Investor · Seattle, WA · Member since 2016 · 108 posts · 43 votes
I'm considering the possibility of acquiring properties out of state as rentals, either SFH, or small MF properties. I'm located in the Seattle area, but rentals in the midwest are priced significantly lower with much juicier yields. I realize that the upside appreciation may not be as high as the Seattle area, but it seems that for the same amount of capital you can get a much higher cashflow.
I'm interested to hear from people that have invested out of state, how have you done it? Purchasing a complete turnkey solution, sight unseen, or build a team remotely from your home state to find properties and tenants, and property management.
I'm interested in hear both the things that have gone right as well as the pain points.
Professional · Los Angeles, CA · Member since 2015 · 33 posts · 10 votes
10y
Hi Rob,
Most of our investment properties are out of state as the cash-flow is better( I am in California). When I go into an area. I build a team first. I usually have 2-3 property managers in case one is not performing. Also have someone that can find you deals( network with wholesalers realtors, etc).
Most of the time we try to get equity on the purchase. As it gives downside protection if something goes wrong and increases your return.
I would be careful sight unseen. Unless you have some boots on the ground that you trust. Perhaps do some research on the areas, We tend to ask what can go wrong first, Whats the climate?, In a flood zone? Earthquakes? How can I mitigate risk? What do the numbers look like? Are there many foundation issues in that particular area.? etc,
Overall its worked out pretty well with a few bumps along the way. We started investing in 2003.
Hope this helps, Reach out if you need more specifics.
No, nothing in SoCal (there are no turnkeys in SoCal because there's no cash flow). Right now my faves (based on market fundamentals and quality of turnkey provider) are Indianapolis and Chicago. Second to those are Kansas City and Philly.
No, nothing in SoCal (there are no turnkeys in SoCal because there's no cash flow). Right now my faves (based on market fundamentals and quality of turnkey provider) are Indianapolis and Chicago. Second to those are Kansas City and Philly.
There is cash flow and hands off turnkey style in SoCal they just call them " investments " instead. There are some right here in LA, new duplexes, no rent control, fully managed hands off if you wish. They don't advertise much because they really don't need to. They rent for 2600+ a side and will cash flow no problemo with standard down payments. Check oceandevelopment . Com. Or if you go 60 to 100 miles out you will see initial cash flow opps all over the place as well. Good luck!
I'm considering the possibility of acquiring properties out of state as rentals, either SFH, or small MF properties. I'm located in the Seattle area, but rentals in the midwest are priced significantly lower with much juicier yields. I realize that the upside appreciation may not be as high as the Seattle area, but it seems that for the same amount of capital you can get a much higher cashflow.
I'm interested to hear from people that have invested out of state, how have you done it? Purchasing a complete turnkey solution, sight unseen, or build a team remotely from your home state to find properties and tenants, and property management.
I'm interested in hear both the things that have gone right as well as the pain points.
Rental Property Investor · Hong Kong, Hong Kong Island · Member since 2014 · 188 posts · 114 votes
10y
@Curt Davis and @Jay Hinrichs thanks for reminding us the risks of a $40k deal. Buying those means there is no exit, is a bit like getting the property tattoed on your skin.
Out of state investor need safer cashflow. How much do you suggest is the price that allow for mistakes by the property manager not to escalate into disaster. Or do you have another criteria.