Should I invest stateside or try out of state?

Question

Hello friends i’m currently trying to get ideas of what to do next, ￼i bought my first house in 2018 for $268k in Utah, that I House hacked for a year and then sold it and bought my second property 45 minutes outside of Utah county￼ for half the price￼ $141k ￼that i house hack as well, i’m just lost and I need some input on what I can do next any suggestions would be much appreciated thanks everyone:)

Ronan Donnelly · Answer

@Hayden Smith, congrats on your two deals thus far. In terms of deciding what to do next why not take some time to wrote what your goals are (time, money, contribution, skills, etc) and then reverse engineer from there. E.g. if your goal is to own 1,000 doors then you may want to consider multifamily, if you goal is to be entirely passive then you might consider being a LP in a syndicate, if your goal is to self manage then you will likely buy close to home, etc.

Focus on one strategy, go deep, build relationships and dominate that space. Good luck!

Whitney Hutten · Answer

@Hayden Smith Ronan hit the nail on the head.  What are your goals?  However, I would back up one step and figure out your WHY.  Why real estate?  Why passive cashflow or active income? Spend 30 minutes (or longer) tackling that question because that will inform your goals.  You want to make sure your goals are lined up with your WHY before moving on.  I work with many people who jumped into goal setting and skipped the why step and we spend quite a bit of time reorganizing their investing roadmap (sometimes repositioning whole portfolios to get them the results they actually desire in life).  A good example is someone who gets into active flipping and they want more time with their family... flipping is fine if you have a path to reinvest that income into passive assets... not fine if you are living off the income because you now have another job.  So here is a little cheatsheet:

1. WHY

2. Goals

3. What time do you have to put towards your investing?

4. What investment strategy(s) align(s) with 1-4?  Focus on 1 strategy first.

5. Now we are ready to start building an investing roadmap....

Hope that helps!  PM me with Q's.

PS... If you can keep house hacking in some form or fashion that would be an amazing wealth generator!

Alora Glaze · Answer

@Hayden SmithHard money is usually the best way to go if you have a property with good numbers and solid appreciation - as those lenders will be much more focused on the value of the property itself rather than your personal finances.But don't be afraid to step outside of your market. A lot of investors can create passive income by being out-of-state although it does require more networking and thorough vetting of the team you work with.Getting yourself connected to a local realtor who is familiar with the investing market will then hopefully allow you to connect to boots-on-the-ground teams and property management companies who can protect your asset(s) and your interest.Right now, the mid-west markets are doing really well - you can stretch your dollar further as property is typically cheaper but still allows you to hit a great ROI with the right homes in the right areas (this is where your connections come in).Social media, like Facebook, BP, and Instagram will give you insight in narrowing down what markets may interest you most - some of these can be hard to get into so utilizing social media to your advantage to grab off-market properties in appreciating neighborhoods will be key.Best of luck to you!

Casey Christensen · Answer

@Hayden Smith First, way to go on getting in the game and house hacking. am sure that has been a great learning experience and has given you a good start into RE investing.  I also want to just second what @Ronan Donnelly said. The beautiful thing about real estate is there are so many ways to build wealth and make money. What are your goals? Do you want real estate to replace your current job, or do you want to do it on the side? Do you want to be active and buy SFR or small MF and manage yourself? If you want to be passive then the LP in a synidcate can be really powerful. If you go that route you will want to get out and start meeting sponsors. A lot of time they are looking for accredited investors for reg D 506C raises, but there is also a large group that do reg D 506B raises. For the 506B opportunities you do have to have a relationship with the sponsor and they cant advertise so  you have to get out there and meet them. Good luck in whatever direction you go, and if I can ever be of assistance to you in any way let me know.

Nathan P. · Answer

Hey @Hayden Smith,

Thats awesome to hear you are getting out there and making transactions happen. Based on what you have done already I am guessing you like the long term appreciation and cashflow approach to real estate investing.

I dont have any information on how you acquired your other properties or what your financial position so take my advice as "what I would do" advice.

You just bought a home that you put down between 5-20% so it probably drained you a bit. The quickest way into your next cashflowing property would be to follow the method many refer to as the BRRRR method (Not sure how many R's go on the end). The idea is to get into a property with a short term loan and then force some appreciation by making needed repairs and updates and then refinancing for the longterm with a traditional mortgage. If you can get the numbers to work out where your all in investment is less than 80% of the appraised value the you can come out of the refinance with no money left in the deal and ready to go do it again.

Best Wishes!

Lane Kawaoka · Answer

Live where you want invest where the numbers make sense. Where the 1% Rent-to-Value Ratio of more than 1% is needed to be able to cashflow after expenses. Especially in the top of the market.

Hayden Smith · Answer

@Whitney Hutten guys this has been absolutely amazing advice thank you guys so much i’ve listen well over 1100 hours of biggerpockets podcast, but nothing helps more than connecting with like-minded investors!! I do have more questions for all of you guys so thank you.￼￼￼

Hayden Smith · Answer

@Nathan P. Wow thanks Nathan I needed that!! So you are talking about trying like private money or hard money I can try, and they refinance into cheaper money? Really good advice.

Vick Galu · Answer

@Hayden Smith ahhhh i see, im honolulu hawaii i do wholesaling here, slowly looking into the virtual investing world for FL and Cali.

Hayden Smith · Answer

@Vick Galu I mainly Im just looking for opinions on where to go next if people have any suggestions, where do you invest primarily!? ￼￼

Should I invest stateside or try out of state?

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