New and need advice about out of state rentals
Freeport, NY · Member since 2017 · 5 posts · 1 vote
Hi there-
I am interested to become a landlord. Has anyone considered properties outside of your state? I am in NY and rentals here are insane but also very expensive to get into. I am interested in properties in FL, New Orleans, NC. Am I crazy for considering hiring a management company for maintenance and being an off site landlord? I appreciate any and all comments! Thanks
Hi all,
I love this conversation!! I have 86 front doors and rising right now. I invest in a statistically low growth area of NE Ohio. I have 1031 exchanged all my pricey San Diego rental properties from solid "c" class neighborhoods to solid C class neighborhoods in NE Ohio. I live in San Diego and always will!! I currently have $120,000 in tax deferred cash flow and will be selling my last single family rental property here in San Diego in August.
I have lived in San Diego since 1978 and have seen this rerun before. The key for me was to do a calculation of return on equity. When I owned 10 single family, cash flowing an average of $450.00 each door, my ROE or Return on Equity was barely over 3%. That was not acceptable in 2015 and 2016 when debt could be used at such low fixed rates.
Let me say, I am a reading teacher and a P.E. Teacher at a Catholic School and a part time adjunct professor at a small community college here in San Diego. I decided to research and see what affluent, financially free, and wildly successful RE investors have already done for decades upon decades. You know what I found?
These people 1031 exchanged their $60,000 a year cash flow like mine for Multifamily (5 units or more in one complex). I read Multifamily Millions by David Lindahl, I went to Lifestyles Unlimited two day workshop in Houston, I read Loopholes of RE by Garrett Sutton, and I started 1031 exchanging my pricey San Diego single family (10 condos with HOA fees that were clearly out of my control) for a 10 unit in Cleveland Heights, 8 unit in Shaker Heights, 12 unit in Euclid, 12 unit in Painesville, 15 unit in Painesville, 21 unit in Painesville.
Many people look at the area I invested in and ask why? If you study and learn, I am finding apartment complexes that I can raise rents at least $75.00-$150.00 a unit in a 3 to 4 year maximum. All my 86 front doors at this very moment are occupied. I have on eviction coming up and one move-out scheduled end of June.
I do have 7 single family in Euclid too at about $30,000 all in for each single family that I purchased in 2015 that are now worth about $45,000 each. That is a 50% increase in value in a little over a 2 year period. I just sold one that I purchased in 2015 for $33,000 and I sold it for $48,000.
Personally, if I were anyone that has a lot of equity sitting dead and not using that equity and arbitrage like the banks do for more cash flow is setting themselves up for the inevitable. When flippers are out everywhere, it is not too far from the downfall.
I can't talk my wife into selling our personal residence and taking the proceeds tax free to rent where ever we want and invest in more cash flow or store up cash for more opportunities. Bad habits die hard. When everybody says that you have to buy now or you will never be able to afford a house again, I want out. Also, when everybody says the sky is falling and RE will never come back, that is when I want to buy!!
People in NE Ohio felt that way, like RE will never come back when I first started to buy in 2015. Vacancy rate is extraordinarily low on all my complexes and we are increasing NOI dramatically by buying right. Don't overthink it guys!! Ready!! Fire!! Aim!! Paralysis by analysis keeps all your dreams at bay!!
Do you know that 9 out of 10 people I talk to and tell them to read David Lindahl's Multifamily Millions book, listen to LUI podcasts with founder Del Walmsley in Houston and read Loopholes of RE by Garrett Sutton don't do so and then ask me opinions about deals they have found on loopnet. I cringe everytime and ask if they have done what I told them to do. Or, they just ask me for my contacts and proceed to destroy my reputation with the players in my market.
All people want is something for nothing, instantaneous gratification, basically a diseased mentality. Remember the Pareto Principal, 20% that follow proven methods and do it the right way succeed and the other 80% too bad so sad. I believe it is more like 10%. Like I said, 9 out of 10 don't do what I say.
Last, a very successful person that has 15 million in net worth when I was first starting out investing in RE told me, "I never take financial or business advice from somebody that has less than me." John Wittman owner of Protell Communications etc... Based here in San Diego. That's when I figured out my financial planner makes less than I do and I was floundering, deworsifying my funds in various mutual funds etc.... I cashed that stuff in and am now financially free!! I am on my way to $750,000-$1,000,000 in cash flow per year!! If a lowly paid teacher with a combined family gross w2 earned income of $80,000 can do this with a $2000,00 personal residence mortgage in a pricey area of the U.S. can do this, imagine what you could do!!
Three rules.
1. It must cash flow.
2. It can't lose money.
3. No more becoming financially free slowly through 401k, IRA, Pensions, waiting for som imaginary date in the future. I want to live now.
