New investor from San Diego looking for Midwest B&H opportunities

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I'm a long-time BP reader and podcast listener looking to purchase my first property. Markets such as Indianapolis, Kansas City, and Oklahoma City currently peak my interest, however I'm fairly market agnostic as long as the numbers/risk factors make sense. I believe finding the right team is the first step and will help narrow this down quite a bit.

I'm primarily interested in 3/2 SFRs in B/B+ neighborhoods and value a low-risk tenant base and good neighborhoods over super high cash-on-cash returns. My upfront all-in cash budget is $25K-35k and I plan to finance the rest. While I'm very open to turnkey providers, I feel I can be just as successful out-of-state with a solid agent and a reputable PM company.

I look forward to connecting with many of you and am very open to suggestions, guidance, and shared experiences.

I have experience in Kansas City if you need any referrals / recommendations.  

Hey, @David Squiller - a good PM will help point you in the right direction locally once you have the MSA picked out.  When considering location, I would keep the big picture in mind and look for areas that you can see yourself scaling in, opposed to just a one off transaction.  Best of luck!    

I'm located in Indy, I have multiple resources to help you get going. Are you looking to flip or hold ? Feel free to message me. 

Originally posted by @David Squiller :

I'm a long-time BP reader and podcast listener looking to purchase my first property. Markets such as Indianapolis, Kansas City, and Oklahoma City currently peak my interest, however I'm fairly market agnostic as long as the numbers/risk factors make sense. I believe finding the right team is the first step and will help narrow this down quite a bit.

I'm primarily interested in 3/2 SFRs in B/B+ neighborhoods and value a low-risk tenant base and good neighborhoods over super high cash-on-cash returns. My upfront all-in cash budget is $25K-35k and I plan to finance the rest. While I'm very open to turnkey providers, I feel I can be just as successful out-of-state with a solid agent and a reputable PM company.

I look forward to connecting with many of you and am very open to suggestions, guidance, and shared experiences.

Welcome to the site Dave. There are tons of turnkey markets out there that you can choose from. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

  • Cleveland, Ohio
  • Dayton, Ohio
  • Toledo, Ohio
  • Youngstown, Ohio
  • Cincinnati, Ohio
  • Memphis, Tennessee
  • Birmingham, Alabama
  • Kansas City, Missouri
  • Saint Louis, Missouri
  • Indianapolis, Indiana
  • Detroit, Michigan
  • Erie, Pennsylvania
  • Louisville, Kentucky
  • Milwaukee, Wisconsin
  • Jackson, Mississippi

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.
Originally posted by @James Wise :
Originally posted by @David Squiller:

I'm a long-time BP reader and podcast listener looking to purchase my first property. Markets such as Indianapolis, Kansas City, and Oklahoma City currently peak my interest, however I'm fairly market agnostic as long as the numbers/risk factors make sense. I believe finding the right team is the first step and will help narrow this down quite a bit.

I'm primarily interested in 3/2 SFRs in B/B+ neighborhoods and value a low-risk tenant base and good neighborhoods over super high cash-on-cash returns. My upfront all-in cash budget is $25K-35k and I plan to finance the rest. While I'm very open to turnkey providers, I feel I can be just as successful out-of-state with a solid agent and a reputable PM company.

I look forward to connecting with many of you and am very open to suggestions, guidance, and shared experiences.

Welcome to the site Dave. There are tons of turnkey markets out there that you can choose from. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

  • Cleveland, Ohio
  • Dayton, Ohio
  • Toledo, Ohio
  • Youngstown, Ohio
  • Cincinnati, Ohio
  • Memphis, Tennessee
  • Birmingham, Alabama
  • Kansas City, Missouri
  • Saint Louis, Missouri
  • Indianapolis, Indiana
  • Detroit, Michigan
  • Erie, Pennsylvania
  • Louisville, Kentucky
  • Milwaukee, Wisconsin
  • Jackson, Mississippi

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.



Jim you may want to add Huntsville to this list.

 

Hello David, 

Welcome to BiggerPockets. If you haven't read David Greene's book on Out of State Real Estate Investing, maybe you should give it a try. Best of luck on your endeavors.

Sincerely,

I have heard good things about all of those markets, but I only know Indianapolis...been working this market with investors like you for over 17 years. Would love to know more about your criteria to see if we can help. I can connect you with local lenders and property managers (we stopped providing PM a few years ago) as well.
Also James Wise is correct...you can make or lose money in any market depending on the specific property and the property manager.

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