All Forum Posts by: Scott K.

@Jacob Michaels 

Rough averages are $110,000 purchase. Rents = $1100. Property Taxes 2.5% of 100% (Texas is EXPENSIVE!). Management = 10%. Insurance = $100 per month.

I have not invested in CA, I invest in TX and have done well. Property taxes are high, but cost of acquisition is low. Our prices have increased about 30-40% in the last year in my city, but still,it's a bargain for many out of state investors. You still can earn 10%+ cap rates in this state in the big cities. 

@Scott K. Thanks for the warm welcome.  

Currently I am investing in Livonia.  I bought a single family home there that Joe set me up with.  Bought it way under market value.  It has at least 40K+ built in equity.   He walked me through everything and answered every question I had.  Stand up guy for sure.

@Orion Walker Happy to jump in here.

I decided against California to invest in because the bay area market just didn't make sense in relation to my overall investment goals.  The best cash flow I can get would be in areas i'd rather not deal with, and I could get the same monthly cash flow out of state for 1/4 of the price.  

So I began investing out of state in Ohio and Michigan some months back and so far, things are going well.  The neighborhoods are NOT war zones at all and the properties i've bought all fall between 25K-45K.   One thing I can say about investing out of state is you really need to make sure you team up with people that really know what they are doing.   @James Wise and @Joe Villeneuve have been two people that i've worked with, and I couldn't have asked for better folks to be on my team.  A lot of the stories you hear about people getting screwed out of state are those who didn't do their homework and jumped in too quickly because the numbers looked good.  Or they used a shoddy turn key company.  I spent the better part of a year rigorously researching neighborhoods, numbers, and specifics before I decided to buy my first property.  I also made sure the guys I am working with have a solid reputation in the real estate community, experience, and high knowledge of the area.

Obviously the biggest benefits of investing out of state are high cash flow and low cost for entry.  The disadvantages are the repair costs/capital improvements can really eat into your cash-flow.  There's also longer vacancies, taxes can be kind of lopsided and the weather back there can cause some issues.  Plus there isn't nearly as much of an appreciation factor.  That being said, I couldn't be happier with my decision investing out of state.  I couldn't get financing so it was a good option for me (paying for houses cash, getting my income higher, then I can refinance).  

I really tried to convince myself to buy in California but I couldn't justify buying here.  I had a set amount of money to spend with no financing and it just made more sense to buy 4-5 houses out of state that bring in 2k + monthly net income versus buying 1 house out here in a bad neighborhood that brings in maybe 700 bucks a month net.  Then I have the tenant issues to deal with.

I do hope to invest in my own backyard one day, but i'd like to get consistent cash flow from out of state income properties first.  Once I have a nice stream of income going, I can bet on appreciation out here and play it slow and steady while my tenants pay off the house for me.  I think theres benefits to both in and out of state investing but it depends on what your goals are and where you are at right now in your investment career.

 Come on Scott.  I know you're better than that.  LOL.  It isn't typical of Wayne County Cities.