't just send out the list at random. If you'd like to talk about what we offer and whether or not we have a fit, feel free to PM and we'll talk.
Dilan-
First off welcome and congratulations on jumping into a great wealth building adventure!
Baltimore is the hottest market in the country right now, and one of the best kept secrets despite Realty Trac naming it the #1 SFR rental market in the country for 2016.
We boast small city property pricing with big city rental income, and comfortably meet the 1% rule with plenty of built in equity left over.
To boot, being an experienced Turnkey provider, we have a system in place that does all the heavy lifting for you.
Message me and I'd be happy to share example properties that show how a $75k property can earn 16%+ NOI.
Good luck to you and look forward to hearing your successes!
Is that 16% with financing or cash on cash?
Great question, the CoCR is in the 20-30% range.
The NOI would be after taxes, insurance, and management fees only. Financing would reduce the return a little more.
I will second what Mr Tannehill has to say about NWI. Great values can be found in the $65-75k range and these are turnkey properties from a solid TK provider (not me). Low taxes, close to Chicago for jobs, and landlord friendly state (plus we have the Cubs!).
Thanks Adrien, curious, what is a TK provider?
Dilan-
First off welcome and congratulations on jumping into a great wealth building adventure!
Baltimore is the hottest market in the country right now, and one of the best kept secrets despite Realty Trac naming it the #1 SFR rental market in the country for 2016.
We boast small city property pricing with big city rental income, and comfortably meet the 1% rule with plenty of built in equity left over.
To boot, being an experienced Turnkey provider, we have a system in place that does all the heavy lifting for you.
Message me and I'd be happy to share example properties that show how a $75k property can earn 16%+ NOI.
Good luck to you and look forward to hearing your successes!
Thanks Kevin! Does turnkey mean a management team? 16% NOI includes management fees?
Dilan,
Welcome to the community! Northwest Indiana is a great area for B&H's. Some of the Chicago suburbs are good as well. Indiana taxes are lower than Illinois, but Illinois rents are higher than Indiana, but not by much. I recently partnered with a hedge fund and I can offer you SFR's at 55 cents on the dollar. They're pre foreclosures. I have a list for Illinois and Indiana is coming very soon. I also have a rehab crew, property manager and a realtor for flipping. So I can offer you the "entire" package, if you need those services. I get a new list about every 3 weeks. These properties are NOT available to the public. The Illinois list only contained Cook County, and there were over 1200 properties on it! So if I can be of service, PM me and we'll go from there.
Glad to be here and connect with great people like you. I am a newbie and too much info is overwhelming. what exactly do you mean when you are saying you offer pre foreclosures at 55 cents on dollar?
Dilan-
First off welcome and congratulations on jumping into a great wealth building adventure!
Baltimore is the hottest market in the country right now, and one of the best kept secrets despite Realty Trac naming it the #1 SFR rental market in the country for 2016.
We boast small city property pricing with big city rental income, and comfortably meet the 1% rule with plenty of built in equity left over.
To boot, being an experienced Turnkey provider, we have a system in place that does all the heavy lifting for you.
Message me and I'd be happy to share example properties that show how a $75k property can earn 16%+ NOI.
Good luck to you and look forward to hearing your successes!
Thanks Kevin! Does turnkey mean a management team? 16% NOI includes management fees?
btw I got my answer.
@Dilan Pradhan What TK (turnkey) means to me is that all of the elements of locating, purchasing, rehabbing, leasing and managing a property are in place for the investor. The whole team is in place and may be under the same roof, or separately owned companies working in tandem. The investor comes in, and at purchase (closing), or very nearly there after, the property is cashflowing because it is occupied with a paying tenant. Now it is true many use the turnkey label differently, with a less complete service and risk assumption, but that I wouldn't consider a truly a turnkey investment.
Hi Dilan, Im a newish investor also. Husband and I bought our first house there in Redwood City in 2009, fixed it up and rented with a couple roommates ( we were in our 20's :). Then we bought a fourplex in Salinas (Monterey county), then Lancaster (45 min north of LA). Then the market became hotter in CA, so we decided to take more risks and bought here in a lower income in downtown Dallas. But long story short, we ran into tons of issues being an out of state investors. Our Dallas PM was ineffective, they may have "lost" some rent payments,, and we ran into almost every problem you can think of and lost approx $3K every month. So we decided to pack up and move here to Dallas (good thing husband and I are both nurses, so our jobs are easy to relocate with). We evicted approx 16 tenants during the first year alone (Out of 27 units). Now we make a decent profit. But it was an eye openner, with the perils of out of state investing. I dont want to sound discouraging, but just wanted to share, Being a not so sophisticated investor. On a good note tho, our 3 properties there in CA are running good with us here in TX for 1 year now. But I have my doubts our properties in TX would run as good if we go back to CA. But we will see as we are still trying to keep systems in place. We are looking into Washington State next. BTW, welcome to biggerpockets!
@ Zen Ouano
Thanks Zen, yes that is exactly my fear too. I have a potential partner there in Houston and we are talking everyday to start our first investment. I tried my best to start here in CA but given the market is so hot, I gave up. I think TX esp Houston area if our next target because my partner will be there. Do you have any investment in Houston?
thanks again for chiming in.
