Long distance cash flow investing from Las Vegas

Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes

Based upon your selections on the Realtor. com top 100 cities for growth and appreciation, your selected cities rank accordingly. Did you notice what the #1 ranked city is?

The cities on your list like Cleveland and Milwaukee are older for multi units like built in the 1900's. Your choice to pay 50k all cash might buy an older 4plex or duplex, but overall lack appreciation. Plus, if you have a management company due to out of town, take 6% off the top. I would leverage your money, and use it as a down payment and get a loan.

Terry

50. Cleveland

98. Kansas City

97. Indianapolis

86. Milwaukee

81. Memphis

95. Atlanta

Top 100 Largest U.S. Metros Ranked by Forecasted 2018 Sales and Price Growth

Rank	Metro	2018 Sales Growth	2018 Price Growth
1	Las Vegas-Henderson-Paradise, Nev.	4.90	6.90
2	Dallas-Fort Worth-Arlington, Texas	6.02	5.57
3	Deltona-Daytona Beach-Ormond Beach, Fla.	5.47	6.00
4	Stockton-Lodi, Calif.	4.55	6.43
5	Lakeland-Winter Haven, Fla.	3.00	7.00
6	Salt Lake City, Utah	4.62	4.50
7	Charlotte-Concord-Gastonia, N.C.-S.C.	5.98	3.02
8	Colorado Springs, Colo	3.12	5.65
9	Nashville-Davidson–Murfreesboro–Franklin, Tenn.	1.00	7.67
10	Tulsa, Okla.	7.54	1.02
11	Seattle-Tacoma-Bellevue, Wash.	2.34	6.21
12	Spokane-Spokane Valley, Wash.	3.50	4.97
13	Austin-Round Rock, Texas	4.04	4.42
14	Miami-Fort Lauderdale-West Palm Beach, Fla.	3.10	5.28
15	Little Rock-North Little Rock-Conway, Ark.	7.00	1.37
16	Denver-Aurora-Lakewood, Colo.	1.75	6.54
17	Orlando-Kissimmee-Sanford, Fla.	1.24	6.88
18	Toledo, Ohio	5.16	2.95
19	Columbia, S.C.	5.07	3.00
20	Palm Bay-Melbourne-Titusville, Fla.	1.00	7.00
21	Jacksonville, Fla.	4.73	3.20
22	Durham-Chapel Hill, N.C.	5.18	2.62
23	Providence-Warwick, R.I.-Mass.	3.72	3.97
24	Akron, Ohio	5.89	1.70
25	North Port-Sarasota-Bradenton, Fla.	3.00	4.50
26	Chattanooga, Tenn.-Ga.	3.50	4.00
27	Worcester, Mass.-Conn.	3.77	3.68
28	Raleigh, N.C.	1.63	5.77
29	Tampa-St. Petersburg-Clearwater, Fla.	1.38	6.00
30	Grand Rapids-Wyoming, Mich.	2.96	4.25
31	Boise City, Idaho	2.00	5.00
32	San Jose-Sunnyvale-Santa Clara, Calif.	2.50	4.37
33	Greenville-Anderson-Mauldin, S.C.	2.80	4.00
34	Madison, Wis.	1.72	5.05
35	Albuquerque, N.M.	2.92	3.71
36	Houston-The Woodlands-Sugar Land, Texas	2.24	4.19
37	Winston-Salem, N.C.	3.00	3.21
38	Riverside-San Bernardino-Ontario, Calif.	0.52	5.66
39	Buffalo-Cheektowaga-Niagara Falls, N.Y.	1.27	4.89
40	Fresno, Calif.	1.29	4.81
