Hi : looking to buy out of state

21 Replies

Charlie.

I invest 100% out of state and it has been the best thing I have done.

It's a great way to get started in real estate with low risk and low cash at play. 

Biggerpockets wrote a book called "Out of State Real Estate Investing" you can check that out. 

Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties by David Greene is one you can start with. I just got my copy and am on page 70 out of ~285. So far so good (as for my out-of-state rentals). 

@Charlie Gomez I’ve read most of David Greene’s book (after I already was investing out of state). I think it’s good to get the basics from that book, but be leery of doing major rehabs long distance, that’s a good way to get ripped off.

Start with the super basics. Buy a single family rental 20 percent down, 30 year fixed. Do that 2-3 times. Then if you want multifamily go do that. Then repeat. Then do commercial.

By time you get to your 5th or 6th deal you’ll know way more then you’ll ever learn just reading a book.

Originally posted by @Caleb Heimsoth :

Charlie Gomez I’ve read most of David Greene’s book (after I already was investing out of state). I think it’s good to get the basics from that book, but be leery of doing major rehabs long distance, that’s a good way to get ripped off.

Start with the super basics. Buy a single family rental 20 percent down, 30 year fixed. Do that 2-3 times. Then if you want multifamily go do that. Then repeat. Then do commercial.

By time you get to your 5th or 6th deal you’ll know way more then you’ll ever learn just reading a book.

 I agree with Caleb. Doing it is a fast way to learn. You can always read as you invest since there will be down times when you can't do much anyway (like when waiting for a loan to be processed or when you're waiting to close on a property)

Still trying to figure this site out! Thanks everybody else as I have read all your responses. I will have to do some digging now.

For context, I purchased a home in Napa, Ca 3 years ago on a 15 year fixed loan. Currently renting it out and almost done rehabbing it. Am a third of the way paid off and since homes are so expensive In Ca, I am looking out of state. Texas is where my friends invest in but I don’t have any state in mind. Just cheaper than Ca and decent rental laws. Austin is a nice town but its prices rival many cities in Ca. Thank you all again for your responses.

@Charlie Gomez - Texas is a great location with many different markets. Austin can be expensive but some of the other cities just north of Austin are a little more affordable (Round Rock, Georgetown, etc.). Also, I just moved from the Killeen area which is north of those cities. It's right next to Fort Hood (Army post) which is a large rental market. A lot of investors look there. I've lived in that area three times (my current rental is there). If you have any questions about that market just send me a message. I'd be glad to give you some details and/or answer any questions.

@Charlie Gomez have you thought of selling the rental you have now and redeploy thoat money into a less expensive investment? If you take a look at the rental calculator here on BP you are probably subsidizing someone’s living expenses with your current rental. As an example if your current place is worth $500,000 and you’re getting less than $5,000 monthly then you’re subsidizing your tenants living expenses. Redeploying the money in a less expensive market should greatly increase your monthly cash flow.

Thanks for the response Mike! I am a little green behind the ears but by this calculation, wouldn’t it mean that an insanely large amount of renters are getting their living cost subsidized in California? Yes, I have, although I’m not confident enough to sell my only rental yet, she is also a single mother and takes good care of the place so there’s that... I’m looking elsewhere at cheaper markets out of state. The out of state markets confuse me since I am so new to this, I’m still trying to get a grasp of what’s a deal,  what’s fair etc. 

Originally posted by @Caleb Heimsoth :

Charlie Gomez I’ve read most of David Greene’s book (after I already was investing out of state). I think it’s good to get the basics from that book, but be leery of doing major rehabs long distance, that’s a good way to get ripped off.

Start with the super basics. Buy a single family rental 20 percent down, 30 year fixed. Do that 2-3 times. Then if you want multifamily go do that. Then repeat. Then do commercial.

By time you get to your 5th or 6th deal you’ll know way more then you’ll ever learn just reading a book.

Thanks for the advice Caleb. I'm currently renting out a 3-1 in Napa, Ca on a 15 (not 30 year fixed.) I have 30% paid off after following Dave Ramsey's plan. I do not want to buy in California anymore for investing purposes since the cost is so high. Hence, I'm looking out of state. It doesn't have to be multi family solely, just cheaper with a decent ROI. I do agree with you that movement beats meditation, and experience is the best teacher, however, a nice book to show me some pointers would be nice to read so I can have a ballpark view of what's ahead. Thanks for you response!

Originally posted by @Allan Bishop Jr. :

@Charlie Gomez - Texas is a great location with many different markets. Austin can be expensive but some of the other cities just north of Austin are a little more affordable (Round Rock, Georgetown, etc.). Also, I just moved from the Killeen area which is north of those cities. It's right next to Fort Hood (Army post) which is a large rental market. A lot of investors look there. I've lived in that area three times (my current rental is there). If you have any questions about that market just send me a message. I'd be glad to give you some details and/or answer any questions.

Originally posted by @Allan Bishop Jr. :

@Charlie Gomez - Texas is a great location with many different markets. Austin can be expensive but some of the other cities just north of Austin are a little more affordable (Round Rock, Georgetown, etc.). Also, I just moved from the Killeen area which is north of those cities. It's right next to Fort Hood (Army post) which is a large rental market. A lot of investors look there. I've lived in that area three times (my current rental is there). If you have any questions about that market just send me a message. I'd be glad to give you some details and/or answer any questions.

Hey Allan, tried sending you a message. I cannot message you for some reason.

