Rental Property Investor · Broomfield, CO · Member since 2017 · 64 posts · 40 votes
I have few single family rentals in Colorado and now thinking about getting into multi family rentals. I have access to about $100k HELOC + $25k cash to get this project going? My goal is to hold and generate passive income (cash flow). Colorado real estate is getting expensive. I appreciate any advice on possible places out of states where I can start looking into and network. Thanks
Investor / Syndicator · Austin, TX · Member since 2015 · 367 posts · 220 votes
7y
If you're looking for 2-4 unit, residential properties, I'd focus on OK, MO, TX, FL. Do research on the RE brokers and agents who do the highest volume in the cities you want to be in. Call them up and interview them. Also ask about quality property management. You'll need that for out of state investing. For 5+ units, well, I'd say skip everything from 5-100 units if you're out of state, unless you can do the deal yourself and find a good deal and a good management team. Go into a syndication with a seasoned sponsor team. Don't just look at multifamily which is getting very pricey, even in these states mentioned above. Look at other asset classes and experienced partners in those spaces. It's a trust business. Don't hesitate to get on a plane to meet a business partner, sponsor or whomever you're intending to do business with.
Investor · Front Royal, VA · Member since 2013 · 586 posts · 418 votes
7y
@Thomas Wang hi neighbor! Where are your rentals here in Colorado?
The expense of Colorado's market was what initially made me start looking out of state. Seems like you have an idea of what you want to be looking at. Are you looking for passive investments or looking to actively purchase and manage?
For active, i'd recommend Kansas City, Tulsa, Oklahoma City, and a few others. Cash flow is great and entry point is low.
For more passive investing, i'd recommend getting hooked up with a good sponsor and investing in multifamily syndications. Take it with a grain of salt (it's what I do), but the returns can be great and the time investment is low.
Investor / Syndicator · Austin, TX · Member since 2015 · 367 posts · 220 votes
7y
If you're looking for 2-4 unit, residential properties, I'd focus on OK, MO, TX, FL. Do research on the RE brokers and agents who do the highest volume in the cities you want to be in. Call them up and interview them. Also ask about quality property management. You'll need that for out of state investing. For 5+ units, well, I'd say skip everything from 5-100 units if you're out of state, unless you can do the deal yourself and find a good deal and a good management team. Go into a syndication with a seasoned sponsor team. Don't just look at multifamily which is getting very pricey, even in these states mentioned above. Look at other asset classes and experienced partners in those spaces. It's a trust business. Don't hesitate to get on a plane to meet a business partner, sponsor or whomever you're intending to do business with.
@Mike Krieg has great advice above. The only thing I would like to add is that you should take some time to get educated on how multifamily works if you are planning on participating in or arranging a syndication. Even on the LP side as a completely passive investor, you should have enough knowledge to know what to ask the sponsor and be able to vet their deal to make sure there are strong odds that you will get the returns they are projecting. Feel free to message me if you have any questions. I am happy to help if I can.
Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
7y
@Thomas Wang if you asking about Multifamily 2-4 units, there is always affordable area with an hour drive no matter where you are.
If you are thinking about commercial properties (5+ units) Midwest is a good cash flow area. I know a lot of people from west coast invest in Arizona and Oklahoma. Once you are settled on the area - Start looking at loopnet and getting in touch with brokers.
Let me know if you need more info on any of two cases
Rental Property Investor · Broomfield, CO · Member since 2017 · 64 posts · 40 votes
7y
Thank you all for your valuable advice. I need to do more research about participating in an investment group VS. buying a multifamly commercial property 5-12 units as next the step. I would be grateful if anyone is willing to talk on the phone or connect me to others.
Rental Property Investor · Tampa, FL · Member since 2015 · 1k+ posts · 969 votes
7y
Hi Thomas,
If you goal is to generate passive income through MF, your best bet is to either invest in an apartment syndication. Good returns with minimal time ongoing time investment. Returns may be lower than doing a deal yourself, but since you are investing with an experienced operating, the risks are reduced.
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
7y
First off, don't think about expensive markets always being a bad thing. Look at the deals and determine if you can cash flow. Think of this. If you rent out a 1 bedroom for $500 vs $1000 and have a 3% increase in rent you will now have a $15 increase vs a $30 increase. Do that over a decade and you will see a massive difference. Apply that same philosophy to the value of a building. If you feel you must go elsewhere, then check out these 2 articles: