Rental Property Investor · Foster City, CA · Member since 2019 · 24 posts · 35 votes
My husband and I purchased our first investment property in 2011 in Fairfield, CA. We bought a single family house for $169,100. It is now worth ~$400,000. We are renting for $1,795 and bring in about $200 cash flow each month.
We put our investing on hold while our three kids started applying for college. Our oldest just graduated in June and our twins are juniors.
During our annual new year's eve yearly planning, we decided the time is right to get back into investing. We are looking at small MF properties. We are researching where to focus our investments. We have been looking at approximately 20 metro areas with solid job and population growth. Now we just have to narrow it down the right location. :)
Any recommendations would be appreciated. Looking forward to discussing and learning from all of you.
Congrats on your BIG win on your first investment property. I would suggest looking into your cash on cash return at this point as a $200 a month cash flow while sitting on nearly 220k+ of equity would be (in my opinion) not the best use of your equity position.
Now everybody situation is different but I think you can utilize a HELOC to pull at your equity to get into another investment vehicle rather than using the cash on hand. First comes a PLAN, then ACTION!
Real Estate Agent · Columbus, OH · Member since 2016 · 593 posts · 664 votes
6y
Hi Anne,
You should look into Columbus OH!
We're seeing a lot of primary markets like LA and NY look into our secondary market.
You can hit the 1% rule here and see handsome cashflows.
Columbus is seeing both great numbers for job and population growth. And maybe even a further differentiating factor is Ohio State University. OSU has the 4th most undergraduates in the nation and helps our great city grow with young college-educated individuals... looking to rent!
If you want to discuss more would be happy to hop on a phone call with you.
Rental Property Investor · Fremont, CA · Member since 2017 · 125 posts · 75 votes
6y
Your main drivers will be population growth with a diversified job market that's growing along. Places like Austin, Dallas Fort-Worth, Indianapolis, etc. are all areas to consider.
Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
6y
@Kalen Jordan The 1% rule doesn’t work as a metric in the Austin market as the appreciation is too strong. Most zip codes in the area went up 8-14% in 2019. You also can’t buy turn key here. Investors should know Austin is a great market, yet will take some patience and creativity to land the right deal.
Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
6y
I'm not sure if OKC is on your list or not, but if so then it's worth noting that the market here favors SFH rentals for the most part. You can hit at least 1% all day with a C class rental on the SFH side, but the multifamily space is a much more competitive.
The inventory is extremely limited on multifamily properties, so if something comes up on the MLS that will hit the 1% rule it's usually gone within a few hours. ESPECIALLY if it can be sold to an owner occupant.
Best of luck on choosing your market! There are a lot of great markets that make a lot of sense for out of state investing. You just have to find one that is the best fit for you. :)
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
6y
@Tim Siocheng There are not too many turn key companies here in Columbus, Ohio due to our high appreciation. A lot of OOS investors have had success working with a Realtor to take down properties that require little to no rehab and hiring a management company.
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
6y
@Anne Marie Kodama If you're goal is cash flow, I would highly recommend Indianapolis and Kansas City. However, if you want MF, I would stick with KC over Indy. Most of the MF in Indianapolis is in old, rough neighborhoods that don't perform well. Like any market, both Indy and KC have good areas and bad so make sure you know the neighborhoods well and understand the class of properties in the neighborhoods.
Rental Property Investor · Foster City, CA · Member since 2019 · 24 posts · 35 votes
6y
@Mike D'Arrigo I have looked at both Indy and KC. However, I am going to focus on Columbus for now as it seems to check off the items on my list. I am sure I will be expanding into other markets in the future.
@Mike D'Arrigo I have looked at both Indy and KC. However, I am going to focus on Columbus for now as it seems to check off the items on my list. I am sure I will be expanding into other markets in the future.
Anne Marie, Columbus is a good market too--strong economic and demographic fundamentals.
San Ramon, CA · Member since 2017 · 78 posts · 97 votes
6y
@Anne Marie Kodama if focusing on Columbus drop me a line and happy to grab a coffee and exchange some notes. I am Bay Area based with a growing portfolio in Columbus has been a great market for us.
Investor · New York, NY · Member since 2015 · 26 posts · 12 votes
6y
@Zeke Liston, @Austin Steed, @Remington Lyman, how does the eviction process work in OH (i.e., landlord or tenant friendly)? What do you see at as the political risks? I saw that Cleveland just passed a bill giving tenant's the right to an attorney during eviction proceedings.
Real Estate Broker · Columbus, OH · Member since 2019 · 119 posts · 151 votes
6y
@Horton M. Columbus is still very landlord-friendly when it comes to evictions. There have been small movements to shift this but we haven't seen the ball move much. Even if tenants are given more leniency, I still see Columbus continuing to be a very favorable market for landlords.