All Forum Posts by: Rohan D.

Hi Vinod, lot of questions, I'll try to answer them the best I know
1) Any home with good schools associated with them will have strong rental demand. If you are looking to buy a quality rental avoid shady area towards DMV side. Otherwise across iron point/prairie city/boardstone/empire ranch are great neighborhoods. Worthy to mention that you cannot expect immediate Cashflow from these rentals, since Folsom is more of an appreciation market. 
Folsom ranch has very high demand, mostly from home owners (a lot of bayarea exodus). I do know few cases where homes have been rented out. The school there has just been built and will start operation soon. I expect the schools to be good. As of right now, all new homes in Folsom Ranch are associated to schools in North Folsom.
The waitlist in Folsom ranch is long and premiums for "lots" are high.
2) Explore Roseville, a good A ranked city with good schools just like Folsom. If you are willing to go to B neighborhoods, check out Carmichael, Fair Oaks. The usual tradeoffs apply, more CashFlow (relative to Folsom/Roseville), less appreciation long term.
3) This is where California will let you down, "Rental comps" are not available easily on the MLS, hence your realtor will not have access to rental demand. For accurate information, you'll have to get in touch with a professional property management company and/or third party apps that sell this data (like rentometer). I myself have not tried this.
Goodluck!

Leander - Hutto - Taylor for ascending cashflow (generally speaking). 450k is plenty budget for 3b2b in Hutto and Taylor.  Hutto particularly is well located to all the industrial growth around it (Georgetown, RR, PF access to 130 (to Manor and Giga) and now Taylor). Most builders don't allow investors for new construction, so look for homes built in the last decade or so.

I agree with the other comments above, having two middle men (home warranty + PM) is setting yourself up for delays and failure. It will allow your PM and HW company to play the blame game on each other and ultimately you and your tenant will suffer.

I would suggest the following:

1. Interview other PMs if you feel these guys have not earned your trust, or something doesn't connect with them.

2. Usually, good established PMs have a network of vendors/contractors through which they are able to get 10-15% discounted prices on any work to be done in your rental.

3. There are some PMs that offer a variety of other services like HVAC tune ups (once a year- for 1% of monthly rent: as an example), dropping air-filters to tenant every 6 months etc. Take advantage of these to save you big expenses down the road.

4. Save yourself the headache of getting a phone call for every little issue. Ask your PM if they have a "Maintenance Escrow" you can setup. Maintain a minimum balance in there (for ex: $500) and the PM will not bug you for any repairs below that price. The minimum balance gets refilled next month when rents are collected.

5. Its tough, but try to build a network with other contractors, you should know the approximate cost (incl labor) to fix a leak, broken shower, caulking the bathrooms, rekeying your locks etc. Being informed here will help you spot a bogus PM who is trying to take you for a ride.

6. If your rental (its HOA) has a nextdoor or facebook group- join them. You will get to know/ask common issues/solutions in those forums and make more informed decisions.

7. Lastly, the only reason to cheer up would be the tax breaks you get from making these repairs! save those receipts :)

Hope this helps, goodluck...

Hi Vikas, I do not know about either of the cities. But stick to the basics when it comes to trying to select your market. Population growth, job growth, income growth and a landlord friendly state (I think RTP wins here). Make sure you check with your realtor to share lease (rental) comps, that will give you a good idea about rental demand (cost and days on market). Afaik, rtp will not cashflow unless you increase your equity in the deal.

Lastly, cannot stress enough on having a good team on the ground, one you can trust.  The point here is, talk to PMs in both cities and get a feel of rents, management expenses, management styles etc. They will give you an idea of preferable neighborhoods, preferable house layouts for renters etc...

