@Brandon Roberts - between us and our investors (many of whom are from California), we're now 450 doors deep in Indy. Yes, there's plenty of cash flow.
@Will Triplett thanks. Do you travel to see your turnkeys in person? If you have multiple do you stick in the same area/same company? Is there a REI group here?
I only have one and didn’t travel to see it. They welcome visits if you would like. They are very forthcoming and upfront on the transaction, fees, and management. They will provide any information you want on the property and the community. You should do your own financial analysis and only use there numbers where they make sense; for example I had no problem using their estimate for property taxes, but didn’t take their rates of return at face value. After all they are salesmen trying to sell you a property.
There is an REI group here. Just look it up on Meetup.
If you're looking for residential (1-4 units) out of state, you're 2 biggest options are:
1 - Turnkey
2 - DIY BRRRR
Turnkeys are much more straightforward than BRRRR. The potential returns for BRRRR are much higher and people use this strategy to grow their portfolio quickly. Turnkey is a much slower wealth building process, but can be a decent cash flowing machine. Both require DD, but BRRRR will require significantly more capital, risk, and time commitment. If you're looking for something more hands on do BRRRR, if not then turnkey. Keep in mind you will be paying market price for turnkey because the sweat equity is captured by the seller. In BRRRR, you capture the equity yourself. There are pros and cons to both and are meant for different types of investors. I invest in turnkeys so if you need some help there hit me up. Good luck!
No turnkey, my units actually off MLS and have helped others with off market stuff.
KC is competitive, not only with investors but home buyers as well. Lot of the good deals will be because you have a better understanding of the rent values or can repair/remodel cheaper then other people.
If you can't do either it'll be tough and lot of deals will never pencil out.
@Ali Boone thanks. I’ve read some of your stuff. How many turnkey companies do you work with or refer?
It changes all the time. There seems to be a common cycle with turnkey providers--they start out great, and then they start to suck at some point. Usually due to too much growth that they don't manage well. Or if it's not the provider themselves, the markets change too. A market can be great, then all of a sudden no cash flow. Feel free to message anytime and I'm happy to answer questions or give current info, etc.
@Brandon Roberts - between us and our investors (many of whom are from California), we're now 450 doors deep in Indy. Yes, there's plenty of cash flow.
@Brandon Roberts - between us and our investors (many of whom are from California), we're now 450 doors deep in Indy. Yes, there's plenty of cash flow.
Is there anyone in San Luis Obispo that can discuss Out of State Investing? There is no where near me that I can get cash flow positive!
Welcome to the site Brandon. I'd imagine you'll end up targeting the Midwest as that is where the majority of folks in your situation end up investing. Below are some best practices to keep your risk as low as possible when you are deploying your capital.
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.
@Jonathan Oh They are the big options, but they're not the only options! I see a ton of investors hit sweet spots in between. Properties that haven't been flipped, but that are still in good shape. these properties by far make the most sense here right now. Solid 8% cap rates dont' lie!
@Brandon Roberts I'm in a super stable market (OKC) so I'm sadly not nearby. Most of the investors I know are from the Bay area and LA.
@Jonathan Oh honestly most of what I've seen doesn't really NEED the rehab. You could get it a facelift, but it won't really impact ROI. You'll raise what you get back, but also what you put in. If it's already cash flowing and hitting a good cap, not much need to do any!