Investing in Tulsa, OK as Serious OOS Investor

Cassi Justiz

Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes

6y

@Tracy Streich, @Scott England

Any insights?

1 Reply

Ben ScottPro Member

Property Manager · Oklahoma City, OK · Member since 2019 · 579 posts · 351 votes

6y

Hey @Jerry Peng, I'm a licensed agent in Oklahoma City but lived in Tulsa for many years. They are very similar markets. I know Devon Energy in OKC merged with WPX Energy recently and that eliminated many jobs in the Tulsa market. In fact, WPX was building a skyscraper in downtown Tulsa and scrapped plans. That move may have trickle down effects in the Tulsa economy.

Insurance costs can often be higher in the midwest due to hail storms. In my experience, Tulsa isn't a very transient city. Most people who live in Tulsa were born in Tulsa (or the surrounding communities).

At the end of the day, it's a city that lives and dies with oil and gas.

2 Reply

Steven Foster Wilson

Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes

6y

Originally posted by @Jerry Peng:

I've been saving up some money since leaving college and now have enough capital to deploy in buying a SFH/Duplex property. I'm interested in Tulsa after analyzing rent to cost ratios based on zipcode/metro area. Of the top 10 markets, Tulsa was in the price range, had a low enough property tax and didn't have crazy tenant-friendly policies.

I'm looking for some help in hearing people's opinions on the following 3 things:

1. Why exactly is rent rising in Tulsa so much? Are the driving factors macro-economic trends such as fluctuations in the Energy sector, COVID-19, and lower income taxes or is it trends that are specific to Tulsa, such as major company opening up jobs in the area?

2. What are the types of costs that are unique to Tulsa? For example, I've heard wind associated costs on roof are important to factor in when looking at how old a roof is in Tulsa versus say in Arizona.

3. Why are people not buying houses at the same rate individuals are renting properties? Is it due to the types of jobs in Tulsa where it's hard to save for a down-payment, is Tulsa more of a transient city, before moving to a larger city like OKC or Dallas, or is it something else I'm completely missing?

Much thanks to anyone who can give me any information on any of the three above questions.

Just some background info, I'm not a speculative buyer and will likely be looking to find a home with minor cosmetic upgrades needed before it's make ready. Forced appreciation and steady cash flow is the name of my game.

Jerry, I work with a lot of OOS guys from NY, my advice, come to Columbus, you'll get best of both worlds from a cash flow and appreciation perspective!

2 Reply

Lane Kawaoka

Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes

6y

@Jerry Peng I have an apartment in OKC which I think is a little bigger market than Tulsa. Overall the state of OK is pretty slow growth. At one time when Dallas was going bonkers it was getting a lot of the overflow but now things are little more steady in Dallas if anything.

If you are investing OOS from NY I would take a look at Birmingham, Atlanta, Indianapolis, St Louis, Kansas City, Memphis, Little Rock, Indianapolis, Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets. If you need help let me know.

5 Reply

Jerry Peng

OP

Investor · New York, NY · Member since 2020 · 8 posts · 18 votes

6y

Originally posted by @Lane Kawaoka:

@Jerry Peng I have an apartment in OKC which I think is a little bigger market than Tulsa. Overall the state of OK is pretty slow growth. At one time when Dallas was going bonkers it was getting a lot of the overflow but now things are little more steady in Dallas if anything.

If you are investing OOS from NY I would take a look at Birmingham, Atlanta, Indianapolis, St Louis, Kansas City, Memphis, Little Rock, Indianapolis, Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets. If you need help let me know.

What led you to consider those secondary or tertiary markets? Was it your network or simply those areas having 'good deals'? If it was the good deals, what sort of strategies were most successful there? I typically would like to focus on SFH or Small Multi-families but struggle to find areas that fit the 1% rule anymore that would fit the buy/hold model for most investors.

