What state to invest? All cash, no loan

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What state to invest? All cash, no loan

Scott Ball
Member since 2023 · 18 posts · 9 votes

We are property investors from Australia - we can't qualify for a loan since we have no credit history, so the 1st property will be all cash. 

We are just after a hassle free,  'no-brainer' rental to get us started with steady cash flow, and good chance of some appreciation over the years. Buy and hold long term. Will consider any state, but not interested in apartments, just single family or multi family. Budget around $250K and ideally no older than 15 years old so we can get some depreciation. Thoughts on what states to invest?

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Evan HoppleBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
3y

@Scott Ball I invest in Columbus, OH real estate. Huge growth to come from recent additions to the tech sector (google, intel, amazon, honda, and many start ups). Plans to were announced last month to invest $2B into the cities airport in anticipation of the population/business travel growth. Plenty of properties here that fit in your price range!

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  • Jordan Sinclair
    Investor · Adelaide, South Australia · Member since 2015 · 136 posts · 78 votes
    3y

    There are a number of states and investment options in that price range. I always say it's all about building a team on the ground and the rest is history. But to answer the question, Midwest states like Ohio could be a starting point.

    2Reply
  • Scott Ball
    OP
    Member since 2023 · 18 posts · 9 votes
    3y

    Thanks Jordan, 

    Good to see a fellow Aussie. Have you invested over there? We were looking at Ohio as one of the options. 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Scott Ball:

    We are property investors from Australia - we can't qualify for a loan since we have no credit history, so the 1st property will be all cash. 

    We are just after a hassle free,  'no-brainer' rental to get us started with steady cash flow, and good chance of some appreciation over the years. Buy and hold long term. Will consider any state, but not interested in apartments, just single family or multi family. Budget around $250K and ideally no older than 15 years old so we can get some depreciation. Thoughts on what states to invest?

     I know dozens of investors that have been buying rental properties in the Cleveland markets for years. All with about 10% net caps, 

    All the best  

    1Reply
  • Scott Ball
    OP
    Member since 2023 · 18 posts · 9 votes
    3y

    Thanks Bob - yep we would be happy with that if they are newer properties. 

    0Reply
  • Jordan Sinclair
    Investor · Adelaide, South Australia · Member since 2015 · 136 posts · 78 votes
    3y
    Quote from @Scott Ball:

    Thanks Jordan, 

    Good to see a fellow Aussie. Have you invested over there? We were looking at Ohio as one of the options. 


     Yes, since 2015. While the numbers can look good on paper, if you don't have a team on the ground, the numbers will be much lower in the long run.

    All the best!

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Scott Ball:

    Thanks Bob - yep we would be happy with that if they are newer properties. 


     No, they are not newer, but that is 100% irrelevant as long as they are renovated properly. I have dozens that are all build from 1920- 1940 and know many investors with 100s and 100s of properties that are buying the same age. 

    Gooid luck 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Jordan Sinclair:
    Quote from @Scott Ball:

    Thanks Jordan, 

    Good to see a fellow Aussie. Have you invested over there? We were looking at Ohio as one of the options. 


     Yes, since 2015. While the numbers can look good on paper, if you don't have a team on the ground, the numbers will be much lower in the long run.

    All the best!


     100% correct, I tell everyone do nothing without a team. I live in FL and do all my business there, as I have a full team in place, 

    1Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    3y
    Quote from @Scott Ball:

    We are property investors from Australia - we can't qualify for a loan since we have no credit history, so the 1st property will be all cash. 

    We are just after a hassle free,  'no-brainer' rental to get us started with steady cash flow, and good chance of some appreciation over the years. Buy and hold long term. Will consider any state, but not interested in apartments, just single family or multi family. Budget around $250K and ideally no older than 15 years old so we can get some depreciation. Thoughts on what states to invest?

    Hi Scott, I'd recommend that you look into 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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  • Liam Maher
    Miami, FL · Member since 2022 · 60 posts · 39 votes
    3y
    Quote from @Scott Ball:

    We are property investors from Australia - we can't qualify for a loan since we have no credit history, so the 1st property will be all cash. 

    We are just after a hassle free,  'no-brainer' rental to get us started with steady cash flow, and good chance of some appreciation over the years. Buy and hold long term. Will consider any state, but not interested in apartments, just single family or multi family. Budget around $250K and ideally no older than 15 years old so we can get some depreciation. Thoughts on what states to invest?

