Wanting to invest out of state as it is cheaper and more value

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Wanting to invest out of state as it is cheaper and more value

Andy Wu
Member since 2024 · 2 posts · 11 votes

Hi everyone! I'm Andy, I'm orignally from California but moved out to Texas. I've been watching a bunch of BP episodes and doing a bunch of research. I'm a newbie but I'm a fast learner and I believe I'm a pretty competent person in general. I see on podcasts other people doing it as a newbie and have made it to the big league. I want to the out of state investing as it seems like a better place to get started. I realize that it is harder to start out of state but from what I've read/known the process is very similar to doing it in-state. Ideally I'd like to BRRRR. I want to buy a property for around $50-100k, rehab it for maybe another maybe 30-50k and rent it out. The cash flow looks great for that amount of money. Excited to get out of analysis paralysis and start taking action. Hopefully I can be like some of you one day. If there are any local investors out there I'd love to connect!

Bests, Andy

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
2y

I would not recommend doing major renos when you are a brand new investor and are investing out of state.  The money on paper may look good on some of the cheap homes, but the reality is often very different.

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  • Nick Maugeri
    Real Estate Broker · Modesto, CA · Member since 2023 · 192 posts · 77 votes
    2y

    Congrats on doing away with Analysis, Andy. 

    I'm in CA and invest out of state. If you have the capital you're alluding to, around $150K, there's better routes to take than SFH BRRRR and depends on hold periods. The first one isn't the best one but you don't get to the best one without the first one.

    Text if you'd like, happy to jump on a call and share insights and what I have done for some marginal success. 

    2Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    2y

    Hey Andy, I invest in Detroit from California. I have a crazy strong team I work with there but I cheated... I spent 5 years on the ground in the Detroit area building relationships, learning the market, etc.

    So you really have two paths. Try and build from scratch yourself or plug yourself into a team like, or similar to mine.

    Let's be clear, both are difficult. Finding the right, established team can be tough in itself and no matter how much due diligence you do there is a "leap of faith" element. So be sure to understand the process, the market, the risks, and don't let yourself simply be sold on returns.

    You can definitely be successful investing out of state, you just need to be more careful. Feel free to hit me up if you're looking into the Detroit market at all.

    2Reply
  • Carlos Sosa IIPro Member
    New to Real Estate · NC · Member since 2023 · 11 posts · 9 votes
    2y

    Hi Andy, @Andy Wu 

    I'm pursing out of state investing in NC. Travis is so right & cheating LOL, was great foundation. Being new to REI, having that Team is very helpful. Working on completing mine. Let's connect if you like to discuss.

    704-255-5849
    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    2y

    I would not recommend doing major renos when you are a brand new investor and are investing out of state.  The money on paper may look good on some of the cheap homes, but the reality is often very different.

    6Reply
  • Peter Dorinsky
    Real Estate Agent · Columbus, OH · Member since 2020 · 149 posts · 193 votes
    2y
    Quote from @Andy Wu:

    Hi everyone! I'm Andy, I'm orignally from California but moved out to Texas. I've been watching a bunch of BP episodes and doing a bunch of research. I'm a newbie but I'm a fast learner and I believe I'm a pretty competent person in general. I see on podcasts other people doing it as a newbie and have made it to the big league. I want to the out of state investing as it seems like a better place to get started. I realize that it is harder to start out of state but from what I've read/known the process is very similar to doing it in-state. Ideally I'd like to BRRRR. I want to buy a property for around $50-100k, rehab it for maybe another maybe 30-50k and rent it out. The cash flow looks great for that amount of money. Excited to get out of analysis paralysis and start taking action. Hopefully I can be like some of you one day. If there are any local investors out there I'd love to connect!