1 Reply

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

6y

Originally posted by @Jerry Peng:

I've been saving up some money since leaving college and now have enough capital to deploy in buying a SFH/Duplex property. I'm interested in Tulsa after analyzing rent to cost ratios based on zipcode/metro area. Of the top 10 markets, Tulsa was in the price range, had a low enough property tax and didn't have crazy tenant-friendly policies.

I'm looking for some help in hearing people's opinions on the following 3 things:

1. Why exactly is rent rising in Tulsa so much? Are the driving factors macro-economic trends such as fluctuations in the Energy sector, COVID-19, and lower income taxes or is it trends that are specific to Tulsa, such as major company opening up jobs in the area?

2. What are the types of costs that are unique to Tulsa? For example, I've heard wind associated costs on roof are important to factor in when looking at how old a roof is in Tulsa versus say in Arizona.

3. Why are people not buying houses at the same rate individuals are renting properties? Is it due to the types of jobs in Tulsa where it's hard to save for a down-payment, is Tulsa more of a transient city, before moving to a larger city like OKC or Dallas, or is it something else I'm completely missing?

Much thanks to anyone who can give me any information on any of the three above questions.

Just some background info, I'm not a speculative buyer and will likely be looking to find a home with minor cosmetic upgrades needed before it's make ready. Forced appreciation and steady cash flow is the name of my game.

Was Columbus, Ohio in one of your top 10 markets?

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1 Reply

Jerry Peng

OP

Investor · New York, NY · Member since 2020 · 8 posts · 18 votes

6y

Originally posted by @Remington Lyman:

Originally posted by @Jerry Peng:

I've been saving up some money since leaving college and now have enough capital to deploy in buying a SFH/Duplex property. I'm interested in Tulsa after analyzing rent to cost ratios based on zipcode/metro area. Of the top 10 markets, Tulsa was in the price range, had a low enough property tax and didn't have crazy tenant-friendly policies.

I'm looking for some help in hearing people's opinions on the following 3 things:

1. Why exactly is rent rising in Tulsa so much? Are the driving factors macro-economic trends such as fluctuations in the Energy sector, COVID-19, and lower income taxes or is it trends that are specific to Tulsa, such as major company opening up jobs in the area?

2. What are the types of costs that are unique to Tulsa? For example, I've heard wind associated costs on roof are important to factor in when looking at how old a roof is in Tulsa versus say in Arizona.

3. Why are people not buying houses at the same rate individuals are renting properties? Is it due to the types of jobs in Tulsa where it's hard to save for a down-payment, is Tulsa more of a transient city, before moving to a larger city like OKC or Dallas, or is it something else I'm completely missing?

Much thanks to anyone who can give me any information on any of the three above questions.

Just some background info, I'm not a speculative buyer and will likely be looking to find a home with minor cosmetic upgrades needed before it's make ready. Forced appreciation and steady cash flow is the name of my game.

Was Columbus, Ohio in one of your top 10 markets?

Great question. For anyone interested the top ten are listed below and I have copied an image of my spreadsheet as well. Columbus ranked 46th actually based on the data. Anyone who is interested in my methodology or where I got my data (Zillow) feel free to connect with me and I'm happy to share.

1	Memphis, TN
2	Jackson, MS
3	El Paso, TX
4	Winston-Salem, NC
5	Greensboro, NC
6	Scranton, PA
7	Lakeland, FL
8	Tulsa, OK
9	Dayton, OH
10	Chicago, IL

8 Reply

Jerry Peng

OP

Investor · New York, NY · Member since 2020 · 8 posts · 18 votes

6y

Originally posted by @Ben Scott:

Hey @Jerry Peng, I'm a licensed agent in Oklahoma City but lived in Tulsa for many years. They are very similar markets. I know Devon Energy in OKC merged with WPX Energy recently and that eliminated many jobs in the Tulsa market. In fact, WPX was building a skyscraper in downtown Tulsa and scrapped plans. That move may have trickle down effects in the Tulsa economy.

Insurance costs can often be higher in the midwest due to hail storms. In my experience, Tulsa isn't a very transient city. Most people who live in Tulsa were born in Tulsa (or the surrounding communities).

