All Forum Posts by: Becca F.

@Miguelli Fernandez

I totally agree with @Nicholas L. and @Travis Timmons. If I were you I wouldn't take out a HELOC against your primary to buy OOS in a market you don't know well. The LLC issue is insignificant compared to the buying Class C section 8 or possibly Class B in an unknown area.

I didn't buy in Cleveland but I bought in Indianapolis. I even lived in the Indianapolis area so I knew the market, now more to a detailed level. I've lost money in cash flow on paper Class C and posted many times about this and I go into a lot of detail. So many things have gone wrong. I've been taken advantage of financially of, 2 properties broken into, etc - being 2000 miles away is a huge negative. 

I can tell you numerous stories of CA investors that I've met at meet ups who have lost money OOS, especially Class C. It's a gamble unless you're experienced and know what you're doing. I decided to stick with adding value to my CA properties. I'm not trying to squash your dreams but have lots of cash reserves if you decide to proceed. 

Not sure if you're in the Bay Area or SoCal but there are lots of RE meet ups and you can talk to investors who invest OOS and may give you other ideas to mitigate the risk. You're just going to get spammed by agents on here because you said the magic words "I'm in California looking to invest OOS" 

Feel free to DM me if you have further questions :) Good luck.

A recent open house I went to started as a RE meet up by the facilitator who is an agent. The agent is an investor locally as well as out of state with a substantial portfolio in LTRs and STRs. He also knows landlord tenant laws well and has helped me problem solve. The open house was a flip, really nicely done - had it been 2018 or 2019 I think this home would have gotten multiple offers listed at just under $2 million but I don't think as many people want to live in San Francisco as pre-COVID. Everyone is moving out to the suburbs. 

This is a rare agent and also rare are the local agents I meet who aren't trying to push me to sell my Bay Area property to get a commission off me. That shows a lot of integrity to help me problem solve tenant issues, whether or not to value add to increase my rent, how much to increase the rent (in non-rent controlled SFH), etc instead of "why don't you just sell the house?" These agents will get referrals from me for my CA investor friends (including the ones messaging me on BP asking for agents).

Quote from @Nicole Koch:Hi!! I have lived in Peru for 17 years now. I have 5 kids and feel safer than in the USA. I live in the Sacred Valley and have lived in Cusco. I wouldn’t consider Lima safe but it is a big city. The cost of living is very low although property cost are high. Rent is low though. I’m not worried about getting arrested here and no one sues ever in this place. The food here is very good and healthy and mostly all local. There is a very big expat community and the locals here are very kind to foreigners. My kids move around by themselves in public transport and enjoy a simple life. You would want either an online job or a nest egg as working for someone here doesn’t pay well at all. You could open a business as well. The down side to Latin America is that the government can change at any time leading to civil unrest. I would not say that this is extremely dangerous for foreigners but can really affect your life or business. South America is great if you choose a safe area.

Richard’s class was around 4500 usd and includes a 5 day master class. Once a week classes, replays of everything and past classes. Educational material of all kinds including leases, contracts, deal calculators, write ups and additional classes. One on ones with him are additional costs and I have not done that. I am still sifting through the current material! 
Good luck!!

Thanks for sharing your experience in Peru. That's great that you and your kids have a great life there. I feel like I'm in a rat race with my W2 job and trying to find deals in real estate and generate other income (stocks are my current choice). I have a decent RE portfolio, nothing like many of the experienced investors posting on BP.  I live in one of the most expensive areas in the USA. Although it's great here with weather, proximity to mountains and the Pacific Ocean. being close to family and friends but I'm constantly stressed out.  The wake up call was two colleagues dying and they didn't even get to enjoy retirement after working for 30+ years. 

I was thinking Mexico City since it's a 3 hour flight away. I've also heard this that Latin American countries are generally welcoming to people from the USA. Some Asian countries also have a low cost of living but I looked them up and you need a work or study visa and the requirements are much stricter than Mexico. 

Are you allowed to own property in Peru? Are the property costs reasonable compared to the USA even though it's high in Peru? 

Quote from @Travis Timmons:

@Becca F. you and I both have been around long enough to know that the deal that gets touted at closing is far different than end of year actuals. Rent being $300 more than PITI is not cash flow of $300/month.

