Investing in Oklahoma City

21 Replies | Oklahoma City, Oklahoma

Hello seasoned OKC investors. I've been researching investing out of state in OKC and after reading tons of forum posts on the city I came up with some questions just to give me a better picture. Would also love to link up with investor friendly real estate agents so I can hopefully start out this investing journey. Would probably need recommendations on lenders too.

Thank you soooo much and I appreciate the feedback.

    1. 1. I've been running numbers on 3-bedroom houses. Any advantage to purchasing 2/4 bedroom? Does a higher number of bathrooms give me an edge in getting tenants.
    2. 2. Are condos a popular investment choice?
    3. 3. In my purchase price range of 120-140k I see the rental price being around $800-900. Are the $1000K per month rental homes harder to rent? Trying to decide if bumping my purchase price to get higher rents is a good decision.
    4. 4. For a newbie, what level of repairs (5k vs 10 vs 20k etc etc) should I shoot for especially being that I'm out of state? My thoughts are it should be kept low as I start out?
    5. 5. Looks like in OKC tenants cover ALL utilities - except taxes? Some rentals don't have appliances?
    6. 6. Some properties for sale are renovated and taxes are a low number. I'm suspecting taxes would go up after a re-assessment?
    7. 7. I'm thinking as a first out of state rental having a PM would be a good choice, correct?

    @Ray Tapay Hi I’m a realtor and investor in Tulsa. Similar environment here in Tulsa, but not as popular as Okc. If you’re interested in exploring the Tulsa market, I’m happy to connect and jump on a call

    Originally posted by @Ray Tapay :

    Hello seasoned OKC investors. I've been researching investing out of state in OKC and after reading tons of forum posts on the city I came up with some questions just to give me a better picture. Would also love to link up with investor friendly real estate agents so I can hopefully start out this investing journey. Would probably need recommendations on lenders too.

    Thank you soooo much and I appreciate the feedback.

      1. 1. I've been running numbers on 3-bedroom houses. Any advantage to purchasing 2/4 bedroom? Does a higher number of bathrooms give me an edge in getting tenants.
      2. 2. Are condos a popular investment choice?
      3. 3. In my purchase price range of 120-140k I see the rental price being around $800-900. Are the $1000K per month rental homes harder to rent? Trying to decide if bumping my purchase price to get higher rents is a good decision.
      4. 4. For a newbie, what level of repairs (5k vs 10 vs 20k etc etc) should I shoot for especially being that I'm out of state? My thoughts are it should be kept low as I start out?
      5. 5. Looks like in OKC tenants cover ALL utilities - except taxes? Some rentals don't have appliances?
      6. 6. Some properties for sale are renovated and taxes are a low number. I'm suspecting taxes would go up after a re-assessment?
      7. 7. I'm thinking as a first out of state rental having a PM would be a good choice, correct?

       Hey Hey @Ray Tapay!  

      1. I've been running numbers on 3-bedroom houses. Any advantage to purchasing 2/4 bedroom? Does a higher number of bathrooms give me an edge in getting tenants.

      --> Nope, no real advantages for your standard rental.  IF you are going to do something niche (like target Oakdale school-age family renters, Executive rentals, or Section 8 rentals having a 4th bed isn't likely to push your rent value up much over a 3 bed and most of the time adding a 4th bedroom into the space of a natural 3 bedroom home doesn't help your value at all.

      2. Are condos a popular investment choice?

      --> No they are not.  They exist and are available here, but it is an inefficient ownership structure for a market with such low real estate values already.

      3. In my purchase price range of 120-140k I see the rental price being around $800-900. Are the $1000K per month rental homes harder to rent? Trying to decide if bumping my purchase price to get higher rents is a good decision.

      --> It totally depends on the product.  If you are rocking a spiffy, clean, and trendy $1,000 (or even $1,250) per month rental it can fly off the shelves.  If you have a mediocre $1,000 product then it can take a LOT of time to move.  So, I'd stay out of the "middle" and hit whatever price-point you decide to focus and go for a focuses niche within that niche.

      4. For a newbie, what level of repairs (5k vs 10 vs 20k etc etc) should I shoot for especially being that I'm out of state? My thoughts are it should be kept low as I start out?
      -->The more cosmetic the better for ALL experience levels ironically. 

      5. Looks like in OKC tenants cover ALL utilities - except taxes? Some rentals don't have appliances?

      --> Yep, most of the time that's true. Nobody pays your taxes directly for you, fortunately the rents cover those and then some :) 

      6. Some properties for sale are renovated and taxes are a low number. I'm suspecting taxes would go up after a re-assessment?