At the end of the day, it's a city that lives and dies with oil and gas.

Ben how reactive do you find the market to be to oil and gas? I'm asking for a lag time between a sustained X number of months of low gas or oil prices and production and when property prices start dropping? For example, if oil production remain low for 6 months then you should start seeing property values reflect that 3 months later?

0 Reply

Ben ScottPro Member

Property Manager · Oklahoma City, OK · Member since 2019 · 579 posts · 351 votes

6y

Great question. I think it's more an issue of consumer confidence. When oil and gas prices are low, people are less apt to make investments. More liable to stay in their existing home than upgrade to a larger home because they're concerned about job security. WPX closing its offices was a big blow to Tulsa, I know. So that makes people in the industry who still have jobs a bit more hesitant to purchase their next home. I don't have any data to back this up, but I'd say WPX closing could dampen real estate prices for the next 6-12 months.

Oklahoma City, meanwhile, is on fire. Lots of out-of-state investors and home owners taking advantage of appreciation. Low inventory and low interest rates have made my market very competitive. I know some investors who are waiting on the sidelines for prices to drop in Oklahoma City.

3 Reply

Account Closed

Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes

6y

Originally posted by @Jerry Peng:

Originally posted by @Remington Lyman:

Originally posted by @Jerry Peng:

I've been saving up some money since leaving college and now have enough capital to deploy in buying a SFH/Duplex property. I'm interested in Tulsa after analyzing rent to cost ratios based on zipcode/metro area. Of the top 10 markets, Tulsa was in the price range, had a low enough property tax and didn't have crazy tenant-friendly policies.

I'm looking for some help in hearing people's opinions on the following 3 things:

1. Why exactly is rent rising in Tulsa so much? Are the driving factors macro-economic trends such as fluctuations in the Energy sector, COVID-19, and lower income taxes or is it trends that are specific to Tulsa, such as major company opening up jobs in the area?

2. What are the types of costs that are unique to Tulsa? For example, I've heard wind associated costs on roof are important to factor in when looking at how old a roof is in Tulsa versus say in Arizona.

3. Why are people not buying houses at the same rate individuals are renting properties? Is it due to the types of jobs in Tulsa where it's hard to save for a down-payment, is Tulsa more of a transient city, before moving to a larger city like OKC or Dallas, or is it something else I'm completely missing?

Much thanks to anyone who can give me any information on any of the three above questions.

Just some background info, I'm not a speculative buyer and will likely be looking to find a home with minor cosmetic upgrades needed before it's make ready. Forced appreciation and steady cash flow is the name of my game.

Was Columbus, Ohio in one of your top 10 markets?

Great question. For anyone interested the top ten are listed below and I have copied an image of my spreadsheet as well. Columbus ranked 46th actually based on the data. Anyone who is interested in my methodology or where I got my data (Zillow) feel free to connect with me and I'm happy to share.

1	Memphis, TN
2	Jackson, MS
3	El Paso, TX
4	Winston-Salem, NC
5	Greensboro, NC
6	Scranton, PA
7	Lakeland, FL
8	Tulsa, OK
9	Dayton, OH
10	Chicago, IL

It seems like you’re not considering stats on if the population is growing or shrinking, employment is growing or shrinking, property taxes, and if its landlord friendly or horribly tenant friendly like NY. You may have had some good cities land in their by accident, but if i was you I’d do more research first.

0 Reply

Rebecca Hevelone

Rental Property Investor · Bentonville, AR · Member since 2020 · 2 posts · 2 votes

6y

@Cassi Justiz

I love Tulsa it’s 2 hours East of me and I’ve spent a lot of time there. I’m from northwest Arkansas. I’d have to say there may be a couple of possibilities.

I do not think it is a transient city. I do feel like the poverty rate is high & crime is very high. It seems to me that there are huge divisions in economic status.