41	San Francisco-Oakland-Hayward, Calif.	0.94	5.14
42	Detroit-Warren-Dearborn, Mich.	1.17	4.77
43	Phoenix-Mesa-Scottsdale, Ariz.	3.66	2.26
44	Oxnard-Thousand Oaks-Ventura, Calif.	2.29	3.62
45	Augusta-Richmond County, Ga.-S.C.	2.50	3.34
46	Tucson, Ariz.	3.00	2.71
47	San Diego-Carlsbad, Calif.	2.51	3.19
48	Youngstown-Warren-Boardman, Ohio-Pa.	3.01	2.50
49	Harrisburg-Carlisle, Pa.	2.50	3.00
50	Cleveland-Elyria, Ohio	3.00	2.48
51	Birmingham-Hoover, Ala.	3.00	2.42
52	McAllen-Edinburg-Mission, Texas	2.38	3.00
53	Charleston-North Charleston, S.C.	3.64	1.69
54	New York-Newark-Jersey City, N.Y.-N.J.-Pa.	1.16	4.15
55	Jackson, Miss.	0.00	5.30
56	Virginia Beach-Norfolk-Newport News, Va.-N.C.	1.40	3.82
57	Boston-Cambridge-Newton, Mass.-N.H.	2.55	2.64
58	Pittsburgh, Pa.	3.53	1.62
59	Oklahoma City, Okla.	1.49	3.51
60	Portland-South Portland, Maine	5.00	0.00
61	Cape Coral-Fort Myers, Fla	1.00	3.99
62	El Paso, Texas	2.69	2.24
63	Minneapolis-St. Paul-Bloomington, Minn.-Wis.	0.00	4.93
64	Knoxville, Tenn.	2.00	2.92
65	Allentown-Bethlehem-Easton, Pa.-N.J.	4.12	0.57
66	Bakersfield, Calif.	1.00	3.61
67	Urban Honolulu, Hawaii	1.43	3.11
68	Des Moines-West Des Moines, Iowa	3.20	1.19
69	Greensboro-High Point, N.C.	1.34	2.97
70	Springfield, Mass.	1.24	3.00
71	New Orleans-Metairie, La.	2.00	2.24
72	Cincinnati, Ohio-Ky.-Ind.	1.47	2.32
73	Wichita, Ks.	2.23	1.49
74	Richmond, Va.	2.68	1.02
75	Columbus, Ohio	0.05	3.58
76	Sacramento–Roseville–Arden-Arcade, Calif.	1.00	2.61
77	Rochester, N.Y.	1.56	2.02
78	Hartford-West Hartford-East Hartford, Conn.	4.46	-1.05
79	Albany-Schenectady-Troy, N.Y.	0.75	2.55
80	Dayton, Ohio	3.01	0.19
81	Memphis, Tenn.-Miss.-Ark.	1.37	1.82
82	Scranton–Wilkes-Barre–Hazleton, Pa.	1.18	1.81
83	Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.	3.78	-1.04
84	Chicago-Naperville-Elgin, Ill.-Ind.-Wis.	0.00	2.57
85	Syracuse, N.Y.	0.00	2.57
86	Milwaukee-Waukesha-West Allis, Wis.	0.00	2.48
87	Baltimore-Columbia-Towson, Md.	0.48	1.82
88	New Haven-Milford, Conn.	2.96	-0.67
89	Washington-Arlington-Alexandria, D.C.-Va.-Md-W.V.	0.00	2.25
90	Omaha-Council Bluffs, Neb.-Iowa	0.00	2.18
91	Louisville/Jefferson County, Ky.-Ind.	-2.74	4.92
92	San Antonio-New Braunfels, Texas	0.37	1.52
93	Portland-Vancouver-Hillsboro, Ore.-Wash.	-3.48	4.98
94	Baton Rouge, La.	0.00	1.50
95	Atlanta-Sandy Springs-Roswell, Ga.	-1.88	2.99
96	Los Angeles-Long Beach-Anaheim, Calif.	-2.10	3.09
97	Indianapolis-Carmel-Anderson, Ind.	3.49	-2.53
98	Kansas City, Mo-Kan.	0.00	-0.12
99	St. Louis, Mo.-Ill.	0.00	-2.83
100	Bridgeport-Stamford-Norwalk, Conn.	-0.35	-2.87

