Newbie investor who is looking into investing out of state

[Gurmanpreet Singh]

Hey BP family!

I am a newbie from Sacramento, California and have been trying to educate myself through podcasts and books. I am currently 21 years old and have been trying to save up money so I can invest into a rental property.

I have learned that California is a state where rental properties that cash flow are tough to find. So I have been looking into out of state markets that I can invest in since properties in California are expensive.

I have been also looking for multi family properties in Sacramento so I can house hack and get my feet wet with real estate investing. I don’t know if I should find a multi family and house hack first or if I should look into something that is out of state. Let me know what you guys think is a smarter thing to do to start of with.

I also want to connect with more real estate investors in my area and out of state that will give me pointers and advice that will help me get started.

Thank you,

Gurman Singh

[Remington Lyman]

Originally posted by @Alex Rodriguez:

@Gurmanpreet Singh Im also here in Sacramento and found the same issue. We are in an expensive market and I also questioned buying out of state. I even drove cross county out to Ohio, Missouri, Indiana, etc. Basically all the markets everyone on here mentions daily. What I found is you will have to vett every single thing someone tells you and the places to invest in. For example Everyone talks about Cleveland being a great place to invest which, It is. However, If you choose the wrong location or dont know about the location you will be in deep trouble. I decided to do exactly what you want to do and that is to house hack here in sacramento. Ive been living with roommates with monthly expenses down to 600-700 a month with every single bill i have. Everything else is saving towards real estate down payment. This last december I bought a "primary" (brother  and GF is roommate ;) residence out of sacramento with  5% down and paid 148k and Im now in contract on a 4plex and will be moving into that and cashflow 600 initially and 1600 after increasing to market rents. Keep learning and analyze deals and be patient, It will take some time, but most importantly dont get analysis paralysis and pull the trigger if you are able to. If you would like to ask questions or connect, Im happy to help. 

 It becomes easy to fack check your Realtor when you have your complete team of Core 4 rockstars. You need a Realtor, Property Manager, Lender, and Contractor. I tell every out of state investor that is interested in Columbus to build this team out ASAP so they can move with fluidity.

[Alvin Taveras]

Great question and I love the conversation that it has started. 

I know I'm a bit late but for out of state investing, my team and I have been very busy with Build to Rent - Single Family Homes in SWFL. Yes, other markets can offer larger returns but I personally like investing in a growing market. There is a sense of security of knowing the property value will likely keep going up and rental demand will only get stronger.

● Prices from $206,900
● Great Long-Term Steady Cashflow
● Cap Rates in the 6-8%
● Management starting at 6.5%
● Financing available - End-loan only
● No Repairs / Low Maintenance
● No construction funding needed

Let me know if I can help in any way. 

Website: CapeCoralInvestorNetwork.com

[Sherwin Gonzales]

Hi @Gurmanpreet Singh,

Congrats on starting your journey in the world of Real Estate Investing! I wished I started out as young as you! I live in the Bay Area and have a lot of commercial multi-family investments in Sacramento. Yes, my team and I are one of those few who do invest in California and have had success doing it. While it's true, as many have already said over this thread, that California is a state where it's hard to find cash flow, but appreciation is better here when compared to other states. And yes, as some have already mentioned, appreciation can be speculation and might not be the best strategy.

I, however, have a different mindset. I invest for WEALTH, rather than cash flow. The properties we buy enable us to FORCE APPRECIATE the property and increase its NOI. And unlike residential properties. commercial properties are valued based off their NOI. That's why I love commercial multi-family. We've value added and value managed properties at a state where they actually do cash flow. However, those same properties in less than 16 months, we decided to sell because the capital we gained as a result of the forced appreciation would take 20-30 years to gain if we kept for cash flow. And, we can use that capital to get more properties!

So it all depends on your current goals right now. I think house hacking is a great way to start. You can even get a SFH in Sacramento and rent out the other rooms to friends to get your feet wet. Another option is to partner up with others and learn off them to mitigate the risks and share the rewards.

Good luck and enjoy the journey! I hope this helps!

[Gurmanpreet Singh]

@Roxanne Quane

That is the plan A for me right now, house hack and then invest out of state. Thank you for reaching out, I would love to connect and ask more questions!

[Gurmanpreet Singh]

@Mitch Smith

Hey Mitch,

That’s very impressive and I aspire to connect and create a team of mine soon as well. I’m in the search of still exploring different markets and as well as trying to find a opportunity to house hack. I would love to connect with you and gain some knowledge from your years of experience. Thank you for your time!

[Gurmanpreet Singh]

@Alex Rodriguez

Hey Alex,

That’s super impressive! It’s super cool seeing investors out of Sacramento doing well in their investing careers! It allows me to have more confidence and motivates me even more and and shows me that it can be done. I will be attending sac state and I am currently looking for 4plex as well that will allow me to House hack. I would love to connect with you and pick your brain. Thank you so much for your time!