    Bests, Andy

    Hey Andy, welcome to BP! There are some great opportunities in the Ohio markets if you're looking to BRRRR. I agree with a lot of what has already been said. Taking on a big renovation project for your first out of state deal can be especially challenging if you're managing contractors that you've never worked with before. If possible it's definitely worth visiting the market you plan to invest in so you can start to build relationships and familiarize yourself with the area. Starting out with something turnkey that will cash-flow is an easier way to get your foot in the door. Regardless, it'll be vital to build your core-4 if you plan to invest out of state, I'd recommend reading this article by David Greene: https://www.biggerpockets.com/blog/core-four-real-estate-tea...
    4Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    2y

    It is always best to invest in your back yard. You have the home field advantage. For 80-90% of the US population that is the best choice. Going remote is not only harder, it will also cost you more; you have to pay people to do what you would normally do yourself.

    My team works with a lot of OOS investors in Milwaukee, we see what works and what does not. Regardless how how much work an OOS takes on in their first project (full BRRRR or just paint & carpet) the next one they buy usually needs less work than the previous one.

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    2y

    It's also substantially higher risk

    [email protected]301-893-4635Podcast Guest on Show #192
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    2Reply
  • Taz Zettergren
    Real Estate Agent · Memphis, TN · Member since 2019 · 365 posts · 264 votes
    2y

    Welcome to the forums @Andy Wu and congrats on the first post! Memphis is a great market to BRRR and I've heard good things about Ohio although I have no experience there. Feel free to reach out if any questions arise I'd be happy to help. Best of luck on the journey!

    1Reply
  • Preston DeanBusiness Member
    Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes
    2y
    Quote from @Andy Wu:

    Hi everyone! I'm Andy, I'm orignally from California but moved out to Texas. I've been watching a bunch of BP episodes and doing a bunch of research. I'm a newbie but I'm a fast learner and I believe I'm a pretty competent person in general. I see on podcasts other people doing it as a newbie and have made it to the big league. I want to the out of state investing as it seems like a better place to get started. I realize that it is harder to start out of state but from what I've read/known the process is very similar to doing it in-state. Ideally I'd like to BRRRR. I want to buy a property for around $50-100k, rehab it for maybe another maybe 30-50k and rent it out. The cash flow looks great for that amount of money. Excited to get out of analysis paralysis and start taking action. Hopefully I can be like some of you one day. If there are any local investors out there I'd love to connect!

    Bests, Andy

     HI @Andy Wu

    I am confused by your location.. You said you moved from CALI to TX but your location says OHIO. Are you wanting to invest out of the state of TX? OR out of the state of OHIO?

    If you are wanting to invest out of the state of OHIO I would strongly suggest to look here in TX! I have over 75 CALI investors who are looking to invest here in TX because of the cheaper properties & how TX is so much landlord friendlier. 

    Sorry, just trying to clarify where you are!

    [email protected]817-480-9452
    United Real Estate DFW Properties 565 Reviews
    WebsiteView Page
    2Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Andy Wu

    BRRRR is a fine strategy, but it is not a cash flow strategy. when you boost that ARV, you reduce the cash flow when you refinance. and on a $50K property, the renovation is likely to be $50-100K.  very, very difficult to start out of state.

    here's a post that goes into these issues in tons of detail.

    https://www.biggerpockets.com/forums/48/topics/1159104-overl...

    you're in texas - you have lots of markets and submarkets. no reason to go out of state.

    2Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    2y

    Cleveland is great for cash-flow but Columbus is a great market to do BRRRR's in. You will see higher returns through appreciation as the city is growing at a much faster rate. Something to really take in mind is that BRRRR's are not the most beginner friendly strategy. You can lose your hat if you do it wrong. I would start with something more like a light value-add so you can filter out any bad contractors, get a feel for investing OOS, and lay out a solid network as your foundation. Think of the first property as the practice period and the BRRRR as the real game day where your practice will pay off. Are you looking to do BRRRR's or invest for cash-flow?

    [email protected]614-662-1652
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    3Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    2y

    Investing out of state should be done with caution. I always recommend buying one grade higher than you would at home (so if your minimum at home is C only buy C+ or better). Also, make sure to visit personally and interview the manager/contractor, etc. 

