Seeking advice to buy my first rental property OOS

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Seeking advice to buy my first rental property OOS

Ritesh Balmiki Panda
New to Real Estate · Member since 2023 · 4 posts · 12 votes

Hello everyone, 

I'm a newbie to the Real estate market, currently based in San Diego, CA. I'm seeking for some advice to buy my first rental property OOS, would love to hear from y'all regarding what all markets are cheaper and can generate good cash flow?


Thanks,
Ritesh

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Najma Osman
Real Estate Agent · Columbus, OH · Member since 2023 · 161 posts · 217 votes
3y

Hi @Ritesh Balmiki Panda, 

Congrats on starting to grow your portfolio out of state! I think this is awesome, it forces you to really be an investor instead of landlord. When considering OOS investing, look for markets with strong economic fundamentals, such as job growth, population growth, and low unemployment rates. This can help ensure that there is a demand for rental properties in the area.

One state you might want to consider is Ohio, which boasts thriving cities like Columbus, Cincinnati, and Cleveland. I personally focus my investments in Columbus, which has seen a significant increase in property values and is expected to continue this trend in the future. This is due in large part to major corporations like Intel, Honda, Nationwide Children's Hospital, and Wexner Medical Center investing heavily in the region and creating numerous job opportunities.

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    • Allan Smith
      Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
      3y

      Every state has dozens of good cash flow cities. Just research the ones you like. Some of the more important metrics would be population growth and unemployment. 

      3Reply
    • Najma Osman
      Real Estate Agent · Columbus, OH · Member since 2023 · 161 posts · 217 votes
      3y

      Hi @Ritesh Balmiki Panda, 

      Congrats on starting to grow your portfolio out of state! I think this is awesome, it forces you to really be an investor instead of landlord. When considering OOS investing, look for markets with strong economic fundamentals, such as job growth, population growth, and low unemployment rates. This can help ensure that there is a demand for rental properties in the area.

      One state you might want to consider is Ohio, which boasts thriving cities like Columbus, Cincinnati, and Cleveland. I personally focus my investments in Columbus, which has seen a significant increase in property values and is expected to continue this trend in the future. This is due in large part to major corporations like Intel, Honda, Nationwide Children's Hospital, and Wexner Medical Center investing heavily in the region and creating numerous job opportunities.

        11Reply
      • Patrick DruryBusiness Member
        Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
        3y

        @Ritesh Balmiki Panda
        I would recommend looking at Columbus, OH. You can get good cash flow and solid appreciation at the same time. Columbus has a lot of job opportunities and population growth. Especially with Intel coming to Columbus as well as Hyperion, which is a company that makes hydrogen fuel cells. Columbus is home to the HQ of Chipotle, Wendys, White Castle, L-Brands, and Hunnington. Columbus is also home to OSU, which constantly develops real estate, employs lots of jobs, and attracts students from the US and internationally to attend. On top of all of that, it boasts one of the best college football teams Ohio State Buckeyes, which is very well known and has a cult following, and attracts a lot of people to the games. If you don't care about appreciation at all you should look at Cleveland OH. Cleveland has a bit higher cash flow than Columbus in exchange for the appreciation.

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      • Austin McClainBusiness Member
        Real Estate Agent · OH · Member since 2021 · 347 posts · 602 votes
        3y

        Dayton Ohio is an affordable market that has cash flow. You can get a good duplex breaking the 1% rule for below $200k there. 

        [email protected]614-710-4827
        5Reply
      • Josie Brown
        Detroit, MI · Member since 2022 · 118 posts · 49 votes
        3y

        Hi there! The metro Detroit area is a great area to look into for an investment property, especially if you're planning to purchase long-term rentals.

        4Reply
      • Account Closed
        Columbus, OH · Member since 2023 · 427 posts · 254 votes
        3y

        States in the midwest tend to be affordable and landlord friendly. Cities like Cleveland, Dayton, and Detroit (not familiar with how landlord friendly MI is) are great areas to go for cashflow. A lot of metrics support the notion that Columbus will continue to appreciate (job growth, pop growth, heavy investment from large employers). There is a construction site and a crane here every other block.

        6Reply
      • Steve Olivier C.
        Investor · NJ · Member since 2015 · 20 posts · 12 votes
        3y

        Hi Ritesh,

        Given what you mentioned, you may consider checking and filtering some feed selection illustrated in the sample screenshot attached here from reinvestmentfeed.com

        Good luck with your search!

        Steve Olivier 

        2Reply
      • Anthony L Amos Jr
        Real Estate Agent · Columbus | Toledo · Member since 2019 · 607 posts · 768 votes
        3y
        Quote from @Ritesh Balmiki Panda:

        Hello everyone, 

        I'm a newbie to the Real estate market, currently based in San Diego, CA. I'm seeking for some advice to buy my first rental property OOS, would love to hear from y'all regarding what all markets are cheaper and can generate good cash flow?


