Out of state investing in Houston from California

[Derrick Lin]

Hey BP community,

Since my first introduction post in BP 3 months ago, I've been reading books and BP, as well as listening to the podcast, educating myself and formulating my strategy. Although I've built up a decent amount of capital through the stock market, my money doesn't go very far in the San Francisco area, nor do the numbers make sense. However, one of my good friends is moving to Houston soon so I introduced him to BP and pitched him the idea of partnering and exploring opportunities in Houston. I've done some analysis and so far, even with retail prices, it looks like we have a good chance of cash flowing there.

My partner hasn't moved to Houston yet so I wanted to supplement my market research with some questions for Houston natives here first.

Our target market is single family homes under $100,000 in B class neighborhoods. Does anyone have recommendations for areas to look into? Bad neighborhoods to look out for?

[Cody L.]

I live in San Diego and own exactly 0 income properties here.  How people buy apartments in San Diego at these prices boggles my mind.  I was just told of an 8 unit near my house for $3.4m.  That's $1m more than my 80 unit I bought in Houston that has a $40k/month rent roll.  Why would someone do that?  (answer, because people like San Diego.  Though since they don't LIVE in the apartments, I don't get the same 'location location location' drive.  But whatever.  To each their own)

So yeah, buy in Houston.   It's brain dead easy to find deals that make sense.   It is harder with single family homes but still possible.   I have a few that are in the ~100k range that rent for ~$1,300.  They were the first two income properties I ever bought (before switching to apartments) and I still have them.  One is in Kingwood and one in Dickinson.  I couldn't even point those places out on a map.  :P