    I wrote a piece on it a while ago you might find helpful: https://www.biggerpockets.com/blog/2014-12-23-investing-out-...

    And it would be worth picking up David Greene's book: https://store.biggerpockets.com/products/long-distance-real-...

    Podcast Guest on Show #121
    1Reply
  • Simon Ashbaugh
    Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
    2y

    Hey Andy, welcome to BiggerPockets! Since you're into cash flow, you should definitely check out Cleveland OH. The city's strong rental market driven by a growing population ensures a steady income stream and with affordability as well as a median home price below the national average, Cleveland stands out as an attractive option for those seeking a promising return.


    1Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    2y

    If you are under 250K net worth I would buy rentals in OH where you are at. Turnkey through a marketer is too expensive and you living there where the action is a big advantage over your brother in CA.

    1Reply
  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    hey Andy, for your first out-of-state investment property, I'd recommend starting with turnkey properties. It's the easiest way to try being a landlord without dealing with tricky renovation projects. I saw that you are gearing towards the Cleveland market. I personally love the Cleveland market for its cash flow. I invest heavily in this area as an agent. I grew up on the east side of the town with a well versed knowledge of the neighborhood. I am happy to send you my neighborhood grade map to help you get started. Let me know how I can help

    [email protected]614-412-2912
    Reafco.512 Reviews
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    0Reply
  • Andy Wu
    OP
    Member since 2024 · 2 posts · 11 votes
    2y
    Quote from @Preston Dean:
    Quote from @Andy Wu:

    Hi everyone! I'm Andy, I'm orignally from California but moved out to Texas. I've been watching a bunch of BP episodes and doing a bunch of research. I'm a newbie but I'm a fast learner and I believe I'm a pretty competent person in general. I see on podcasts other people doing it as a newbie and have made it to the big league. I want to the out of state investing as it seems like a better place to get started. I realize that it is harder to start out of state but from what I've read/known the process is very similar to doing it in-state. Ideally I'd like to BRRRR. I want to buy a property for around $50-100k, rehab it for maybe another maybe 30-50k and rent it out. The cash flow looks great for that amount of money. Excited to get out of analysis paralysis and start taking action. Hopefully I can be like some of you one day. If there are any local investors out there I'd love to connect!

    Bests, Andy

     HI @Andy Wu

    I am confused by your location.. You said you moved from CALI to TX but your location says OHIO. Are you wanting to invest out of the state of TX? OR out of the state of OHIO?

    If you are wanting to invest out of the state of OHIO I would strongly suggest to look here in TX! I have over 75 CALI investors who are looking to invest here in TX because of the cheaper properties & how TX is so much landlord friendlier. 

    Sorry, just trying to clarify where you are!

    Hey Preston Dean
    I'm in Dallas area right now but I'm still seeing its pretty expensive. I was looking to invest OOS in Ohio, some people here have mentioned other markets which I wouldn't be opposed to if it makes sense. If you do have any properties around in Texas that fits my criteria I'd love to connect! 

    0Reply
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    2y
    Quote from @Andy Wu:

    Hi everyone! I'm Andy, I'm orignally from California but moved out to Texas. I've been watching a bunch of BP episodes and doing a bunch of research. I'm a newbie but I'm a fast learner and I believe I'm a pretty competent person in general. I see on podcasts other people doing it as a newbie and have made it to the big league. I want to the out of state investing as it seems like a better place to get started. I realize that it is harder to start out of state but from what I've read/known the process is very similar to doing it in-state. Ideally I'd like to BRRRR. I want to buy a property for around $50-100k, rehab it for maybe another maybe 30-50k and rent it out. The cash flow looks great for that amount of money. Excited to get out of analysis paralysis and start taking action. Hopefully I can be like some of you one day. If there are any local investors out there I'd love to connect!

    Bests, Andy

    Andy, I recommend starting with a turkey or light-value add deal first for any novice or intermediate investor investing out of state. Some states are easier than others; however, it is important to understand the process and laws of owning properties in another foreign state.