Tesla just opened up in Tulsa, and I read an article that said they’re going to be the new music city. It’s central to a lot of cool things. Each direction there are big cities

2 Reply

Rebecca Hevelone

Rental Property Investor · Bentonville, AR · Member since 2020 · 2 posts · 2 votes

6y

@Jerry Peng

Jenks is a great area if you’re looking to buy homes but more pricey.

0 Reply

Nate Sanow

Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes

6y

@Jerry Peng

Glad to hear that Tulsa is on your radar. There are a lot of great people to work with in the area. I'm here to assist in OOS needs but also would welcome you if something else is a better fit, I'm personally always just excited to see our attention increase.

To respond to your points:

1. I'm not sure where you are getting data on rents increasing, and I'm not sure how much "so much" means. That sounds critical but I'm just honest; I don't think we have high rents, and I have lived elsewhere. There are plenty of articles etc that demonstrate our lower cost of living compared to most of the US, and we are certainly in that list of lowest cost of living. As for the trends, I would admit job growth isn't what we would like, but it isn't stagnant, and unemployment is lower - yes even now in this wild year - than the national average.

I'm not as sure if what job growth we foster is related to simply larger companies as much as it is being very start up / entrepreneur friendly.

2. Yes, insurance is always something to carefully consider. I might add, foundation cost is almost always a thing if you are looking at doing a Brrrr type remodel or a flip. Our soil is largely made of clay and our temperatures while mostly moderate have extreme cold and heat within shorter periods of time. This creates resettling under properties. I've been in many a home where the foundation bid is the most expensive factor in being able to determine a fair offer. It's almost easy to spot, but usually the best course of action is to bring in a foundation company and possibly a structural engineer.

3. I just did a market report on total signed leases recorded via our MLS vs total SFH sales and sales trumped rents by far. Perhaps you have seen growth in some facets I'm missing; I'm not claiming to be all knowing but this point of yours caught my attention. Also the MLS accounts for 90% of home sales but in the leasing world there is likely a lot of non-recorded leases. As for if we are transient, yes, to an extent. That is also an interesting observation. E.G. many of our energy companies have their tie's to Texas and so there is a significant amount of relocation we constantly share with that state.

I've read interesting studies that point to our population migration patterns pointing to slightly greater persons moving to the area than from it. Historically, younger professionals have looked to move somewhere else, not necessarily for economic reasons as much as wanting to live near a beach etc. We often see many of these people come home... I myself am one of them :)

Again thanks for bringing up Tulsa and good luck as you analyze further and begin to nail down your criteria.

4 Reply

Jerry Peng

OP

Investor · New York, NY · Member since 2020 · 8 posts · 18 votes

6y

Originally posted by @Nate Sanow:

@Jerry Peng

Glad to hear that Tulsa is on your radar. There are a lot of great people to work with in the area. I'm here to assist in OOS needs but also would welcome you if something else is a better fit, I'm personally always just excited to see our attention increase.

To respond to your points:

1. I'm not sure where you are getting data on rents increasing, and I'm not sure how much "so much" means. That sounds critical but I'm just honest; I don't think we have high rents, and I have lived elsewhere. There are plenty of articles etc that demonstrate our lower cost of living compared to most of the US, and we are certainly in that list of lowest cost of living. As for the trends, I would admit job growth isn't what we would like, but it isn't stagnant, and unemployment is lower - yes even now in this wild year - than the national average.

I'm not as sure if what job growth we foster is related to simply larger companies as much as it is being very start up / entrepreneur friendly.

2. Yes, insurance is always something to carefully consider. I might add, foundation cost is almost always a thing if you are looking at doing a Brrrr type remodel or a flip. Our soil is largely made of clay and our temperatures while mostly moderate have extreme cold and heat within shorter periods of time. This creates resettling under properties. I've been in many a home where the foundation bid is the most expensive factor in being able to determine a fair offer. It's almost easy to spot, but usually the best course of action is to bring in a foundation company and possibly a structural engineer.