No. Just here in Dallas. We have a 27 unit in downtown Dallas, a duplex by Lovefield Airport, and a paid up condo North Dallas (where we live). Yeah, I think that was our problem, we did not know anyone here in TX and we had no systems in place. But I guess as long as you have a trusted partner, and you are buying in a good location (decent renters, solid industries, good local economy) it may work. PROS here in TX: 1) eviction is simple and fast, 2) growing state, 3) landlord friendly, 4) no state tax (but wont apply to you as you are a CA resident so you may have to pay taxes to CA anyway). CON: 1) people are less afraid of eviction (we've never had to evict any of our 9 tenants in CA bec there a less rentals and tenants are aftraid of javing bad recods -- speaking personally, with our rentals at good proximity to bigger cities). Here in Dallas and TX in general, there are lots of rentals competing for renters (IMO). 2) no state tax means you have to pay higher property taxes. In Dallas county, its approx. 2.8% and it gets reassessed yearly or once every 3 years depending on what kind of property you have. In CA you have prop 13. 3) we pay more on property insurance here in Tx than CA bec of hail or tornado. Although we do pay a bit more with quake insurance in Ca. Biggest lesson I learned, have systems in place and having boots on the ground is invaluable. Thats why we are planning to set up camp in WA before purchasing anything. Anyway, good luck and stay cool in SF Bay.
Zen, you mentioned you have few rentals here in Redwood city. I am wondering if you would like to share more experience and your wisdom similar to what you have already shared for free for my service that I can offer. Basically asking you to be my mentors and I can offer to look after your rental prop here. This way I will know rental properties first hands. Like you were saying all the problems with tenants etc. I am a home owner for about 3 yrs and have done various diys and repairs myself which qualifies me as a handyman. Things I have done myself such as garage door, water heater, front lawn replacement. I can be your property manager so that I can see the market first hand, and you keep giving me your guidance. You seem to be a very nice person, and i have lots of respect for a nurse because my sister is a nurse too. PM me if interested.
You'll have a hard time in any of those states for cash flow, except TX. But even the returns there are minimal compared to some other markets right now. And inventory is low.
My faves right now are Chicago, Indy, and KC. Even Philly has good stuff.
Any property type or location preferences specifically?
Thanks @Dilan Pradhan. Haha I am a nice person :) Although I dont know Id qualify to be a mentor as I am newish to RE myself, but of course I can share whatever lessons we've learned as we've stumbled through quite a bit of road blocks with the Dallas prop here.
And no, we only have 1SFR rental there in RC, our tenant arranges and pays for the all repairs herself (she lets us know tho). We lucked out, but also at $5k/mo her rent is less than market, so she lucked out with us also. One 4plex is in Salinas and other 4plex is in Lancaster. They are both managed by PMs for 3 years now and both PMs are very good.
I agree that Ca is a tough market to cash flow now. And you may have to take a bigger risk and go out of state to have a higher cash flow. Or you can look into other areas of Ca that could potentially have more room to appreciate, easier to manage with a full time job, but sacrifice with smaller cash flow. It might depend how many years to retirement you have, your long term goals, and how much risk you can sleep with at night.
Thanks @Dilan Pradhan. Haha I am a nice person :) Although I dont know Id qualify to be a mentor as I am newish to RE myself, but of course I can share whatever lessons we've learned as we've stumbled through quite a bit of road blocks with the Dallas prop here.
And no, we only have 1SFR rental there in RC, our tenant arranges and pays for the all repairs herself (she lets us know tho). We lucked out, but also at $5k/mo her rent is less than market, so she lucked out with us also. One 4plex is in Salinas and other 4plex is in Lancaster. They are both managed by PMs for 3 years now and both PMs are very good.
I agree that Ca is a tough market to cash flow now. And you may have to take a bigger risk and go out of state to have a higher cash flow. Or you can look into other areas of Ca that could potentially have more room to appreciate, easier to manage with a full time job, but sacrifice with smaller cash flow. It might depend how many years to retirement you have, your long term goals, and how much risk you can sleep with at night.
Thanks Zen, I would like to connect with you. Please accept my connection request.
You'll have a hard time in any of those states for cash flow, except TX. But even the returns there are minimal compared to some other markets right now. And inventory is low.
My faves right now are Chicago, Indy, and KC. Even Philly has good stuff.
Any property type or location preferences specifically?
Hi @Ali Boone,
Thanks! I got preapproval yesterday and was excited to search prop around my area but math says it is not a good market for me :(. I have a friend in TX who wants to start with partnership but we have not finalize so far. I really want to keep it close for the first investment but lets see what market has for me.
I am looking for a 2 bd or 3 bd to start with. A condo, town house or anything. I see you live in CA, do you let property managements handle your investments? how is your experience so far?
@Dilan Pradhan, as a relative newbie myself looking for a good area to invest (I'm in a very expensive market too - southern CA), I looked for what a few people had already mentioned: low property taxes, low insurance costs, a newer property in good shape with low anticipated capex and repairs. For a rental, other than your mortgage, these will be your major expenses. The nice thing is that this information is very readily available and are more "fixed". Figure out what those are in the market you are looking in, and you can back-calculate to figure out what purchase price you can afford to make it a worthy investment. See what the comps are for in that area, and you'll get a rough idea if that is a market you could/should invest in. In the end, it is about making sure the numbers work. Best of luck!