Originally posted by @Mike Bolen :

@Charlie Gomez have you thought of selling the rental you have now and redeploy thoat money into a less expensive investment? If you take a look at the rental calculator here on BP you are probably subsidizing someone’s living expenses with your current rental. As an example if your current place is worth $500,000 and you’re getting less than $5,000 monthly then you’re subsidizing your tenants living expenses. Redeploying the money in a less expensive market should greatly increase your monthly cash flow.

 What you're giving up on cashflow, you may be making up with appreciation.  If you're looking for pure cashflow, you will suffer on appreciation and vice versa.  I prefer a hybrid market for investing.  One that cashflows and appreciates modestly.  

Originally posted by @Derek Janssen :
Originally posted by @Mike Bolen:

@Charlie Gomez have you thought of selling the rental you have now and redeploy thoat money into a less expensive investment? If you take a look at the rental calculator here on BP you are probably subsidizing someone’s living expenses with your current rental. As an example if your current place is worth $500,000 and you’re getting less than $5,000 monthly then you’re subsidizing your tenants living expenses. Redeploying the money in a less expensive market should greatly increase your monthly cash flow.

 What you're giving up on cashflow, you may be making up with appreciation.  If you're looking for pure cashflow, you will suffer on appreciation and vice versa.  I prefer a hybrid market for investing.  One that cashflows and appreciates modestly.  

Thanks @Derek Janssen, that makes a lot of sense! Thanks also @Mike Bolen! These two comments have definitely got the wheels turning. Right now my rental is definitely subsidizing my tenants cost of living. For now that is ok for reasons I can't get in to. This definitely adds some perspective to my next purchase. Looking in Austin Tx, suburbs for a cash flow property. Still weighing out saving up as much as I can and buying or buying now. Not sure which is better.

Originally posted by @Charlie Gomez :
Originally posted by @Derek Janssen:
Originally posted by @Mike Bolen:

@Charlie Gomez have you thought of selling the rental you have now and redeploy thoat money into a less expensive investment? If you take a look at the rental calculator here on BP you are probably subsidizing someone’s living expenses with your current rental. As an example if your current place is worth $500,000 and you’re getting less than $5,000 monthly then you’re subsidizing your tenants living expenses. Redeploying the money in a less expensive market should greatly increase your monthly cash flow.

 What you're giving up on cashflow, you may be making up with appreciation.  If you're looking for pure cashflow, you will suffer on appreciation and vice versa.  I prefer a hybrid market for investing.  One that cashflows and appreciates modestly.  

Thanks @Derek Janssen, that makes a lot of sense! Thanks also @Mike Bolen! These two comments have definitely got the wheels turning. Right now my rental is definitely subsidizing my tenants cost of living. For now that is ok for reasons I can't get in to. This definitely adds some perspective to my next purchase. Looking in Austin Tx, suburbs for a cash flow property. Still weighing out saving up as much as I can and buying or buying now. Not sure which is better.

 I have a buddy who is selling 3 rentals in Austin and buying in Jacksonville.

Property taxes are killer in TX. I bought a brand new SFH in Rockwall outside of Dallas and the property taxes were like 2.8%. Also, in that area, they are subject to hail storms which can cause some serious damage. I am investing in Phoenix. I'm able to mitigate the cashflow issue by self managing with the help of my realtor. Good luck.

Originally posted by @Derek Janssen :
Originally posted by @Charlie Gomez:
Originally posted by @Derek Janssen:
Originally posted by @Mike Bolen:

@Charlie Gomez have you thought of selling the rental you have now and redeploy thoat money into a less expensive investment? If you take a look at the rental calculator here on BP you are probably subsidizing someone’s living expenses with your current rental. As an example if your current place is worth $500,000 and you’re getting less than $5,000 monthly then you’re subsidizing your tenants living expenses. Redeploying the money in a less expensive market should greatly increase your monthly cash flow.

 What you're giving up on cashflow, you may be making up with appreciation.  If you're looking for pure cashflow, you will suffer on appreciation and vice versa.  I prefer a hybrid market for investing.  One that cashflows and appreciates modestly.  

Thanks @Derek Janssen, that makes a lot of sense! Thanks also @Mike Bolen! These two comments have definitely got the wheels turning. Right now my rental is definitely subsidizing my tenants cost of living. For now that is ok for reasons I can't get in to. This definitely adds some perspective to my next purchase. Looking in Austin Tx, suburbs for a cash flow property. Still weighing out saving up as much as I can and buying or buying now. Not sure which is better.

 I have a buddy who is selling 3 rentals in Austin and buying in Jacksonville.

Property taxes are killer in TX. I bought a brand new SFH in Rockwall outside of Dallas and the property taxes were like 2.8%. Also, in that area, they are subject to hail storms which can cause some serious damage. I am investing in Phoenix. I'm able to mitigate the cashflow issue by self managing with the help of my realtor. Good luck.

Sources?

Originally posted by @Allan Bishop Jr. :

@Charlie Gomez - Texas is a great location with many different markets. Austin can be expensive but some of the other cities just north of Austin are a little more affordable (Round Rock, Georgetown, etc.). Also, I just moved from the Killeen area which is north of those cities. It's right next to Fort Hood (Army post) which is a large rental market. A lot of investors look there. I've lived in that area three times (my current rental is there). If you have any questions about that market just send me a message. I'd be glad to give you some details and/or answer any questions.

 Hi Allan, is the Fort Hood market oversaturated with investors?

@Erin Elam - No, I wouldn’t say so. There is a variety of different property types, a sufficient inventory of units, and a constant influx of renters. Those who run into issues are typically non-investors who want to sell, can’t because they don’t have enough equity, and are then forced into renting out their property for a price that pays their mortgage but is above the going rental rate. As long as your math is solid you should be able to find a property regardless of what you’re looking for.

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