    Find your core-4: Realtor, Lender, GC, and PM. Once those guys are in place and you have a go-to title company that your realtor recommends and a lawyer. You are all set to begin your search.

    I work with a lot of out-of-state investors that like investing in Columbus because it is an investor-friendly state and properties have good cash flow and stronger appreciation.





    [email protected]614-802-5698
    ReafCo | Ahmed Group 533 Reviews
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    1Reply
  • Preston DeanBusiness Member
    Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes
    2y
    Quote from @Andy Wu:
    Quote from @Preston Dean:
    Quote from @Andy Wu:

    Hi everyone! I'm Andy, I'm orignally from California but moved out to Texas. I've been watching a bunch of BP episodes and doing a bunch of research. I'm a newbie but I'm a fast learner and I believe I'm a pretty competent person in general. I see on podcasts other people doing it as a newbie and have made it to the big league. I want to the out of state investing as it seems like a better place to get started. I realize that it is harder to start out of state but from what I've read/known the process is very similar to doing it in-state. Ideally I'd like to BRRRR. I want to buy a property for around $50-100k, rehab it for maybe another maybe 30-50k and rent it out. The cash flow looks great for that amount of money. Excited to get out of analysis paralysis and start taking action. Hopefully I can be like some of you one day. If there are any local investors out there I'd love to connect!

    Bests, Andy

     HI @Andy Wu

    I am confused by your location.. You said you moved from CALI to TX but your location says OHIO. Are you wanting to invest out of the state of TX? OR out of the state of OHIO?

    If you are wanting to invest out of the state of OHIO I would strongly suggest to look here in TX! I have over 75 CALI investors who are looking to invest here in TX because of the cheaper properties & how TX is so much landlord friendlier. 

    Sorry, just trying to clarify where you are!

    Hey Preston Dean
    I'm in Dallas area right now but I'm still seeing its pretty expensive. I was looking to invest OOS in Ohio, some people here have mentioned other markets which I wouldn't be opposed to if it makes sense. If you do have any properties around in Texas that fits my criteria I'd love to connect! 


     Ill send you a connection request! 

    [email protected]817-480-9452
    United Real Estate DFW Properties 565 Reviews
    WebsiteView Page
    0Reply
  • Account Closed
    Real Estate Agent · Chattanooga, TN · Member since 2021 · 29 posts · 22 votes
    2y

    @Andy Wu

    Like others have said, out-of-state can be challenging to say the least. I'm a bit biased towards Chattanooga, TN myself. Here's some information about the area that hopefully you find helpful. Our team specializes in assisting OOS investors, so please message me anytime.

    https://auburndalegroup.com/invest-in-chattanooga/

    https://www.visitchattanooga.com/corporate/accolades/ 

    Good luck in whatever decision you make and happy investing!

    All the best,

    Spencer

    0Reply
  • Gage Klein
    Member since 2020 · 6 posts · 5 votes
    2y

    Hi Andy,

    I can understand the pains of investing in areas where it seems nearly impossible to find cashflowing rentals or even profitable flips! I currently live in Sioux Falls, SD and I help out of state investors on a regular basis. So, I hear this very often! 

    My tip would be to select any area that meets your investment needs. For example, Sioux falls has a mix of cash flow and mild appreciation. Since we're in the midwest, the cash flow tends to be strong. We are also the largest city in South Dakota so we are attracting a ton out-of-state people moving here to avoid all the politics. 

    Once you have a geographical area selected, then I'd reach out to local property managers. They usually have the most extensive connections and can help you assemble the other pieces to your team. 

    1Reply
  • Saloua Berdaa
    Member since 2019 · 2 posts · 0 votes
    2y
    Quote from @Samuel Diouf:

    Cleveland is great for cash-flow but Columbus is a great market to do BRRRR's in. You will see higher returns through appreciation as the city is growing at a much faster rate. Something to really take in mind is that BRRRR's are not the most beginner friendly strategy. You can lose your hat if you do it wrong. I would start with something more like a light value-add so you can filter out any bad contractors, get a feel for investing OOS, and lay out a solid network as your foundation. Think of the first property as the practice period and the BRRRR as the real game day where your practice will pay off. Are you looking to do BRRRR's or invest for cash-flow?


