Where to purchase my first investment property?

Question

Hi Bigger Pockets Fam! I just joined the community today and had a few questions. I'm a realtor in Los Angeles but I am looking to purchase out of state where I can earn much better cash flow.

I have about $50,000 for a downpayment. Another $50,000 in case I need to rehab.

What is a good market to explore? I would prefer to use the BRRRR method but I'm open to turnkey properties.

Elizabeth Rose · Answer

Investing is personal!  I invest in a suburb of Cleveland, OH and see a balance of cash flow and appreciation.  I think it depends on what your goals and situation are: what kind of return do you want/need? how long will you plan to hold? do you care about appreciation? how much time and effort are you realistically able to devote to managing a rehab from out of state? do you have someone you trust in the area?

Once you have an idea of your personal investing goals, you can find a market that matches your needs and build a team to help you accomplish your goals.

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Aj Parikh · Answer

You already have half the battle won with the downpayment amount and rehab money ready. If you are trying to explore turnkeys, I recently purchased a Single Family Home for $90,000 in Cleveland, OH with Martel Turnkey and its cash flowing close to $300/month. I have a 9-5 pm job and I wanted to remain passive in my investing journey so turnkey looked like a good option to start and this was my 1st out of state investment so I wanted to be cautious. Let me know if you want to connect and talk about this purchase process.

Full Disclosure - I don't get paid to promote the turnkey company. I am just sharing my experience because I was able to get a cash flowing rental property and I genuinely like to help new investors.

Full Disclosure - I don't get paid to promote the turnkey company. I am just sharing my experience because I was able to get a cash flowing rental property and I genuinely like to help new investors.

Mike D'Arrigo · Answer

@Anthony Luevanos BRRRR can be a good strategy as long as you have plenty of time to manage it. There are a lot of reasons that it is difficult to pull off when you're out of state. A lot of popular investment markets are extremely competitive right now and things get snapped up quickly. You have to consider how you are going to do your due diligence quickly when you aren't there. How are yo going to know if the neighborhood is good or not? How are you going to know what the ARV is? How are you going to know how much rehab it needs and what the cost will be? You need all of this information so you know how much to pay. On a BRRRR, you make your money by buying right. If you're off on anyone of these, you can end up losing a lot of money. BRRRR looks good on paper but it's a lot more difficult than it might appear for an out of state investor.

Tim Siocheng · Answer

What is it like investing in OH? The properties that i have been looking into has high property taxes. My personal experience with property taxes isn't really that good (maybe because i live in california.. where taxes gets you every turn you make.)

I am trying to justify the high property taxes.

I search the schools and they average around 4-7.. some are down to 2's. Property appreciation is around 2% (i'm just rounding numbers)

Are there alot of rental demand? How much can you raise rent.. to justify the raise in property taxes. ?I am just trying to gather information for me to see a better picture of investing in ohio.

i highly appreciate the input

Saleh Riazi · Answer

Welcome Anthony,

I am also an out of state investing in OH. I think based on your budget I will probably look into Cleveland area. I personally try to avoid turn key properties since, there is not much upside to it, but as AJ mentioned, if you really want to be hands off and just a passive investor, it might not be a bad option.

Good luck

Where to purchase my first investment property?

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