All Forum Posts by: Hector Espinosa

 Several questions:

1. Are you taking this subject to existing mortgage?

2. What is the home worth today? If you go interest only and have a 5 year balloon the property would need to be worth more than 400k for you to refinance as a lender is going to want 25% equity.  If there was a betting site where you could bet if $300k homes would be worth $400k in 5 years I would heavily bet the under.  

If you do go to sell it and it appreciated say 8%, that is going to be eaten up by your closing costs...

Personally I do not see this as a deal. Curious what others are thinking.

I would only buy single family homes in the best locations I could afford rather than messing with multifamily and less great locations, and I would use my local credit union for loans because they keep them in-house and service them in-house, so that I wouldn’t have to deal with loans being passed around among all the sketchy loan servicing companies.  

Cannot go back…but here are some things I wished I had known about sooner.

I wished I had realized I could have gotten bank lending even without a regular W2 job.

Understood DSCR better sooner.

I wish there was a couple of houses I had not bought.

There are some houses I wish I had not sold.

Just all basic stuff that a person can’t go back in time machine and change.

As time goes on, I probably would update this list several years out. Lol.

In addition there are tons of other turnkey "out of state" markets out there besides those listed above. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

• Cincinnati, Ohio
• Dayton, Ohio
• Toledo, Ohio
• Youngstown, Ohio
• Cincinnati, Ohio
• Memphis, Tennessee
• Saint Louis, Missouri
• Indianapolis, Indiana
• Detroit, Michigan
• Erie, Pennsylvania
• Louisville, Kentucky
• Milwaukee, Wisconsin
• Jackson, Mississippi

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

One thing to note when looking at the individual markets, you can make or lose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

• 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.
• Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estate
• Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.

Hector, great question.

As some others have said I would look to do what you are good at for a career.  something that makes you happy to do and makes you money.  save enough for a down payment and invest in loge term hold.  I always thought that in need to invest where I lived and for may years invested in bad areas that I thought I needed to.  

If there is one thing I would do different is: I would invest Out Of State in markets that had sustained growth, strong job numbers, were safe and desired, and had favorable Landlord laws. 

When I invest  today and many of the investors that I work with, find investing in newer areas, in newer properties, and in areas that the appreciation is obvious, is a great strategy. Today I look for deals that are turnkey and give me less headaches.  The investors that I now work with find that new construction 1-4 unit is the easiest way to find this property.  

Best of luck to all in 2025 

I would invest early and often in multifamily (5+ Units)!
Get connected to resources!
Live my best life and not worry so much about MAKING MISTAKES!!!
Move on from "tire kickers" - deals that waste time and energy!!!

I would invest every penny I had in SFR in growing areas if I started out today. I'd find a way to come up with the 20% downpayment and do whatever it took to go find the next deal. I waited til I was 44 years old to invest in RE and have been buying and holding SFR for almost 10 years now. My only regret was not doing this when I was younger. I could have found the money I bet, but I was scared to be a landlord. Now I own and self manage 29 SFR and find it to be easy. Lol

If I was starting all over I would do two things different:

1. I would have focused on the highest paying W2 I could find/achieve as early as possible in a field I enjoyed;

2. I would have bought rental properties of any sort before I bought my primary home. 

On point #1, I didn't start making any reasonable money until I was closing out my 30's. That's almost 20 years of wasted time that was a ***** to make up later. You can't invest money you don't have. I was always frugal, but I never had enough significant money to invest because I didn't make enough money. 

On point #2, I should have started with a duplex or triplex, lived in the crappiest part and rented the others out while I rehabbed that one, then moved, rented out my unit and did it again. Once again, the loss of the compounding factor by concentrating on my personal home rather than an investment was significant. 

There were a myriad of reasons for these things - some excuses, some legitimate - but the reasons don't matter, only the results matter. I ended up having to kill it in my 40's to make up for all the lost time. The only thing I'll say is that I woke up before it was too late, because yes there is a point where it's "too late" unless you are immortal. There's no substitute for the power of time - compounding interest, appreciation, inflation capture. The sooner you get started, the sooner you're going to get wherever it is you want to be. 

@Hector Espinosa If I was starting over today I would focus on buying two small 1-4 unit properties. Then I would immediately focus on mid sized deals. In my market that generally means 5-10 unit deals. In other words just grow faster.

When I started out I bought 6 small deals starting out. Then I started in on the mid sized ones. In general the economies of scale as associated with the larger properties just makes them easier to manage and causes them to cash flow better.

Cash flowing better might not be true in all markets.

I am an expert in the market I invest in. For this reason I do not look for OOS deals or deals that are more than an hour away from me.

If there were larger deals (10-25 units) in my market I would be focusing on those now that I’ve got 10 deals under my belt.

I recommend having a consistent growth mindset to keep building and expanding your portfolio.