        Thanks,
        Ritesh


        Invest in the wonderful town of Columbus, OH! Home to The Ohio State University with nearly 60,000 students, 5 Fortune 500 companies, over +25% population change since 2000, and the 2016 smart city challenge award winner (https://www.columbus.gov/smartcity/). Furthermore, Intel is spending 20 Billion dollars to build two semiconductor plants, and many more great things presently and coming in the future. Needless to say, Columbus will remain a strong real estate market for the foreseeable future.





        5Reply
      • Travis Biziorek
        Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
        3y

        Hey Ritesh, definitely put Detroit on your list of markets to research.

        I live in the Central Coast of CA but invest in Detroit. I also help others get started there.

        Happy to discuss and provide some insights.

        4Reply
      • Ritesh Balmiki Panda
        OP
        New to Real Estate · Member since 2023 · 4 posts · 12 votes
        3y
        Quote from @Najma Osman:

        Hi @Ritesh Balmiki Panda, 

        Congrats on starting to grow your portfolio out of state! I think this is awesome, it forces you to really be an investor instead of landlord. When considering OOS investing, look for markets with strong economic fundamentals, such as job growth, population growth, and low unemployment rates. This can help ensure that there is a demand for rental properties in the area.

        One state you might want to consider is Ohio, which boasts thriving cities like Columbus, Cincinnati, and Cleveland. I personally focus my investments in Columbus, which has seen a significant increase in property values and is expected to continue this trend in the future. This is due in large part to major corporations like Intel, Honda, Nationwide Children's Hospital, and Wexner Medical Center investing heavily in the region and creating numerous job opportunities.

           Thanks @Najma Osman for replying. Those are some really good advice; I will definitely check out the Ohio market.

          1Reply
        • Ritesh Balmiki Panda
          OP
          New to Real Estate · Member since 2023 · 4 posts · 12 votes
          3y
          Quote from @Travis Biziorek:

          Hey Ritesh, definitely put Detroit on your list of markets to research.

          I live in the Central Coast of CA but invest in Detroit. I also help others get started there.

          Happy to discuss and provide some insights.


           Thank you Travis for your advice, will definitely add Detroit to my list. Let's connect!

          0Reply
        • Ritesh Balmiki Panda
          OP
          New to Real Estate · Member since 2023 · 4 posts · 12 votes
          3y

          Thank you everyone for replying to this thread and sharing some valuable tips & information with me. Looking forward to connecting with each one of you and learn more about your experiences from these markets.

          So far it seems like Ohio is one of the hottest markets especially Columbus, with a lot of potential for cash flow & appreciation. Apart from that, Detroit seems to be another attractive market. Will do some more research to learn more about these markets.

          Please share if there are other markets which I should consider as well.

          0Reply
        • Becca F.
          Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
          3y

          @Ritesh Balmiki Panda I invest in the San Francisco Bay Area and the Indianapolis metro area. I bought a SFH in 2013 in a sought after Indy suburb which has doubled in value. I closed on a basically turn key (with a few minor repairs) SFH in Indianapolis about 6 months ago and it's cash flowing. I'd consider $150 to $200 cash flow acceptable with current interest rates for conventional loans. I haven't done any creative financing such as subject to, seller financing etc yet. There are many options: flips, BRRRRs or turn key rentals. I'm trying to do a flip or BRRRR now that I have a team in place.

          Elanco (animal science headquarters), business parks such as 16 Tech, is some of the development that's occurring. The Indy 500 attracts lots of visitors.

          Some of the major employers are: Eli Lilly, Indiana University Health, Anthem, UPS, Fedex

          https://www.ibj.com/topics/rea...

          https://www.noradarealestate.c....

          Some of my California investor friends have done well in Kansas City, Missouri. A little closer to CA would be Arizona and Nevada and both states have low property tax rates. I'm also looking at Sacramento in the near future since it's within driving distance of the Bay Area. 

          Connecting with an agent who works with mostly investors as opposed to primary home buyers is also crucial. I would highly recommend flying out to the city you're strongly considering - it looks much different in person than in photos and videos. I flew to Indy and have a much better sense of it's street by street and not just by zip codes or what people say is Class B/C/D areas. Feel free to message me with any questions :) Good luck!

          2Reply
        • Michael SmytheBusiness Member
          Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
          3y

          @Ritesh Balmiki Panda

          You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

          https://www.biggerpockets.com/member-blogs/3094/99854-deep-dive-into-metro-detroit-cities-ecorse

          Our analysis is a template you can follow for any city. Doubt you'll find this much info for any other market in the US. So, why would you invest remotely anywhere else?

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        • Jimmy Bostic
          Investor · Columbus, OH · Member since 2023 · 73 posts · 82 votes
          3y

          The Ohio posts are popping off!

