Need investment strategy advice

[Shone Freeman]

I live and have invested in San Jose, Ca. I have a number of properties (SFHs, duplexes, condos, and a commercial property) here which have appreciated nicely and now cash flow well after many years. I also have a SFH in Bakersfield which has not appreciated and is under water on paper-but does cash flow for me so I just keep hanging on. My goal was to add a property to my portfolio every other year, which I have been able to do.

Investing for appreciation has always been my strategy due to where I live. I didn't really need the cash flow due to my occupation and didn't mind a break even or slight negative in order to achieve the appreciation. I have been doing this for a long time, in one way or another since I am a construction contractor.

I still don't need cash flow to live on, but since it takes so much money to jump into another property here, and I think the market here is closer to the top than the bottom, I am looking at other areas. Also, I am reconsidering my strategy going forward.

I have been checking out Indianapolis, Texas, Cleveland, Kansas City among others. There are pros and cons to going out of state.  Turnkey investing may solve much of the cons. But, it seems like by buying a turnkey, you run a good chance of buying a property at retail market price or higher, which means it may not appreciate for a long time, and unloading it could be painful.

I have about 150k saved up to invest at the moment and am looking for a good balance of CoC return and equity appreciation.

I would not plan to live off of cash flow from my investments for 10 or more years. So, what areas do you see that have good appreciation mixed with decent cash flows?

Are turnkey investments a good solution?

Would you recommend turnkey multi family, 4 plex or more?

Should I cash out refi some property here to leverage into another bigger deal?

I'm sort of stuck...

[Mike D'Arrigo]

@Shone Freeman I'm in San Jose also. We sell turn keys in both Kansas City and Indianapolis and as much as I love both for cash flow, I have to say that they are generally not high appreciation markets. Although they have been seeing strong appreciation for the last couple of years, that is not the norm. If your goal is appreciation as it has been in CA, then the Midwest is not for you. Even TX may not be a good choice for you if your goal is appreciation. Dallas of course had a very strong economy and although it is seeing very strong appreciation now, that is not the norm. I'm really puzzled why you are considering these markets if your primary objective is appreciation combined with some cash flow. These markets offer the opposite of that. Now if you want strong cash flow combined with very moderate appreciation, Indianapolis and Kansas City are two great markets for that. I'd be happy to talk to you more about that.