San Diego / Sunnyvale CA, Aspiring Real Estate Investor (out of state)

[Matt B.]

Hi everyone,

My name is Matthew and I am currently living in San Jose, Ca.  I am originally from San Diego, Ca.

I have been interested in Real Estate investment for about 3 years and currently own 1 SFR rental in San Diego. Every day I feel more and more inspired to add to my portfolio and build passive income. I have 1-2 years before my wife and I start having kids so I want to real estate invest now (pending good deals of course =) ).

My real estate goals are to acquire small multi-families (and maybe SFRs) out of state, in order to reach my goal of financial freedom (100k / year passive income).  California is not an ideal market so I will be looking at different markets over the next few months and aim to start my next stage of investing in March / April 2015.

I am new to out of state investing (and went to school at Cal Poly, San Luis Obispo where the motto is "learn by doing") so I want to spend a minimum of a few months in my desired market, personally building my team and portfolio.  I can then learn the process and invest remotely in the future.

After determining my ideal market, I am heavily considering 2 options.

1) Leave my current engineering position, move to investment area for 1-3 months and use my HELOC / cash to buy a few properties (2-4 properties). Return to work and refinance afterwards.

2) Find new job in the investment area, work full time and be able to use bank financing to buy more properties (6-10 properties).  Remain in the area for minimum of 1 year.

The other option is investing remotely as a newbie but I am not too comfortable with that considering I will need to put a lot of trust / faith in people I have little prior interaction with.

If anyone has done anything similar or has any advice on my options / potential markets for me to look into for April 2015, please contact me or leave a post.

Thanks!

[Isaac Rowe]

As a general rule of thumb in the city of Cleveland 750-900. Suburbs are generally around 900-1200 but cost a little more.  Of course their is a lot of variation, but that is the range I see a lot of cash flow buyers looking for.  In my opinion the suburbs tend to have the better long term value even if Cashflow numbers aren't quite as good.  

I have worked with a lot of investors in the Cleveland area.  The 2% rule is definitely attainable here.  Cleveland is a very diverse market, and there are a lot of options here, so you want to be very careful who you work with. Not all of those options are good just because they hit the 2% mark.   There are plenty of properties in the suburbs of Cleveland in solid areas that meet the 2% rule. 

I know people are also buying in Indianapolis, and Kansas City as well with similar results.  I always recommend that if you are going to invest remotely that you to fly into the area, for at least a day or two, and get a feel for what your comfortable owning.  Most of the people I work with do invest remotely.  

If your planning on using property management then you don't necessarily need to move to the region your buying in.   With all the research you can do online these days, you can verify that your not being lied to or mislead fairly easily.