    Hi Scott, here's a list of some of the best cities for cash-flow at the moment. Also have a list for landlord-friendly states, appreciation etc. if that can help

    1Reply
  • Evan HoppleBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
    3y

    @Scott Ball I invest in Columbus, OH real estate. Huge growth to come from recent additions to the tech sector (google, intel, amazon, honda, and many start ups). Plans to were announced last month to invest $2B into the cities airport in anticipation of the population/business travel growth. Plenty of properties here that fit in your price range!

    [email protected]614-924-8151
    Reafco Real Estate
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    4Reply
  • Mohammad Parwez
    Real Estate Broker · Greensboro, NC · Member since 2023 · 81 posts · 45 votes
    3y

    You can get entry level houses in the triad area of North Carolina for less than 200k for 3 bed 2 bath single family homes.

    The average rent for this kind of units are between $1400-2000 per month.

    Even though the cash flows may not be very aggressive $300-$500 per month but there are high chances of property appreciation in 3-5 years. 

    Mohammad Parwez

    NC Realtor

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

    I would say hands down Detroit.

    But if you're sticking to the 15 years or newer build that's not going to happen.

    If you're planning to finance future purchases I'd make sure that whatever market you're looking at "works" from a cash flow perspective with financing today.

    There's no sense investing in a market and later realizing it's not going to scale with your future plans.

    1Reply
  • Ray Lin
    Rental Property Investor · MS · Member since 2018 · 67 posts · 46 votes
    3y

    I don't think a particular state is the answer. I would recommend you focus on a specific zip code to narrow your search. For example, in the state of New York, Manhattan zip code, home prices median is above a million dollars. However, in Syracuse, some homes are less than $100,000. I have invested in various markets and have been only successful when the property manager is good. You need boots on the ground. You need a trusted team which will work for your interests. I have heard countless horror stories from landlords complaining about their property managers. A good manager will make you money and a bad manager will take your money. I believe in real estate, you just need to find a good team. We have been investing in MS for the past ten years.

    1Reply
  • Nader Shariff
    Detroit, MI · Member since 2020 · 150 posts · 68 votes
    3y

    I would look into the midwest - and more specifically Detroit, MI . 

    Low Entry Price Points (65-90k for a SFR) , and Strong returns - if you have the right team on the ground, Detroit could be a great place to build a portfolio.

    1Reply
  • Leroy K. WilliamsPro Member
    Property Manager · Southfield Mi · Member since 2018 · 185 posts · 173 votes
    3y
    Quote from @Nader Shariff:

    I would look into the midwest - and more specifically Detroit, MI . 

    Low Entry Price Points (65-90k for a SFR) , and Strong returns - if you have the right team on the ground, Detroit could be a great place to build a portfolio.

    Yes Detroit is actually a No brainer when it comes to "Finding the Next Boom City".  Detroit has several major projects underway including the construction of the Gordie Howe international crossing to Canada, the Joe Louis Greenway, the Riverwalk expansion and the several skyscrapers and Hotels downtown. Detroit sits on an international border and two countries are collaborating on Detroit's growth and emergence as an international destination.

    AS it relates to having the right team on the ground, that is true, which is where companies like ours come into play. Feel free to reach out by inbox.  


    1Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    3y

    @Scott Ball

    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, but doubt you'll find this much info for any other market in the US.

    So, why would you invest remotely anywhere else?

    How can we assist you further?

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  • Allan C.
    Rental Property Investor · Member since 2018 · 826 posts · 810 votes
    3y

    @Scott Ball age of the building doesn’t have any bearing on the depreciation amount you’re able to capture for US tax law.

    0Reply
  • Scott Ball
    OP
    Member since 2023 · 18 posts · 9 votes
    3y
    Quote from @Allan C.:

    @Scott Ball age of the building doesn’t have any bearing on the depreciation amount you’re able to capture for US tax law.


     Hi Allan, sorry there must be a lot I need to learn about how the US and Australia are different. I thought you could only depreciate a house there for 27.5 years? 

    0Reply
  • Mackaylee BeachPro Member
    Real Estate Agent · Kansas City, MO · Member since 2020 · 1k+ posts · 492 votes
    3y

    Kansas City! Lots of options with great opportunities!

    Feel free to reach out to me if you have any questions or would like to schedule a call.

    [email protected]
    1Reply
  • Allan C.
    Rental Property Investor · Member since 2018 · 826 posts · 810 votes
    3y

    @Scott Ball depreciation starts at the time you own the building, not when the building was constructed. A 100 yr old building can be fully depreciated 3 times by 3 different owners, but each individual owner has a maximum depreciation amount that is the full cost basis of the building.

    You can review 1031 exchange as the next lesson to get more miles on depreciation (and capital gains tax deferral).