Since you are going to be a oos investor, just curious why restrict yourself to these 2 cities? It's understandable if its because of your familiarity to the city in the past. But you maybe giving up greater cashflow/growth potential by leaving the rest of many wonderful cities out.

hope I did not confuse you further :)

@Vivek Sapre, understand the frustration with this sort of uncertainty. But Rental comps and can tweaked to give you the exact information you are looking for... you can filter by house size, age, sq ft, radius, homes rented last week vs last month vs last quarter. If nothing, you atleast get to know trends and directions... I still feel it's the strongest indicator out there... 

like anything else, there will always be outliers in this business too. A detailed dive into the "high" rent properties you mentioned, might reveal, good time to market (maybe listed for rent before long weekends), summers, upgraded homes and lots of other factors... 

Realtors have the most accurate and upto date information with respect to this. Ask for "Lease comps" or what they call "Rental comps" for the (house) areas of your interest. This data will provide you rental amount and more critically DOM (days on market). This can help you gauge demand and $/sq ft.

There maybe paid subscriptions to some other services like rentometer but I am not aware of this.

PS: RR/CP/PF/Hutto might get you $0.9 to $1.1/sq ft.

Experts can add....

@Tyler Bolton Real estate is hyper hyper local... every city weather in Texas or Indiana or anything else will have a house that aligns to your goals ( some cities more than others).  The very first question anyone will ask you is "why?" Out of state.  What is your goal from investing out of state?  Do you care about cash flow? Do you care about appreciation? Are you a hands on investor or passive? Flip or buy and hold?  What is your financial risk tolerance? ( does a 500k first OOS investment make you nervous? Then probably you should learn the game by starting with a 150k property). I would say identify your goals then choose a city... Without a lot of these answers unfortunately you could choose the best city but make the worst investment... 

@Paul Moore, @Ian Ippolito, @Lane Kawaoka- relying on experts since I've always had this question.
Is apartment syndication really true wealth building? Your returns increase, your income goes up, but as passive investors, if we hold for ~5 years and sell (pay capital gains and recapture depreciation) and re-invest into a new syndication, you are always going to have to rely on a new syndication to get you that cash flow every ~5 years. Is my assessment of syndication with respect to wealth building correct?

Hi Dayton, these are my thoughts
1. If you plan to hold the property for long (7-10 years) and don't need liquid cash at the end of your 2 years stay in Indianapolis, I would recommend buy. Multiple benefits: lock in low interest rate (as a primary home [low%] vs investment [high%]), build equity, house hack a bit while you stay there (if that's your thing) for potential rent upside in the future.

2. I've heard good things about Westfield, experts on this forum can comment more. Avg rent ~$1750 and stays on the market for about 3 weeks before it gets rented out.

3. Property management in Indianapolis is an industry by itself. They make it really easy for out of state investors to manage rentals. I can recommend a few if and when you plan to take that route. Monthly PM fees are ~10% of the rent + some leasing fees. You should be able to easily cashflow on your home especially if you buy it as a primary residence at a low interest rate.

Hope this helps. Goodluck!

Hello Chicago BP community, I am posting this for a friend who is currently not on this forum:

He is currently looking to purchase his first primary residence and is confused between Evanston (apt/condos) vs Buffalo Grove (SFH/townhome).

Price range: 280k-310k

Main Purchase Criteria: his uncertain future so he may move out within a year or two. Hence should have strong/stable rental demand to let the home out on rent without any issues.

Long term (5-8 yrs) appreciation

Here are some of the pros and cons he noticed between Evanston vs Buffalo Grove

Evanston Pros:

1. Closer to work

Evanston Cons:

1. Crazy high HOA (~$500). Uncertainty in "HOA reserves" and price trajectory- what HOA could be 5-6 yrs down the road?

2. Sale prices seem to fluctuate up and down in this area vs steady increasing (over the last decade or so). Why is that?  Folks have sold some apartments at a loss. Something I don't know about this market?

3. Future sale of apt will only attract investors and not primary residence (since its an apt)- is this the right assumption?

Buffalo Grove pros:

1. Good schools

2. How is the rental demand here?

Buffalo Grove cons:

1. Further away from work.

Where do you recommend he look based on his criteria and risk tolerance?

Appreciate your time reading this and helping him with your inputs! Stay safe!