Quote from @Nadine O.:
Quote from @Matt K.:
KC, short flight if you get direct and central time makes keeping in contact with both coasts easier. Yea it's only one hour difference then east coast, but you'd be surprised when that's helpful. KC also has a strong and diverse economy with good jobs which can be important if you're making a permant move.
But here's the thing, CA property would give you better chance of some meaningful equity from a funds standpoint. Doesn't need to go up much % wise to have a HELOC that would be a good tool for an out of state property. Midwest property might get you a bit more % wise, but the lower price points just mean less funds to deploy because no one is paid in percentage points.
I'm local to you, rented for a long time because it was better from a price standpoint then buying. I took the down payment money and bought a rental in KC that helped offset my living expenses...then a cash out refi to scale up...was slow but I don't chase doors I went for higher return vs door count.
Now it's coming full circle, using a HELOC on primary that I was lucky enough to get before COVID...which in theory would lead to me being able to improve my first rental and get another HELOC and then use that to improve the others and you guessed it another HELOC ...to then pay down the primary.
Happy to chat more if you'd like.
Matt - that is great to know and good for you! Yes, wish I had pulled the trigger on real estate pre-pandemic for sure.
I will definitely reach out to chat more.
How passive is your investment in KC while you live in CA? Do you have to fly out there a lot?
I will look into that region as well.
Passive is a hard thing to define...
First, I self manage them...second I'm likely a lot more hands on then other people and a bit picky about how/where my money is spent.....
So with that said, 2 of them are pretty passive. Few issues have come up, few maintenance items were a struggle but really it's limited. Would be really hands off if I let a property manager do it. They're in a HOA so lot of stuff is taken care of, but at the same time I aslo have a bit of extra effort to ensure I don't rack up violations...but it's basically on auto pilot now.
The other property was way more of a challenge. Higher price point = more difficult tenants from a needs basis as the expectations are higher. The property is actually two separate units so that added another layer...a basement and older property yet another layer. If you weren't picky and just wrote a check then it wouldn't be terrible and just let a property manager handle it....
I go out there a few times a year, more because I want to be then have to. Only time I really "had" to was an eviction while self managing and I did so to show up in court and demonstrate I'm a real person. Even that wasn't a huge deal, got flight night before and hotel... Fly back the next day if I wanted but I took extra time to check in with the Network I have there.
The thing that no one talks about though is this... There's plenty of people who will take your money and handle things for you. That comes at the expense of money out of your pocket, nothing wrong with it as everyone needs to make money to stay in business.
The struggle comes when you want to be more hands on...you need a way to build those relationships. That comes one or two ways. You either have enough work to keep them busy or...you market them and keep them busy with your referrals, HIGH QUALITY referrals. This way you stay top of mind and they stay busy. The biggest challenge I had was finding those people, it's even more so with out introductions. Introduction speed up the process, but you still have to manage that relationship. Building and growing my network takes more time then managing my properties, but my network is what allows to be successful with my properties.
You don't need to live somewhere to invest somewhere. You just need to be active in that community and understand what's going on (like you actually lived there)