    0Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    2y

    @Andy Wu I think you have such a great opportunity in Texas...the dynamics are just too good to pass up. However it would be tough probably in most cases to BRRR and also to find $50,000 homes to add $30,000 and rent to anyone you want to rent to. Possible but very rare and unique. However for you and especially in this price range I think you will reduce your risk exponentially by investing in your backyard.

    0Reply
  • James W.
    Investor · Long Island · Member since 2024 · 18 posts · 5 votes
    2y
    Quote from @Gage Klein:

    Hi Andy,

    I can understand the pains of investing in areas where it seems nearly impossible to find cashflowing rentals or even profitable flips! I currently live in Sioux Falls, SD and I help out of state investors on a regular basis. So, I hear this very often! 

    My tip would be to select any area that meets your investment needs. For example, Sioux falls has a mix of cash flow and mild appreciation. Since we're in the midwest, the cash flow tends to be strong. We are also the largest city in South Dakota so we are attracting a ton out-of-state people moving here to avoid all the politics. 

    Once you have a geographical area selected, then I'd reach out to local property managers. They usually have the most extensive connections and can help you assemble the other pieces to your team. 

    @Gage Klein Very insightful comment, whats the driver for people moving to LIVE in Sioux Falls? 

    0Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    2y
    Quote from @Andy Wu:

    Hi everyone! I'm Andy, I'm orignally from California but moved out to Texas. I've been watching a bunch of BP episodes and doing a bunch of research. I'm a newbie but I'm a fast learner and I believe I'm a pretty competent person in general. I see on podcasts other people doing it as a newbie and have made it to the big league. I want to the out of state investing as it seems like a better place to get started. I realize that it is harder to start out of state but from what I've read/known the process is very similar to doing it in-state. Ideally I'd like to BRRRR. I want to buy a property for around $50-100k, rehab it for maybe another maybe 30-50k and rent it out. The cash flow looks great for that amount of money. Excited to get out of analysis paralysis and start taking action. Hopefully I can be like some of you one day. If there are any local investors out there I'd love to connect!

    Bests, Andy


    Big reno projects out of state are a bit more difficult than doing it local. If you are to start OOS, I would recommend buying just a long term rental. Even if it is just a 150k SFH in an area like Northern Ky, I think it will be a better start than a reno. Or a SMF for 250k that doesn't need any work. But still, find your market, and find a realtor you trust to help you find a property and have good contacts

    [email protected]859-443-4952
    Sam McCormack Realtor
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    0Reply
  • Gage Klein
    Member since 2020 · 6 posts · 5 votes
    2y
    Quote from @James W.:
    Quote from @Gage Klein:

    Hi Andy,

    I can understand the pains of investing in areas where it seems nearly impossible to find cashflowing rentals or even profitable flips! I currently live in Sioux Falls, SD and I help out of state investors on a regular basis. So, I hear this very often! 

    My tip would be to select any area that meets your investment needs. For example, Sioux falls has a mix of cash flow and mild appreciation. Since we're in the midwest, the cash flow tends to be strong. We are also the largest city in South Dakota so we are attracting a ton out-of-state people moving here to avoid all the politics. 

    Once you have a geographical area selected, then I'd reach out to local property managers. They usually have the most extensive connections and can help you assemble the other pieces to your team. 

    @Gage Klein Very insightful comment, whats the driver for people moving to LIVE in Sioux Falls? 


     Sioux Falls is one of the very few cities in South Dakota where you can find a large demographic of 'wealthy' people. So, the area is nice/well kept. Also, we have a massive market for job opportunities here. Healthcare, banking, farming, and  manufacturing are our big industries. Lastly, we recently had a very large capital company do a $600M development in our downtown this year and Amazon moved into town last year. 

    1Reply
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