      --> Yessir you are correct.  The county is getting better and better at strategic reassessments these days and you can expect your taxes to be at the 1.12% level or thereabouts in short order after a purchase.

      7. I'm thinking as a first out of state rental having a PM would be a good choice, correct?

      --> it's possible to self-manage OOS, but by no means is self-management your only choice.  If you go the pro route I'd be honored to serve, otherwise self-management can be a strategic choice when you have the right locals on your team!

        Maybe it’s all relative, but OKC is super competitive right now. I’m actually looking at Tulsa, Enid and Lawton as price points seem more favorable. So far it’s just looking as I like to do some of my own rehab work, but my next purchase may come in one of those. 

        If you do go OKC, I can put you in touch with a top notch PM. 

        3. You need to hunt harder. Those sound like MLS prices. I've bought two this year that should rent slightly over 1% PP+repairs. Both 100-110kish and should rent for 1100 and 1200.

        5.  Typically tenants pay everything excluding taxes, yes.  Taxes typically run ~1% of value.  Tenants pay for mowing.  There is no snow plowing or driveway clearing here.  Appliances:  I’d say 40% of the market provides fridges (I do) and 20% offer washers and dryers (I don’t).  Refrigerators and be a tricky fit in older homes.  I have 2 that require 33” wide fridges.  

        6.  Addressed above. 

        7.  I can recommend a great one. 


        Originally posted by @Ray Tapay :

        Hello seasoned OKC investors. I've been researching investing out of state in OKC and after reading tons of forum posts on the city I came up with some questions just to give me a better picture. Would also love to link up with investor friendly real estate agents so I can hopefully start out this investing journey. Would probably need recommendations on lenders too.

        Thank you soooo much and I appreciate the feedback.

          1. 1. I've been running numbers on 3-bedroom houses. Any advantage to purchasing 2/4 bedroom? Does a higher number of bathrooms give me an edge in getting tenants.
          2. 2. Are condos a popular investment choice?
          3. 3. In my purchase price range of 120-140k I see the rental price being around $800-900. Are the $1000K per month rental homes harder to rent? Trying to decide if bumping my purchase price to get higher rents is a good decision.
          4. 4. For a newbie, what level of repairs (5k vs 10 vs 20k etc etc) should I shoot for especially being that I'm out of state? My thoughts are it should be kept low as I start out?
          5. 5. Looks like in OKC tenants cover ALL utilities - except taxes? Some rentals don't have appliances?
          6. 6. Some properties for sale are renovated and taxes are a low number. I'm suspecting taxes would go up after a re-assessment?
          7. 7. I'm thinking as a first out of state rental having a PM would be a good choice, correct?

          I think @Will Fraser did a great job of answering those. When I am looking into rent comps, it's amazing to me how some rentals are so poorly advertised. Bad pictures, limited description, it's like they are wanting it to sit on the market and eventually get rented by sub-par tenants. If you can swing it, doing some minor updating, taking solid pictures, and advertising it WELL should render some good results. that $1,000/month (or $995 if you want to play with the human psyche ;) ) will be highly achievable.

          Forrest Faulconer

          I think @Will Fraser and @Micheal Briscoe both did a great job.  Will really knows his stuff.  I will throw a bit about shcool districts here.  Edmond and Deer creek are top notch in OKC/Edmond but will be really hard at the 120k price point to get into.  Putnam city schools are still solid but definately B class.  Oklahoma City schools will have lower rents and higher turn over.  Moore schools are good.  Midwest city is a good area and Tinker Air Force base is right there (lots of jobs) but Del City can be a little more C/D class and they share a school district.  

          I'll second, third, and fourth Jason's post above!  Especially if you are dealing with school-age children (which amazingly enough is an important factor to a high number or tenants, not just parents of school age children . . . go figure) you can pick your poison on the front end . . . want lower purchase price, higher cashflow (ignoring vacancy and turnover costs), but dealing with more frequent turnovers?  Del City > Midwest City > Okalhoma City>Mustang>Yukon>Edmond&Deer Creek.  The reverse order will tend to be more expensive and lower cashflow per home, but lower vacancy and turnover costs.

          Well said, Jason!

          I agree with pretty much everything that everyone above has discussed but I will throw my two cents out there based on my experiences with investing in OKC.