          1Reply
        • Chad McMahan
          Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes
          3y
          Quote from @Ritesh Balmiki Panda:

          Hello everyone, 

          I'm a newbie to the Real estate market, currently based in San Diego, CA. I'm seeking for some advice to buy my first rental property OOS, would love to hear from y'all regarding what all markets are cheaper and can generate good cash flow?


          Thanks,
          Ritesh

          It's funny, but 90% of the time, I don't meet my clients (We Zoom, phone chat, email and text- but we don't often meet on-site and shake hands). The key for our success (my clients + myself) is great resources, reliable and quality workers and really strong and reasonable local STR PM (unless it will be self managed). Also, when a property looks great on paper, I capture thorough video, share it, and we discuss. If it looks at least as good on-site, then we work an offer and get a great price. Then use our contractors, inspectors, title, lender, photographers, cleaners, etc- so we know they are all great at their jobs and I know my clients are well covered.

          OOS never concerns me. My feeling is, you've got to go where you can get stronger ROI.
          0Reply
        • Logan M.
          Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
          3y

          Personally, I follow demographics. Real Estate is about the long game so buying in states with struggling population growth is a recipe for disaster. My second suggestion is to buy in landlord's friendly states. During COVID a lot of tenant-friendly states told tenants to not even pay rent.

          Overall, follow growth and politics that favor owning real estate.

          0Reply
        • Scott AllenBusiness Member
          Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
          3y

          @Ritesh Balmiki Panda

          Research 3-5 different markets in the Midwest, pick one, build a Core Four (realtor, lender, property manager, and contractor/s), start writing offers.

          You'll get started and be on track with right mindset. Good books to help - Rich Dad Poor Dad by Robert Kioyosaki and How to Invest in Real Estate by Brandon Turner. 

          [email protected]614-698-1227
          Reafco - Columbus, OH
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        • Jimmy LieuBusiness Member
          Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
          3y
          Quote from @Ritesh Balmiki Panda:

          Hello everyone, 

          I'm a newbie to the Real estate market, currently based in San Diego, CA. I'm seeking for some advice to buy my first rental property OOS, would love to hear from y'all regarding what all markets are cheaper and can generate good cash flow?


          Thanks,
          Ritesh

          Hi Ritesh, I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!

          [email protected]614-300-7535
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          0Reply
        • Ranjit Sandhu
          Real Estate Broker · Rocklin, CA · Member since 2020 · 221 posts · 82 votes
          3y

          @Ritesh Balmiki Panda I'm a real estate broker in Rocklin CA north of Sacramento. I have face time and showed properties to out of state or 2-3 hours away mostly from Bay Area buyers and it does work. There are lot of areas even in CA you can think of. California is so big I am sure you can invest in state. Let me know if I can be any help.

          1Reply
        • Matt Greer
          Real Estate Agent · Mesa, AZ · Member since 2017 · 230 posts · 169 votes
          3y

          I have brother who does lots of real estate investing in the San Diego area and I've been able to show some of his clients and network what the real estate market is like here in Arizona and they're always blown away by how low are property taxes are. I think when investing out of state you have to go through the same fundamental analysis but take into account that it's a completely different market. The taxes and insurance will be different when figuring out your numbers. The growth rate will be different and most of all the laws governing landlord and tenant relations and rights will be different. It's important to keep that in mind when deciding where to buy in an area you might be unfamiliar with.

          1Reply
        • Twana RasoulBusiness Member
          Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
          3y

          @Ritesh Balmiki Panda Welcome fellow San Diegan! 


          There are tons of markets that will cashflow right out of the gate with high cap rates especially smaller markets in the midwest, just remember the higher the cap rate the more perceived risk with that market and opposite is true in a place like san diego, lower cap rates, lower perceived risk.


          Having a people you really trust is arguably more important than the market itself, don't just rely on a Realtor and/or Property Manager...Out of state investing comes with more variables and risks than local investing, do your due diligence.

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        • Scott ScovilleBusiness Member
          Real Estate Agent · Sacramento, CA · Member since 2019 · 497 posts · 272 votes
          3y

          Hey Ritesh,

          Congrat's on starting your journey. I'm an investor and agent in Sacramento. Currently I'm working with many BP investors from So-Cal looking at investing up in Sacramento. I'd be happy to chat it you're interested. Looking forward to hearing more about your real estate goals.

          [email protected]415-933-2202
          Scoville Realty & Investments LLC
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          1Reply
        • Courtney Domann
          Real Estate Agent · Kansas City, MO · Member since 2023 · 37 posts · 13 votes
          3y

          I'm located in Kansas City and out of state investors are flocking here. We still have so many areas that have great growth, reasonable ARV's, and good rent to value ratio. So much potential here.

          0Reply
        • Courtney Domann
          Real Estate Agent · Kansas City, MO · Member since 2023 · 37 posts · 13 votes
          3y

          Hey Ritesh, I know Kansas City has become an OOS hotspot. I hear Indy has been getting a lot of buzz lately too. Those could be good places to look into.

          0Reply
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