3. I just did a market report on total signed leases recorded via our MLS vs total SFH sales and sales trumped rents by far. Perhaps you have seen growth in some facets I'm missing; I'm not claiming to be all knowing but this point of yours caught my attention. Also the MLS accounts for 90% of home sales but in the leasing world there is likely a lot of non-recorded leases. As for if we are transient, yes, to an extent. That is also an interesting observation. E.G. many of our energy companies have their tie's to Texas and so there is a significant amount of relocation we constantly share with that state.

I've read interesting studies that point to our population migration patterns pointing to slightly greater persons moving to the area than from it. Historically, younger professionals have looked to move somewhere else, not necessarily for economic reasons as much as wanting to live near a beach etc. We often see many of these people come home... I myself am one of them :)

Again thanks for bringing up Tulsa and good luck as you analyze further and begin to nail down your criteria.

Nate,

First off, thank you for such an in depth response to my questions! This is the kind of great information I was looking for!

What I meant by rent rising so much is that rent rose by a higher percentage this past year than almost any other city (From Realtor.com). This is a great thing for investors like myself who are interested in rentals since it helps increase our income without adding to fixed expenses.

What I'm trying to get at, is to understand if the rent increase this past year will last or if it was a spike due to a factor that someone like a local agent such as yourself would know as opposed to an OOS investor like myself.

2 Reply

Tracy StreichPro Member

Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes

6y

As a property manager in Tulsa I can concur that rents are on the rise. Over the last 9 months rent has been going up on all price ranges and time on the market has drastically decreased. There is a shortage of both rentals and homes to purchase in the first time home owner range. Rates being so low allows many new people to purchase homes. These home purchases are often the same homes that would be targeted by investors.

If you ask the average person about WPX they would say "who". While Tulsa is heavily invested in oil and gas companies it is much more diversified than it was 10-15 years ago. WPX was a loss of 350 jobs. The 11 story building "sky scrapper" will be built and quickly occupied by other business and likely some living space as downtown has been undergoing heavy redevelopment.

I have been doing this for 21 years in Tulsa. I have replaced plenty roofs in that time, because of immediate damage from wind or hail. Yes if you have a direct hit you may have to replace immediately but that is why you have insurance. Just factor that cost in and move on.

OKC and Tulsa are very similar. OKC is larger and has more pockets of opportunity. You cannot go wrong with either.

[email protected]918-728-8080

4 Reply

Sofia Sharkey

Property Manager · Kansas City, MO · Member since 2018 · 280 posts · 221 votes

6y

@Jerry Peng I am not as familiar but know one of the most well known turn key companies in Kansas City just expanded to Tulsa. Perhaps @nathanbrooks could provide you more information. Good luck

0 Reply

Nate Sanow

Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes

6y

@Tracy Streich

“WPX who.” I like it.

0 Reply

Nate Sanow

Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes

6y

@Jerry Peng

I gotcha. Makes me want to do a more in depth YOY review to compare to previous years. If I did, would you have interest in a spreadsheet?

That was why I did a cross reference backwards into 2019. There is the phrase “Covid comps” which might apply here, although I’m sure if we ranked #1 per Realtor.com there was already some research that exceeds mine on the subject. I had not yet seen that coming from them so I’m glad you shared.

Outside of 2020, there has been a healthy amount of new development including larger quality MFR as well as smaller MFR's being converted into quality housing which maybe played a factor in this too.

1 Reply

Nate Sanow

Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes

6y

This is just a simple MLS search for recorded leases, trying to copy and paste from a .html webpage link but let me know if you'd want converted to .pdf on this or any similar information I can email you. I ran it back 2 years from today, followed by the 2 years prior at about the same time of year to cross reference. I stayed 10mi within Tulsa. It is basic data but does verify some of what you are saying / reading. Again, I am actually curious how much unrecorded data there is that could skew this a bit.