Are you with me? Let's retire financially free before the age of 33? 43? 53? I turn 52 in August. I just started to figure this stuff out at 46 years old.
If any of you reading this are in the San Diego area, I am starting to get together a list of people to network with to create financially free RE Investors one person at a time. Contact me by personal message or look at my profile and give me a call. Even if you are not in the San Diego area contact me. I truly believe that if I help enough people in this world get what they want, I will get way more than I can ever want!!
"If you change the way you look at things, the things you look at change right before your eyes."
Swanny
Also curious about out of state investing if anyone wants to jump in and offer to help I would like to make a call introuduce myself and explain our situation we are looking for rentals in and out of state more than likely. I don't have a single connection out of state but the people posting and you guys on the forums. Thank you Bigger Pockets!
@Rafael Norat I am interested in out of state investing as it seems like the best bang for the buck for cash flow. I am also considering and learning about rent to own to our tenants what are your thoughts?
In Milwaukee a person I know on Bigger Pockets was finding houses for 30k town homes for 20 just amazing prices! Talk about affordability. So that draws my attention.
Hate to be simple about it, but cash flow is just about buying at the right price plain and simple. New Jersey is crazy overpriced (not sure if as much as CA), but you can still find great cash flow deals if you dig enough. I've been in PA for a time now that properties show up much easily for me and my lenders, contractors, etc are all lined up. At some I'll look in NJ, just so dam busy in PA at this point. With that said, finding property management by me is tough. I learned that lesson y first 2 years. So its never an easy equation. Have to just pick ONE and focus on that. Havent done much rent to owns yet, but there are plenty of people and article here. I would definitely have an attorney write up your contracts and include that in your closing costs. Also find credit restore companies to perform an annual check on the tenants to see if they are progressing. Set it up to actually help people as apposed to handing them a bill.
@Rafael Norat thank you for the reply will show that to my realitor tomorrow. What do you mean include that in the closing costs. Include what in the closing costs? Sorry for sounding stupid your reply was great made complete sense.
@Account Closed I am also trying to possibly build a out of state team. Let's connect and maybe help each other! I am thinking possibly Ohio Indiana Milwaukee Tennessee there are a lot of places we can get deals at.
@Mercedes Falber I live in NY too so I know exactly how you feel. I just assumed that I'd never be able to invest in real estate, but decided to invest out-of-state. I have a management company take care of everything and I am an "off site landlord." So no, you are not crazy! It can be done. Just make sure you do your research and due diligence.
@Robin Boyer I too am looking at Milwaukee & Ohio (Cleveland area). Send me a colleague request or just get my info from my profile and send me a text so we can set up a time to talk.
@Rhonda Blue I am getting ready to do a 1031 exchange maybe you can give me some pointers out there on the basketball court! Thank you!
PMed you!
Hi all I live in Ontario so everything is out of state for me infarct out of country. The last 2 years have been a great adventure till i got to where i am now. I could not do it without great on the ground teams and recommend that anyone going out of there area have solid teams on the ground .
Have 2 years worth on notes an what did and did not work that am more then willing to share
Hi all,
I love this conversation!! I have 86 front doors and rising right now. I invest in a statistically low growth area of NE Ohio. I have 1031 exchanged all my pricey San Diego rental properties from solid "c" class neighborhoods to solid C class neighborhoods in NE Ohio. I live in San Diego and always will!! I currently have $120,000 in tax deferred cash flow and will be selling my last single family rental property here in San Diego in August.
I have lived in San Diego since 1978 and have seen this rerun before. The key for me was to do a calculation of return on equity. When I owned 10 single family, cash flowing an average of $450.00 each door, my ROE or Return on Equity was barely over 3%. That was not acceptable in 2015 and 2016 when debt could be used at such low fixed rates.
Let me say, I am a reading teacher and a P.E. Teacher at a Catholic School and a part time adjunct professor at a small community college here in San Diego. I decided to research and see what affluent, financially free, and wildly successful RE investors have already done for decades upon decades. You know what I found?
These people 1031 exchanged their $60,000 a year cash flow like mine for Multifamily (5 units or more in one complex). I read Multifamily Millions by David Lindahl, I went to Lifestyles Unlimited two day workshop in Houston, I read Loopholes of RE by Garrett Sutton, and I started 1031 exchanging my pricey San Diego single family (10 condos with HOA fees that were clearly out of my control) for a 10 unit in Cleveland Heights, 8 unit in Shaker Heights, 12 unit in Euclid, 12 unit in Painesville, 15 unit in Painesville, 21 unit in Painesville.
