New Investor in NYC Looking to Invest Out of State

[Jinyu Shao]

Hello everyone, 

I've just recently got into real estate investing. I have been mostly doing research on different areas to invest in and educating myself.

I currently own two properties in NYC and became a landlord by accident. When I decided to begin my journey as a real estate investor, I quickly realized it would be too difficult to invest in NYC. So I started looking into places like upstate NY, Baltimore, and Philly. Recently I learned from a podcast that some states are more landlord friendly than others, states like Texas, Indiana, and Colorado. Since I plan to hire a property management company so I don't think the distance will be an issue. 

I would love to get some advice on how I can proceed from here. Should I go visit those states to check out the neighborhoods? Should I do some more research on those areas? If yes, what should I focus my research on and how long should I do that before I visit the area? Or should I continue looking into the areas close to where I am?

Thanks in advance!

PS: I'm currently looking to join an RE investment group in the NYC area to expand my knowledge. Would love to hear what are some good ones to join! :)

[Andrew Herrig]

@Jinyu Shao I would be very careful with turnkey in Dallas. Do your due diligence.

Memphis Invest is a good turnkey company, but even they tend to price their properties based on rent ratio rather than comps. In many neighborhoods, you are paying a premium to the comps and I don't believe you'd be able to recoup your initial investment if you had to sell in the near future.

In addition to that, you need to calculate property taxes based on what the property is being sold to you for, not what is on the tax rolls. 2.7% of appraised value is a good rule of thumb. County tax rolls may say market value is only $50k, but rest assured when the county finds out it has been sold for $100k, your taxes will be double next year.