    1Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    3y
    Quote from @Scott Ball:

    We are property investors from Australia - we can't qualify for a loan since we have no credit history, so the 1st property will be all cash. 

    We are just after a hassle free,  'no-brainer' rental to get us started with steady cash flow, and good chance of some appreciation over the years. Buy and hold long term. Will consider any state, but not interested in apartments, just single family or multi family. Budget around $250K and ideally no older than 15 years old so we can get some depreciation. Thoughts on what states to invest?

    Your question is timely as we are doing our 2024 planning. Given your price point of $250K the states you should consider are:

    1. Houston Texas- Average home price is $264K but for a rental, you'll find homes for less

    2. Chicago Illinois- The average home price is $287K; the Median Price is $340K; both price points are above your criteria but there are surrounding communities where you can acquire below your price point. Just have to pay close attention to the property taxes. 50% of the population are renters. The stock of homes will generally be older than 15 years so you'll have to stick to the suburbs that did new builds a few years ago or are doing them now. 

    3. Columbus Ohio- Growing fast; Average home price is $240K; Median is $290K;  Potentially the same issue as Chicago with regards to the age of the housing stock if you stay in Columbus proper.

    4. Birmingham Alabama- Median home price of $192K

    Something that you may want to consider given your criteria of 15 years old or less is Build To Rent. 

    312-681-7487
    2Reply
  • Scott Ball
    OP
    Member since 2023 · 18 posts · 9 votes
    3y
    Quote from @Allan C.:

    @Scott Ball depreciation starts at the time you own the building, not when the building was constructed. A 100 yr old building can be fully depreciated 3 times by 3 different owners, but each individual owner has a maximum depreciation amount that is the full cost basis of the building.

    You can review 1031 exchange as the next lesson to get more miles on depreciation (and capital gains tax deferral).


     Wow, see that's something different I didn't know - over here in Australia it's based on the age of the build so thank you!! 

    0Reply
  • Greg ParkerBusiness Member
    Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 669 posts · 536 votes
    3y

    I have helped an investor from New Zealand buy about 100 houses here in Mongomery, Al.  I would be glad to give you her email address.  She may be able to answer a lot of questions for you.

    Also,
    In a number crunch of 300 cities using 10 metrics ranging from home prices to tax rates to vacancy levels, WalletHub determined that Montgomery, Alabama, was the nation’s most affordable city for homebuyers. Rounding out the top 10 of affordable homeownership cities were Flint, Michigan; Toledo, Ohio; Detroit; Akron, Ohio; Warren, Michigan; Pittsburgh; Yuma, Arizona; Springfield, Illinois; and Palm Bay, Florida.

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Scott Ball:

    We are property investors from Australia - we can't qualify for a loan since we have no credit history, so the 1st property will be all cash. 

    We are just after a hassle free,  'no-brainer' rental to get us started with steady cash flow, and good chance of some appreciation over the years. Buy and hold long term. Will consider any state, but not interested in apartments, just single family or multi family. Budget around $250K and ideally no older than 15 years old so we can get some depreciation. Thoughts on what states to invest?

     OH, investors from around the world have been buying there for many many years, for 250k you can get 2 SF with 1300 in rent each, 

    All the best 

    2Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    3y
    Quote from @Crystal Smith:
    Quote from @Scott Ball:

    We are property investors from Australia - we can't qualify for a loan since we have no credit history, so the 1st property will be all cash. 

    We are just after a hassle free,  'no-brainer' rental to get us started with steady cash flow, and good chance of some appreciation over the years. Buy and hold long term. Will consider any state, but not interested in apartments, just single family or multi family. Budget around $250K and ideally no older than 15 years old so we can get some depreciation. Thoughts on what states to invest?

    Your question is timely as we are doing our 2024 planning. Given your price point of $250K the states you should consider are:

    1. Houston Texas- Average home price is $264K but for a rental, you'll find homes for less

    2. Chicago Illinois- The average home price is $287K; the Median Price is $340K; both price points are above your criteria but there are surrounding communities where you can acquire below your price point. Just have to pay close attention to the property taxes. 50% of the population are renters. The stock of homes will generally be older than 15 years so you'll have to stick to the suburbs that did new builds a few years ago or are doing them now. 

    3. Columbus Ohio- Growing fast; Average home price is $240K; Median is $290K;  Potentially the same issue as Chicago with regards to the age of the housing stock if you stay in Columbus proper.

    4. Birmingham Alabama- Median home price of $192K

    Something that you may want to consider given your criteria of 15 years old or less is Build To Rent. 


     your stats are a little outdated for columbus on average price, median, etc I'd recommend you do a little more research or look at the monthly housing stats they publish every month. you are about 10% low 

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