First Time Investor - Out Of State - Need guidance

25 Replies

Hello BPers,

Newbie here ;-) Lot of info and research to be done here.. I have been studying lot of articles and forums to choose my first rental investment.. Not to mention watching all the success stories and podcast videos.. Thanks for the great community and people in here..

I know there are lot of topics on this already and gone through ton of them.. But wanted to reach out for specific guidance for my situation..

I am in Reno, NV a great rental area for sure, but the market is way too pricey to get even the .5% not even close for 1-2% rule.. I explored house hacks, but the units won't yield rent as expected, due to the prices are in millions for MFH and the Duplexes are easily 500-700k..

Only option I am seriously considering is a condo for about $120k(1B 1B) or so which can rent up to $1k. With HOA being close to $200, the net would be close to $100-$150 considering some % for vacancy and repairs. I don't see an option for SFH or BRRRR here..

Having said that, I am still trying to do an OOS investment in OH/AL and doing lot of research as the prices are reasonable and reasonably less risk.

Goals: Long term hold, Rental income as alternate for long term, Why keep money sitting in the bank yielding nothing.

Have a decent paying IT job with ready to put down down payment for 3-4 properties. Own a SFH in Reno (have $100k equity for HELOC, if required). Willing to take risks, but I not easy to give up.

Considering OOS, looking for good low priced turn key properties that can yield above 1% rule cash-flow.

I am looking for some kind of recommendations on the areas as Youngstown sounds really interesting, but some people mention that the areas are really bad. The crime report online shows red zone for whole Youngstown and not sure if there are good neighborhoods that can be considered.

When I looked at Columbus, not of good options for Turn-key (either way too priced or not good). Looked at Cleveland but need some more research as there are lot of red zone too.

I don't see much opportunities in AL Bur/Huntsville/Madison does not look like 1% but might be rookie mistake.

What do you guys recommend for my situation? Youngstown/Dayton/Toledo/Cleveland? Or AL (prop tax seems less which might benefit in long run)?

Most importantly, willing to consider the BRRRR, if I get some good referrals for realtor and can connect with people and explore more.

:-)


@Murali Jesudoss the most important things to look for in a potential market are markets with growing populations, growing jobs, modern, diverse economies with low property taxes and insurance rates. Indianapolis and Kansas City should definitely be on your short list.

Ohio is a great place to look for out of state investing. Columbus does have a higher entry point than the rest of the cities but that is warranted in the fact that it is seeing high levels of appreciation, a diverse job field, and a growing population. Either way, I am sure you will find a city that matches your cash flow goals. @Murali Jesudoss

@Murali Jesudoss

I agree with some of the above. Columbus is definitely seeing a lot more appreciation, but is also worthy exploring your options. You’ll find more foreclosures and lower price points in other cities like Dayton, Cincinnati, Cleveland, Toledo. That being said, it’s possible to find cash flowing properties here, especially if you do the research and know your options. Best of luck!

Originally posted by @Murali Jesudoss :

Hello BPers,

Newbie here ;-) Lot of info and research to be done here.. I have been studying lot of articles and forums to choose my first rental investment.. Not to mention watching all the success stories and podcast videos.. Thanks for the great community and people in here..

I know there are lot of topics on this already and gone through ton of them.. But wanted to reach out for specific guidance for my situation..

I am in Reno, NV a great rental area for sure, but the market is way too pricey to get even the .5% not even close for 1-2% rule.. I explored house hacks, but the units won't yield rent as expected, due to the prices are in millions for MFH and the Duplexes are easily 500-700k..

Only option I am seriously considering is a condo for about $120k(1B 1B) or so which can rent up to $1k. With HOA being close to $200, the net would be close to $100-$150 considering some % for vacancy and repairs. I don't see an option for SFH or BRRRR here..

Having said that, I am still trying to do an OOS investment in OH/AL and doing lot of research as the prices are reasonable and reasonably less risk.

Goals: Long term hold, Rental income as alternate for long term, Why keep money sitting in the bank yielding nothing.

Have a decent paying IT job with ready to put down down payment for 3-4 properties. Own a SFH in Reno (have $100k equity for HELOC, if required). Willing to take risks, but I not easy to give up.

Considering OOS, looking for good low priced turn key properties that can yield above 1% rule cash-flow.

I am looking for some kind of recommendations on the areas as Youngstown sounds really interesting, but some people mention that the areas are really bad. The crime report online shows red zone for whole Youngstown and not sure if there are good neighborhoods that can be considered.

