First Time Investor - Out Of State - Need guidance

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First Time Investor - Out Of State - Need guidance

Murali Jesudoss
New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes

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.

:-)

2Reply
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Most Popular Reply

Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
5y
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

[email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
Reafco512 Reviews
WebsiteView Page
4Reply
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  • Jack SmithPro Member
    Rental Property Investor · Massillon, OH · Member since 2017 · 215 posts · 168 votes
    5y

    Our local REIA is starting a focus group in January directed specifically to out of state investors looking to learn more about the Canton area. You may want to join us, non Ohio REIA members must pay the $5 fee.

    https://www.investinstark.com/... 

    3Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y

    @Jack Smith Thanks for the info. I will review and check this.

    1Reply
  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    5y

    @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.

    2Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    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

    [email protected]614-963-3340
    3Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y

    Interesting.. Let me review these cities as well tonight. @Mike D'Arrigo

    1Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y

    Thanks. I have sent a connect request. We can connect and explore OH as well ;-) @Brandon Goldsmith 
    1Reply
  • Preston Donahue
    Real Estate Agent · Canton, OH · Member since 2017 · 42 posts · 23 votes
    5y

    @Murali Jesudoss Check into Canton, Ohio while you're looking. It's where I'm at and homes are very reasonable. Lots of opportunity.

    2Reply
  • Robert Calabro
    Rental Property Investor · Columbus, OH · Member since 2018 · 42 posts · 29 votes
    5y

    @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!

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    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

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    4Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    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. 

    1Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    5y
    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.

    1Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y

    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.. 

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    5y

    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.

    2Reply
  • Account Closed
    Member since 2020 · 10 posts · 8 votes
    5y

    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.

    2Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y

    Have anyone explored Sauk Village near Chicago? Received some referrals there and would be interested to know what the community thinks about it?

    0Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y

    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. 

    0Reply
  • Mark AinleyBusiness Member
    Property Manager · Roselle, IL (Chicago Suburb) · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    @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.  

    [email protected]630-781-6744Podcast Guest on Show #72
    GC Realty & Development LLC4.61078 Reviews
    WebsiteView Page
    1Reply
  • Andrew Weiner
    Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
    5y

    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:

    3Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y

    Thanks for the info. Makes sense :-) @Andrew Weiner

    0Reply
  • Murali Jesudoss
    OP
    New to Real Estate · Reno, NV · Member since 2020 · 58 posts · 34 votes
    5y
    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..

    0Reply
  • Ozzy SmithPro Member
    Specialist · Dayton, OH · Member since 2014 · 352 posts · 265 votes
    5y
    @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
    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    5y

    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

    312-681-7487
    1Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Account Closed:

    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. 

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Account Closed:

    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.

     I second Columbus, Ohio. You cannot beat the projected demographics. 

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    1Reply
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