          @Ray Tapay , it really depends on what you are looking for in your rentals. Are you primarily focused on Cash Flow, Accelerated Appreciation, Gradual Appreciation or (like most) a mixture of two? In the last two years, my wife Paige and I have added 13 single family homes to our portfolio and have helped four others build small portfolios in the OKC metro areas as well. What we've found is that there are many pockets across the city that can check one of those boxes but fewer areas that can check multiple boxes. (For point of reference, the houses we've added using the BRRRR method had an ARV of $115,000 and $260,000 based on their respective appraisals.)

          @Will Fraser hit the nail on the head with his assessment of the various market areas around the metro. We have properties in all but Mustang and Yukon so I won’t speak to those areas directly but here is my very high level take:

          • - Edmond/Deer Creek as @Jason Seay mentions, are top notch but you are looking at potential lower cash flow with gradual appreciation in those areas as well as a higher point of entry. I look at this area as long term holds on properties I want in my portfolio for the foreseeable future. (We have 3 properties here)
          • - Inside OKC city limits is massive geographically and it has pockets where you can find high cash flow in C/D areas (thinking southside to be specific), accelerated appreciation in up-and-coming areas (plaza, paseo, midtown area), gradual appreciation in established areas with decent to good schools (Moore, North OKC, Northwest OKC including Putnam City Schools and several others) and you can find areas where you can check both cash flow and appreciation boxes but it is competitive. I look at the properties we have here as mid - long term holds and will probably look to sell/trade up over the next 5-10 years.(We have 9 properties spread out but have purchased/sold many)
          • - Midwest City has a chance for higher cashflow and a lower price of entry compared to Edmond/Deer Creek and still has decent schools. As Jason said, Tinker AFB is right there so there will always be a demand for rental properties by families stationed there. Appreciation probably depends on the specific neighborhood, but I would imagine there are chances for both accelerated and gradual appreciation. Short - Mid term hold for us 3-5 years (We have 1 property here)
          • - Del City is also close to Tinker AFB but the schools are not as good. Cash flows are potentially higher and there probably wont be too much appreciation outside of forced appreciation through rehab. One thing about Del City that is also different is that they require a city inspection when city utilities switch names. The inspections are not super detailed and the inspectors are good to work with but if there are issues with the house that can be spotted on a walk through, they will make you address before issuing a COA. Because of the inspections there are a lot of abandoned homes which creates an opportunity for some investors. Shorter term holds for us 2-5 years. (We have 2 properties here)
          • - Choctaw, Guthrie, Luther and some of the other outlying areas are towns we’ve invested in and there are definitely opportunities there but they are a little farther out and may be more difficult to find contractors. (We have several properties in these areas including our personal home in Guthrie)

          Sorry, this was long winded but hopefully my high level info is helpful. You started in the right place looking for advice as BP is amazing. Good luck to you on your future investing!

          @Ray Tapayundefined

          @Will Fraserundefined

          @Jason Seayundefined

          I bought a house in deer creek schools 195k 1.5 years ago and sold yesterday 227k.  Would i buy today at 227k? Nope..

          Originally posted by @Ray Tapay :

          Wow! Super, super grateful for all the detailed responses. @Nick O'Connell very good stuff and absolutely loved that it was long winded :)

          @Michael P. Do you think that the jump was due to the current craziness in real estate or this is the norm?

          Definitely current craziness 

          Glad you thought it was helpful @Ray Tapay

          @Michael P. out of curiosity, what was your intent when you purchased the property? I assume it was to buy and hold as you had it for a year and a half but something happened? Always like to hear other's take on areas near me especially from experienced investors.  

          Originally posted by @Nick O'Connell :

          Glad you thought it was helpful @Ray Tapay

          @Michael P. out of curiosity, what was your intent when you purchased the property? I assume it was to buy and hold as you had it for a year and a half but something happened? Always like to hear other's take on areas near me especially from experienced investors.  

          I invest in B/C class in O.Hio and intended to diversify into A class but it was too boring for me C class is more entertaining.

           

          Originally posted by @Ray Tapay :

          @Michael P. Sorry to ask such a newbie question. When you say it wasn't as entertaining, do you literally mean that there was no drama with the tenants or too boring in terms of returns?

          Returns were to low.  It was extremely easy to manage though.

           

          Does it make sense to buy my first primary home using an llc in Oklahoma? How difficult is it to set up and what are the benefits? I’m looking to be a buy and hold investor. Also, will it make buying more properties in the future harder?