When I looked at Columbus, not of good options for Turn-key (either way too priced or not good). Looked at Cleveland but need some more research as there are lot of red zone too.

I don't see much opportunities in AL Bur/Huntsville/Madison does not look like 1% but might be rookie mistake.

What do you guys recommend for my situation? Youngstown/Dayton/Toledo/Cleveland? Or AL (prop tax seems less which might benefit in long run)?

Most importantly, willing to consider the BRRRR, if I get some good referrals for realtor and can connect with people and explore more.

:-)

It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s strategy for long-distance and made up of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to confidently invest in any market.
As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio.


Check out this post - https://www.biggerpockets.com/blog/core-four-real-estate-team

Originally posted by @Murali Jesudoss :

Hello BPers,

Newbie here ;-) Lot of info and research to be done here.. I have been studying lot of articles and forums to choose my first rental investment.. Not to mention watching all the success stories and podcast videos.. Thanks for the great community and people in here..

I know there are lot of topics on this already and gone through ton of them.. But wanted to reach out for specific guidance for my situation..

I am in Reno, NV a great rental area for sure, but the market is way too pricey to get even the .5% not even close for 1-2% rule.. I explored house hacks, but the units won't yield rent as expected, due to the prices are in millions for MFH and the Duplexes are easily 500-700k..

Only option I am seriously considering is a condo for about $120k(1B 1B) or so which can rent up to $1k. With HOA being close to $200, the net would be close to $100-$150 considering some % for vacancy and repairs. I don't see an option for SFH or BRRRR here..

Having said that, I am still trying to do an OOS investment in OH/AL and doing lot of research as the prices are reasonable and reasonably less risk.

Goals: Long term hold, Rental income as alternate for long term, Why keep money sitting in the bank yielding nothing.

Have a decent paying IT job with ready to put down down payment for 3-4 properties. Own a SFH in Reno (have $100k equity for HELOC, if required). Willing to take risks, but I not easy to give up.

Considering OOS, looking for good low priced turn key properties that can yield above 1% rule cash-flow.

I am looking for some kind of recommendations on the areas as Youngstown sounds really interesting, but some people mention that the areas are really bad. The crime report online shows red zone for whole Youngstown and not sure if there are good neighborhoods that can be considered.

When I looked at Columbus, not of good options for Turn-key (either way too priced or not good). Looked at Cleveland but need some more research as there are lot of red zone too.

I don't see much opportunities in AL Bur/Huntsville/Madison does not look like 1% but might be rookie mistake.

What do you guys recommend for my situation? Youngstown/Dayton/Toledo/Cleveland? Or AL (prop tax seems less which might benefit in long run)?

Most importantly, willing to consider the BRRRR, if I get some good referrals for realtor and can connect with people and explore more.

:-)

Hi Murali, I would agree with the above comments that Columbus, OH would be a good OOS market to look into. The population and economic growth is through the roof - which is appreciating the whole city. There are still plenty of deals to be made in Columbus but I would agree you'll have a much easier time finding something in Cleveland or Youngstown. 

 

Originally posted by @Murali Jesudoss :

Hello BPers,

Newbie here ;-) Lot of info and research to be done here.. I have been studying lot of articles and forums to choose my first rental investment.. Not to mention watching all the success stories and podcast videos.. Thanks for the great community and people in here..

I know there are lot of topics on this already and gone through ton of them.. But wanted to reach out for specific guidance for my situation..

I am in Reno, NV a great rental area for sure, but the market is way too pricey to get even the .5% not even close for 1-2% rule.. I explored house hacks, but the units won't yield rent as expected, due to the prices are in millions for MFH and the Duplexes are easily 500-700k..

Only option I am seriously considering is a condo for about $120k(1B 1B) or so which can rent up to $1k. With HOA being close to $200, the net would be close to $100-$150 considering some % for vacancy and repairs. I don't see an option for SFH or BRRRR here..

Having said that, I am still trying to do an OOS investment in OH/AL and doing lot of research as the prices are reasonable and reasonably less risk.

Goals: Long term hold, Rental income as alternate for long term, Why keep money sitting in the bank yielding nothing.

Have a decent paying IT job with ready to put down down payment for 3-4 properties. Own a SFH in Reno (have $100k equity for HELOC, if required). Willing to take risks, but I not easy to give up.

Considering OOS, looking for good low priced turn key properties that can yield above 1% rule cash-flow.

I am looking for some kind of recommendations on the areas as Youngstown sounds really interesting, but some people mention that the areas are really bad. The crime report online shows red zone for whole Youngstown and not sure if there are good neighborhoods that can be considered.

When I looked at Columbus, not of good options for Turn-key (either way too priced or not good). Looked at Cleveland but need some more research as there are lot of red zone too.

I don't see much opportunities in AL Bur/Huntsville/Madison does not look like 1% but might be rookie mistake.

What do you guys recommend for my situation? Youngstown/Dayton/Toledo/Cleveland? Or AL (prop tax seems less which might benefit in long run)?

Most importantly, willing to consider the BRRRR, if I get some good referrals for realtor and can connect with people and explore more.

:-)

Columbus is an awesome market! I am born and raised, and know the local market like the back of my hand! Over the past 5 years I have seen industry & population growth in Columbus explode, and effectively it has raised our housing prices.

I started investing in Columbus OH about 3 years ago, with an FHA loan. I bought a duplex on campus while I was in school fixed it up enough to rent and eventually complete a BRRRR. If I could do that while in school, anyone can do that, even OOS.

 

Thanks all for your suggestions. I have been doing lot of research last night on the Columbus, Toledo, Dayton and Cleveland. While Dayton/Toledo does present attracting price ranges but I could not get a feeling for the rental market there. Most listings I saw were vacant and was bit worried.. Cleveland does have good options too and having James's guide helped to avoid the red zones.. After spending lot of time on Columbus I did feel that it offers good deals for duplexes. I am going to connect with some experts here and try to build the team first.. Thanks again all..

The issue I feel with Youngstown/Boardman might be finding the good team there.. Some good deals on 4-plexes but not sure about the PM team that can handle it for OOS. Hopefully can find referrals.. 

What do you guys recommend for my situation? Youngstown/Dayton/Toledo/Cleveland? Or AL (prop tax seems less which might benefit in long run)?

Either works. Just make sure you work with proven operators.

Also, might be another rookie question.. I understand markets like Bay area/Reno makes sense for lot of people to rent than buy homes due to the inflated prices. However, what does so many people in OH/AL all these new trending markets to motivates people to rent for $700-$1000, where they can easily buy a home for $50k or so with $300 or so payment per month. 

@Murali Jesudoss If you are looking at Chicago market there are better options then Sauk Village.  Happy to give you the run down and best resources for info on Sauk and Chicago market in 20 minutes if you ever want to jump on a call.  

There are a many reasons that people stay renters, in many cases for life. Many people do not have even basic financial education, they live pay check to paycheck and saving up even a few thousand dollars for an FHA loan is beyond their abilities. Other reasons include need for flexibility, believe that they end up spending less long term due to maintenance, they don't want to deal with maintenance, moving into a better school district that they can't get afford a down payment in, and the list goes on.

As to your question about 50K houses in a market like Cleveland, you can find them on the MLS but they are not the kind of property or in the neighborhoods that most owner occupants want to live in.

   Originally posted by @Murali Jesudoss :

Also, might be another rookie question.. I understand markets like Bay area/Reno makes sense for lot of people to rent than buy homes due to the inflated prices. However, what does so many people in OH/AL all these new trending markets to motivates people to rent for $700-$1000, where they can easily buy a home for $50k or so with $300 or so payment per month. 

Originally posted by @Mark Ainley :

@Murali Jesudoss If you are looking at Chicago market there are better options then Sauk Village.  Happy to give you the run down and best resources for info on Sauk and Chicago market in 20 minutes if you ever want to jump on a call.  

Thanks Mark. I will let you know. Will connect..

 

@Murali I live and invest in Dayton as well as own a construction company. I have worked with many OOS investors and would be happy to help any way that I can. If you ever want to know about Dayton drop me a line

While I'm biased toward Illinois here's a reprint of an article from Roofstock on the 20 best States to Purchase Rentals. Roofstock is one of the largest purchasers of homes in the country. Granted 20 states cover almost half the country, but maybe you'll get some ideas from the cities identified in the top 10 states. This is Roofstocks' opinion:  Roofstock Report

Originally posted by @Rickie Camarato :

We have the same strategy. I live in San Diego. However I am leaning more to the BRRRR strategy. I haven't invested yet and I'm trying to figure out what market I want to invest in.

 Hi Rickie, Columbus, OH would be a good market to invest in.