Anyone buying rental properties in Oklahoma ?

[Anthony Petrozzella]

Looking to make meet fellow BP members in the Oklahoma area

[Tracy Streich]

I own properties on both the OKC and Tulsa markets.  I also manage about 600 doors in these markets.   Here are a few of the problems I run into with out of state investors.  

 1.   I can get 2% rule in Oklahoma.   Yes you can but the question is do you really want to be in that market.   You almost have to deal with the local housing authorities and accept vouchers.   This is fine if that is your target market.   They typically pay more.  The rub is we have had to pick up the pieces with OSS investors thinking they are getting a great deal.  In fact they are often dealing with people doing a very poor quality, low end renovation and selling it as turn key.   They then have a house that should rent for $800 per month but they get $1100 per month  with the voucher.   These houses can be bought for $70-80K turn key.   The problem is they are not in good areas.   The house will be worth the same or less in 5 years.   On top of this they bought a house with a sub par renovation.   Turn over cost on these houses tend to be double or triple that of a typical rental and occur almost annually. 

2. The next call it get is "I want to buy a house that needs some renovation and do the BRRRR method" I think the BRRRR method is great....if you are there every day and managing the renovation yourself. If you are paying an OSS contractor you can still get a great reno but is going to cost you. Then you have to have someone checking in on them. Is that your realtor or PM? You will need to pay them to do this as well. This is how this usually works. House ARV is advertised as $130K. Purchase is $75K and needs $30K renovation. Well the $30K always ends up 25% higher because you are not here to manage the renovation and ARV ends up at $120K. Now you have a $120K house that you are all in at $115K that rents for $1000 per month. Still not a bad deal but you spent 90-120 days to get it there and in reality you could have bought a rent ready home on the mls with the same spread.

3.   Next call   "Can you manage and help me get this house leased.   My realtor said it would rent for $1150 per month"   Well your realtor has clearly never rented a house in that particular neighborhood because the rent will be $950-$1000   No matter who you are using to buy the house just call a PM that has no commission on the line if you buy that house and ask them the rent range for that neighborhood. 

I love Oklahoma and I love OSS investors.  Just don't come in with blinders covering your eyes.   Do the due diligence.   I think you can buy and average home in Oklahoma and significantly out perform other markets especially any state touching the Pacific Ocean.  Good luck and welcome to Oklahoma.  Just remember just like where you live...if it is way to good to be true, well you know.