Market Analysis


Status: Leased (1948)


Avg	3	2	1,412	$1,108	$1,102	.261	99.59%	41	45.593942	1962
Median	3	2	1,281	$995	$995	.189	100.00%	28	29	1960

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Criteria: Property Type is 'Lease'Status is 'Leased'Status Contractual Search Date is 10/20/2020 to 10/21/2018Latitude, Longitude is within 10.00 mi of Tulsa, OK, USA

Search Time: 0.28s

Market Analysis


Status: Leased (1680)
		Beds	Baths	Sq Ft Total	List Price	Sold Price	Acres	SP/LP	DOM	CDOM	Yr Blt


Avg	3	2	1,440	$1,073	$1,065	.255	99.40%	54	66.363095	2007
Median	3	2	1,317	$975	$950	.188	100.00%	42	47	1964

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Criteria: Property Type is 'Lease'Status is 'Leased'Status Contractual Search Date is 10/01/2016 to 11/01/2018Latitude, Longitude is within 10.00 mi of Tulsa, OK, USA

Search Time: 0.23s

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Forrest Faulconer

Real Estate Agent · Oklahoma City, OK · Member since 2020 · 471 posts · 462 votes

6y

Originally posted by @Ben Scott:

..At the end of the day, it's a city that lives and dies with oil and gas.

Good insight, I am curious if you feel OKC is the same way, I am from Oregon but live in OKC and hear the same thing about it being an oil and gas economy. Obviously, with the presence of Devon and other companies this seems to be true. Oregon has a lot of tech and athletic companies to diversify itself economically. I wonder if OKC is doing anything to diversify its economy to help ride out the waves of oil and gas?

0 Reply

Victor S.

WorldWide · Member since 2016 · 1k+ posts · 1k+ votes

6y

Originally posted by @Forrest Faulconer:

Originally posted by @Ben Scott:

..At the end of the day, it's a city that lives and dies with oil and gas.

Good insight, I am curious if you feel OKC is the same way, I am from Oregon but live in OKC and hear the same thing about it being an oil and gas economy. Obviously, with the presence of Devon and other companies this seems to be true. Oregon has a lot of tech and athletic companies to diversify itself economically. I wonder if OKC is doing anything to diversify its economy to help ride out the waves of oil and gas?

Aerospace has a large print (Boeing, Northrup, FAA, Tinker AfB) here as well. Medical is another large field here. I think we're becoming less and less reliant on O&G as time passes, but it's still, obliviously, a large chunk of the local economy. Latest Top Employers list from the Commerce Dept: https://www.okcommerce.gov/wp-...

1 Reply

Brian Orr

Rental Property Investor · Tampa, FL · Member since 2016 · 208 posts · 96 votes

6y

Ok now I'm interested in Tulsa and Columbus. If any of you agents have small MF please feel free to message me...

I live in NC and as for Greensboro and Winston Salem on this list, I'll offer some insight. There's massive growth happening between RDU and Charlotte and it's all straight up and down the I-85 corridor. All of my current rentals are located in this stretch. Value add on market inventory is very low right now like most places, but there are a lot of old mom and pop owners around. Anybody who's interested in the area and willing to put in the work to secure off market can probably do well.

2 Reply

Jon Shoop

Property Manager · Dallas, TX · Member since 2020 · 109 posts · 79 votes

6y

@Brian Orr you should also think of OKC as @Victor S. spoke about. Dallas and Ft. Worth are both very popular for B&Hs... OKC is like a mini Dallas and prices are great.

0 Reply

Brian Orr

Rental Property Investor · Tampa, FL · Member since 2016 · 208 posts · 96 votes

6y

@Jon Shoop - works for me. I'm wide open to opportunities @Victor S.

0 Reply

Ben ScottPro Member

Property Manager · Oklahoma City, OK · Member since 2019 · 579 posts · 351 votes

6y

OKC is relatively hot right now. I say relatively because it's mostly a linear market and prices don't fluctuate that much. But we're seeing some of the highest contract prices in a decade and much of that activity is from out-of-state investors. I'm working with investors are starved for deals but are having a tough time getting anything under contract at prices they did a few years ago.

1 Reply

Investing in Tulsa, OK as Serious OOS Investor

Investing in Tulsa, OK as Serious OOS Investor

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