newbie, cash investment, which market for cash-flow?

Question

Hi everyone,

I want to invest out of state for long-term cash flow. However, I'd like to centralize my investment and I'm probably going to buy with cash. Thus, which markets am I likely to find good deals under my current status? I don't care so much for high appreciation, my minimal standard is that it doesn't depreciate.(i.e school ratings, populations, crime rates)

Also, do you think it's better to buy a whole bunch of SFH; or to go straight for multi-units? I personally can't be there to fix and manage; so which is more feasible for long-term holding?

Ali Boone · Answer

Riverside! You aren't too far from me. I only buy out-of-state myself and won't buy anything needing any work either. As far as what markets, my personal recommendations for cash buys and long-term cash flow would be Atlanta, Dallas, Houston, or Chicago. There are a lot of other markets that are good, but the highest quality stuff I've seen are in those. High quality is what will lead to the long-term cash flow. Lower quality will just cause more problems and headaches and can easily mess up the cash flow.

Paul Timmins · Answer

@Vivian C

Welcome.

Check out the Start Here page http://www.biggerpockets.com/starthere

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. You can also do this for the out of state areas you are looking at.

Search IREM.org for property managers ARM certified <50 units, CPM certified for >50 units. Call 5 different ones ask them what areas of the city they like and dislike and why. See what they see expenses running by category per door. Ask the market vacancy rate and what they see properties selling for per unit.

In CA Highest and Best use works well, consider Specialized or Niche housing rents can be 2-4 times. I spoke to a buddy in CA the other day she has a large Victorian rents per bed to tourists HUGE return.

Good Luck

Paul

Vivian C · Answer

Hi Cuong, It's good to see another newbie like myself here, hopefully success will come to us with the pro advices and our own hard work. :)

Vivian C · Answer

Yes, the market here is pretty crazy with the amount of investors, so the cash-flow is not that great. I'll look into what you said, thanks!

Cuong Thai · Answer

@vivian
Hello Vivian,
Welcome to BP.  I am not that far from you and a newbie myself.  I have a rental property out here in the IE.   I am also looking at the market in Dallas and Houston as well.
I think we need to read and learn more from these pros.  The housing market is slowing down. I don't see any activities like 3 months ago around here.
Take care,

James Tran · Answer

Hi Vivian,

If you want long-term cash flow with very little management, you may also want to look into commercial properties, such as those that are long-term absolute NNN leases (i.e. Walgreens, fast-food credit tenants, etc.).  There are a lot of foreign investors for single family in my area (San Gabriel Valley), as well as in Ontario, Riverside, etc. who are driving up the market very rapidly with cash purchases and little due diligence.  I know many people trying to buy their first homes in these areas that don't stand a chance with conventional financing.

It sounds like you may just be looking for relatively safe real estate investments with little to almost no management responsibility, especially if you're looking to go out of state.  If so, national credit tenant NNN properties might be a viable alternative for you.  You wouldn't need to worry as much about whether those out of state property managers or brokers are looking out for your best interest.

Account Closed · Answer

The Chicago area has a ton of "Pure Cashflow" opportunities. There are a few areas I would avoid, just wanted to be sure that people knew Chicago was a solid area. Remember Chicago is a huge metropolitan area, so I speak of the entire area, not just the city.

Engelo Rumora · Answer

Hi Vivian,

There are great opportunities in many areas of the US. Make sure that wherever you buy you have the right team on the ground looking after your best interests.

Thanks and have a great day.

Vivian C · Answer

Yeah, I started in Riverside because I'm familiar with the surrounding neighborhood, the cash flow is acceptable but just thought I'd add more pure cashflow properties.. Thanks for pointing me the markets. I'll start researching these areas you mentioned :)

Vivian C · Answer

Thank you for your sincere advice, I will keep it in mind and approach cautiously.

newbie, cash investment, which market for cash-flow?

Most Popular Reply