San Diego vs Oklahoma City?

[Ryan Ford]

Here's the deal. I am a younger entrepreneur (32) I own a construction business, car wash and a mini storage facility. I am moving to the San Diego area this summer when my GF finishes her RN. We have family out there and want to experience something new. 

Anyways, my issue is this. Through my connections here in OKC, I can buy brand new SFH's that are very nice. I can get them under $150k and they will cash flow around $700 a month. That includes vacany/repairs, property taxes, management company and insurance. I will be back in OKC at least 4 or 5 times a year for my other businesses.

However, I can buy homes in certain parts of So Cal that should generate similar returns. I like the idea of diversifying my portfolio in another state and being close to these investments. I also know the California real estate market can be a little volatile, which could work in my favor if a large spike goes up. However, a crash concerns me. It would be all about getting the right buy. Not sure what to do? Thanks.

[Aaron Mazzrillo]

Originally posted by @Rhett Tullis:

i have owned multiple rentals in LA and in OKC.  I can tell you from my experience that your return in okc will be much higher than in LA/SD area.  In OKC your appreciation will be super low but your risk is also much lower.  There are several that will chime in on this and say that west coast is the only place to invest but you will find thousands of investors here in okc getting great returns on their investments here.  Also taking your example think like this

OKC -150k house rents for approx $1200 (i am being very general you may get more) with 25% down you have 38k tied up in the house

SD - 400k house rents for double so $2400 with 25% down you have 100k tied up

First off, why would you buy in San Diego when there are cities all around San Diego that are priced much more advantageously, and those cities are much closer than a plane ride away. Also, your return is higher in OKC? I highly doubt that. I regularly buy houses here in SoCal that cash flow quite well. One just can't shop retail. I recently closed a 1,100 sq/ft 3/2 SFR that I paid $99K for, I got 100% financing at 7% from a local, but very well known hard money lender, and it will rent for $1,195. The game changer is that it appraised for $180K and we all know that there are actually 3 certainties in life; death, taxes and that eventually, ALL real estate must change hands. So, you buy your OKC house and make the same return I get and ten years if you have to sell, hopefully you get little more than what you paid, or you invest in California, get about the same return you'd get in OKC, but when you sell, you'll have the opportunity to take one huge a$$ check home from the closing table. I like cash flow, but I'm in real estate for the long game.