Realtor.com’s model-based forecast uses data on the housing market and overall economy to estimate values for these variables for the year ahead. The forecast result is a projection for annual total sales increase (total 2018 existing-home sales vs. 2017) and annual median price increase (2018 median existing-home sales price vs. 2017).

1 Reply

Brandon P.Pro Member

Investor · Paradise, CA · Member since 2015 · 102 posts · 15 votes

8y

Go with a higher purchase price. The tenant is going to be section 8. You will likely see very little next after taxes etc

0 Reply

Kyle McCorkel

Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes

8y

Harry Means Good luck. I’ve invested in Indy and had some success. I agree that you’ll probably want to leverage your money and buy properties with $100k or so. Higher class tenant with less headaches...usually. If you own your primary free and clear you could be sitting on a gold mine of equity. I’d look into getting a Home Equity Line Of Credit (HELOC).

0 Reply

Tom Ott

Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes

8y

Originally posted by @Harry Means:

Hey everyone. My name is Harry, I live in Las Vegas, and I am looking to invest in rentals in the midwest or south for cash flow. I currently own my primary residence and also a 3/2 sfr rental an hour outside of Las Vegas that is free and clear, that I have owned/self managed for 8 years. I am in the planning stage of the process and trying to figure out the details so I have a viable plan. Here is where I am at so far, please chime in with obvious issues that I am not seeing, opinions, tips, etc.

Type:

Preferably multifamily

Price Point/Financing:

I would like to be under $40k, I have the cash to close on deals of this size. I wanted to do the Fannie Mae delayed financing, but with it being under $50k, that may be more difficult. If I go $50k+, I would need to tap the equity in my rental. Either way I want to be at 1% for net cash flow and use the brrrr method to expand. I would like to find a local bank who works with investors in whatever location I decide on.

Condition:

Due to the distance, cosmetic to light rehabs. I would like to get the systems and contacts in place to take on larger projects, but initially I need to stick to light rehabs.

Location: (Needs to be somewhat close to airport if outside of major metro area)

Cleveland, OH

Kansas City, MO

Indianapolis, IN

Milwaukee, WI

Memphis, TN

Atlanta, GA

So that is where I am at as of now, any tips or suggestions are appreciated. Thanks

Cleveland has a great rental market and it is very hot for outside investors. I would suggest researching the neighborhoods you are thinking about getting into. Some here can be bad while others are amazing. Good luck!

0 Reply

Alexander FelicePro Member

Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes

8y

@Harry Means I do something similar.

I buy SFR out of state and live in Las Vegas, at a similar price point.

I know you said you want multifamily but I think you'll find it difficult to buy quality MF units at 50K all in. I buy in the NC area and use the BRRRR method with value add. I like Section 8 tenants, but even with that I wouldn't go D-class. Too much hassle, and the maintenance runs up. IMO it's better to pay a little more now and run a low overhead operation.

What I would do is analyze 20-30 deals in each of your proposed areas and find the ones that seem like they will work best for you. Then I would start team building. Your team is the single most important factor in your success when investing long distance. Start finding rehab teams and property managers immediately so you can build long term relationships.

also, look into delayed financing. Talk to a lender before you close on a house and get the details. You should be able to close immediately after tenants are in place for 100% of HUD. This will allow you to move quickly onto the next one.

[email protected]Podcast Guest on Show #301

2 Reply

Hadar OrkibiPro Member

Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes

8y

@Terry Lao I hope you realise that each time you post this list it triggers the keyword alert for each and every person that have any of the cities on the list.

Thanks

0 Reply

Harry Means

OP

Las Vegas, NV · Member since 2017 · 4 posts · 3 votes

8y

@Terry Lao Thanks for that list. I am not so much concerned with appreciation as I am with cashflow. Las Vegas doesn't make sense for cashflow. I am going to look into leveraging my money for nicer properties.

@Brandon P. Thanks for the insight

@Kyle McCorkel I don't own my primary free and clear, but do own my rental. I know that'll limit me further than my primary when it comes to pulling out equity. I am going to look at some more expensive properties, that seems to be a reoccurring recommendation.

@Tom Ott I have found some duplexes for under $100k in what appears to be good neighborhoods in Cleveland based on the Cleveland Neighborhood Guide blog post on here. Is that breakdown pretty accurate?

@Alexander Felice Thanks for the info and advice. I definitely want to use the delayed financing exemption. With delayed financing, is getting 100% of HUD automatic as long as it is not more than the homes value, or is it up to 100% of HUD as long as it is below XX% of appraised value?

1 Reply

Account Closed

Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes

8y

@Harry Means

I just heard a great podcast (show #257- its the most recent one). The guys states you should find the people first:

1. Lender because this is the hardest. They know real estate agents who they can refer to you.

2. Real Estate Agents to find you deals. They know Property Managers who they can refer to you.

3. Property Managers to do the obvious. They know contractors who they can refer to you.

4. Contractors to do the rehab.

You really should listen to it.

Thank you @David Greene because you confirmed how I am going about it.

All the best,

Jorge

2 Reply

Harry Means

OP

Las Vegas, NV · Member since 2017 · 4 posts · 3 votes

8y

Jorge Ruiz I listened to that podcast on my way to work and immediately bought his book as well. Thanks for the help.

1 Reply

Account Closed

Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes

8y

@Harry Means

I pre-ordered it once I saw the title. Can't wait to read it. I am looking to first invest in Milwaukee so keep in touch as I wouldn't mind sharing what I learn.

Jorge

0 Reply

Michael Norris

Specialist · Strongsville, OH · Member since 2016 · 304 posts · 217 votes

8y

Solid advice from Jorge Ruiz above

Are there multi-fam's in the Cleveland market for $40k to $50k all in? Yes

I just set up insurance for an out of state investor who bought 5 occupied rental properties for $150k - not the best areas but on paper the deal made sense for the buyer and the houses were in decent shape.

For $50k will you get turn key? Probably not, so you should be prepared for rehab work which could be extensive on a property in that price range (roof, HVAC, Electric Panel, Windows, etc). Get it inspected!!

Another issue that comes up a lot with out of state investors - Keep an eye on the taxes! We have much higher taxes than you would probably expect on a house in that price range. It doesn't have to kill a deal but you need to account for it in your cash flow projection so you don't get any nasty surprises.

All that said there are great investment opportunities in Cleveland.

I'm no lending expert as I stick with cash deals right now but I think you may have trouble with bank financing this type of purchase - you may be better off with a private lender to get you into the property and get it fixed up and once it's rented out Re-Fi to a traditional lender once you can show cash flow.

Good luck!

0 Reply

Mike D'ArrigoPro Member

Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes

8y

@Harry Means These are all good cash flow markets, however, anything in the $40K price range is going to be in a rough, high crime area. I know the Indianapolis and Kansas City market and can assure you that this is not an asset class that performs well, especially for the out of state investor. Personally, I think you would be much better off financing a better class of property upfront rather than paying cash and doing delayed financing. I'd be happy to talk to you about our experience with low end properties in Indy and KC.

0 Reply

Kevin HoagPro Member

Insurance Agent · Cleveland, OH · Member since 2013 · 206 posts · 98 votes

8y

@Harry Means On paper your strategy sounds great but let me be the guy to play devils advocate. While the BRRRR strategy is great in theory it is meant more for someone to do in their local area with sweat equity or for someone who has established relationships and connections with systems in place.

Even then many times those types of deals never make it onto the market and are sold by word of mouth to the guys locally. It is difficult and risky for a real estate agent to try and give an out of state buyer an entire estimate of repairs and be 100% accurate. By the time you find a contractor to go look at the property and coordinate it with the sellers or agent. The deal is already contingent. Focus on a more simplistic approach.

At your current stage I would look for a great realtor, lender and insurance agent who all own rentals and specializes in this industry. If they are doing it themselves then they should have reputable referrals for you to look into. I would also focus on properties that are more than 90% complete and you are able to leverage your financing. If debt does not bother you then you can buy 3 homes with 40k cash instead of one. You will have instant cash flow and far less problems and headaches while you learn the area and the struggles of the city you invest in.

Good Luck,

[email protected]216-401-4412

1 Reply

Michelle Tippit

Las Vegas, NV · Member since 2017 · 6 posts · 1 vote

8y

I’m looking for pretty much the same thing. Cash flow is very hard to find in vegas.

0 Reply

Account Closed

Contractor · Los Angeles, CA · Member since 2015 · 887 posts · 323 votes

8y

@Michael Norris

They may not be in the best areas like you said but if your play is cash flow and cash flow only then go for it. You have to find the right PM who knows the areas well and knows how to deal with such tenants. I know a guy who lives in New York and invest in the not so great areas of Milwaukee and does great. He's been a big help to me.

All the best,

Jorge

0 Reply

Alexander FelicePro Member

Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes

8y

Originally posted by :

@Alexander Felice Thanks for the info and advice. I definitely want to use the delayed financing exemption. With delayed financing, is getting 100% of HUD automatic as long as it is not more than the homes value, or is it up to 100% of HUD as long as it is below XX% of appraised value?

it's 100% of HUD or 75% LTV whichever is lower.

[email protected]Podcast Guest on Show #301

0 Reply

Long distance cash flow investing from Las Vegas

Long distance cash flow investing from Las Vegas

Investor-friendly agents in Las Vegas, NV

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