Many people look at the area I invested in and ask why? If you study and learn, I am finding apartment complexes that I can raise rents at least $75.00-$150.00 a unit in a 3 to 4 year maximum. All my 86 front doors at this very moment are occupied. I have on eviction coming up and one move-out scheduled end of June.
I do have 7 single family in Euclid too at about $30,000 all in for each single family that I purchased in 2015 that are now worth about $45,000 each. That is a 50% increase in value in a little over a 2 year period. I just sold one that I purchased in 2015 for $33,000 and I sold it for $48,000.
Personally, if I were anyone that has a lot of equity sitting dead and not using that equity and arbitrage like the banks do for more cash flow is setting themselves up for the inevitable. When flippers are out everywhere, it is not too far from the downfall.
I can't talk my wife into selling our personal residence and taking the proceeds tax free to rent where ever we want and invest in more cash flow or store up cash for more opportunities. Bad habits die hard. When everybody says that you have to buy now or you will never be able to afford a house again, I want out. Also, when everybody says the sky is falling and RE will never come back, that is when I want to buy!!
People in NE Ohio felt that way, like RE will never come back when I first started to buy in 2015. Vacancy rate is extraordinarily low on all my complexes and we are increasing NOI dramatically by buying right. Don't overthink it guys!! Ready!! Fire!! Aim!! Paralysis by analysis keeps all your dreams at bay!!
Do you know that 9 out of 10 people I talk to and tell them to read David Lindahl's Multifamily Millions book, listen to LUI podcasts with founder Del Walmsley in Houston and read Loopholes of RE by Garrett Sutton don't do so and then ask me opinions about deals they have found on loopnet. I cringe everytime and ask if they have done what I told them to do. Or, they just ask me for my contacts and proceed to destroy my reputation with the players in my market.
All people want is something for nothing, instantaneous gratification, basically a diseased mentality. Remember the Pareto Principal, 20% that follow proven methods and do it the right way succeed and the other 80% too bad so sad. I believe it is more like 10%. Like I said, 9 out of 10 don't do what I say.
Last, a very successful person that has 15 million in net worth when I was first starting out investing in RE told me, "I never take financial or business advice from somebody that has less than me." John Wittman owner of Protell Communications etc... Based here in San Diego. That's when I figured out my financial planner makes less than I do and I was floundering, deworsifying my funds in various mutual funds etc.... I cashed that stuff in and am now financially free!! I am on my way to $750,000-$1,000,000 in cash flow per year!! If a lowly paid teacher with a combined family gross w2 earned income of $80,000 can do this with a $2000,00 personal residence mortgage in a pricey area of the U.S. can do this, imagine what you could do!!
Three rules.
1. It must cash flow.
2. It can't lose money.
3. No more becoming financially free slowly through 401k, IRA, Pensions, waiting for som imaginary date in the future. I want to live now.
Are you with me? Let's retire financially free before the age of 33? 43? 53? I turn 52 in August. I just started to figure this stuff out at 46 years old.
If any of you reading this are in the San Diego area, I am starting to get together a list of people to network with to create financially free RE Investors one person at a time. Contact me by personal message or look at my profile and give me a call. Even if you are not in the San Diego area contact me. I truly believe that if I help enough people in this world get what they want, I will get way more than I can ever want!!
"If you change the way you look at things, the things you look at change right before your eyes."
Swanny
@Jeff Wallenius that's awesome! My thoughts are start in California there are some foreclosures I am seeing still at 100k. I am thinking buy cash fix and rent and hold! Refi go get more doors!
Hi @Paul Timmins,
I just sent you an email. Keep creating financially free people one person at a time. That is my goal!! The more people that I help to educate and get what they want and need, the benefit to me is I will get way more than I can ever want or need.
Please let David know how much he means to me and everyone I talk to regarding the apartment complex business model to financial freedom!!
Swanny
@Linda Labbe I would love more information on out of country investing.
Hi @Mercedes Falber Investing out of state is possible with the right team behind you. I've been doing it successfully in the Milwaukee WI market and I'm on Long Island NY. Always remember to persist and you will win!
I live in LA...so same problem as you're running into in NYC with prices and [lack of] returns. I've always bought out-of-state and used property managers. I've never regretted doing it and it's all I really care to do. So yes, it's totally doable!
@Ali Boone i wanted to tell you some of my plans and give you an update maybe I can give you a buzz tomorrow what time is usually good to call you.
There is a Great deal of information out there if you just type in improving rental property on Google there's different articles and a lot to learn. I read that this guy had a rental and on the second set of tenants he was able to raise the rent like 100 or 200 bucks a year I think. He said the rental market got hot and he was able to raise the rent quite a bit.
@Mercedes Falber are you any closer to getting started then you were 9 days ago? What have you learned thus fa