And the $2400/month cash flow is probably a short term rental that started in peak season. For example, one could cash flow $2400 on a $200k purchase here in Maine if your first month was July. The $600 heating oil bill + little to no rental income + PITI in January will balance your actual numbers out for the year. There's just always more to the story, and there is no easy money as I see it.

For this guru, I watched over 8 videos of her client testimonials until I started getting a headache lol. I'm not sure where she is getting $2400 cash flow from - could be duplex or something. Most of her students are buying LTRs. I hear very little mention of STR maybe a few MTRs. Recent claim of her student $500 cash flow with $133,000 purchase price in 2023. On some of these reels, it says "cash flow after fixed expenses". I agree that there is more to the story and information is left out.

I just think it's not 100% transparent when this person is saying $150,000 gross rental income and won't answer what is the net rental income. My gross rental income looks pretty impressive and here I am working my W2 job, to say nothing of the losses incurred each month on my Class C Indy house. And the potential CA investor that I referred to an agent who's trying to push a $10,000 coaching program - I thought that was a little shady. 

Good old capitalism in the USA  - I'm considering starting a course charging a fraction of what they charge but I hate being on video. If it weren't for RE, I wouldn't be out there talking to so many people. I'd be working quietly by myself in a research lab or in front of a computer. 

One of the commonalities is that all these social media gurus like to hear themselves talk. It's the same videos posted over and over again on Instagram (I don't have TikTok but I imagine it's similar). "I'm a RE, finance expert (stocks), etc"

I've attended many open houses in my local area and interacted with a lot of agents, in California and OOS. I'm in disbelief about the lack of knowledge - I'm not an agent. For example in wildfire areas here, buyers aren't able to get traditional homeowner's (or rental dwelling insurance if an investor) insurance and conventional Fannie Mae and Freddie Mae loans. They have to get non-QM loans and pay high insurance rates. I mentioned this to 2 agents and they looked at me like I was a space alien. 

Next time I go to an open house, I'll ask one of them if I were to buy this as a rental do you think it would work as an LTR, MTR or STR and what's the cash on cash return and median rent in this neighborhood. I don't think most of them know anything about landlord-tenant laws which varies by city in the Bay Area. Even investor-friendly agents (I dislike this term, not sure how others feel about it) have been incorrect on some of things that were stated to me.  As far as OOS, that's whole other story 

Quote from @Nicole Koch:

I am in the class and do enjoy it. I feel like I have learned a lot. I like being able to replay the weekly classes or hear ones from months prior to starting. I am using all his advice for doing due diligence on properties before buying, using the deal calculator to run numbers and looking for good market strategy areas. 

A thing I really like about Richard is that we fundamentally agree on most things. I live outside the USA so that my money stretches further, I have better food, better lifestyle and I am out of the rat race in the USA. I am looking to get another passport and prefer my kids to grow up in Latin America where values are more consistent with mine. I agree with his way of life and connect to it on a level where I prefer to support him and his family and learn from him. 

I recommend his classes.

I dislike the threads within a thread so I deleted the previous comments - visually it looks a mess. 

I'm also considering moving out of the USA if I'm unable to find a state with a lower cost of living and less stress (commute, crowds of people, high taxes, etc) than California.  I'm considering specifically a Latin American country after I do my research and fly there several times to visit for extended periods  - I speak and read enough Spanish to get around although I'm not fluent or highly proficient. 

Do you feel safe living in another country and what about the laws there (e.g. being wrongly arrested and imprisoned vs. in the USA there's at least due process and our Constitutional rights)? 

Can you share with us how much Richard's class costs? 

Great comments. I attended a real estate conference (not a local meetup) and I was told by a CPA I couldn't deduct the flight, hotel stay and meal costs. I've attended many local meet ups and haven't deducted any costs or kept track of mileage. For context, I have a W2 job which isn't related to a real estate trade.

If I'm traveling to my out of state rental properties to walk the properties (including potential properties I may consider buying), meet with agent or property manager, etc, am I able to deduct the flight, hotel, rental car and 50% of reasonable meal costs (not a $500 dinner) or food costs (e.g. I run into a store and buy a sandwich and drink)? 

@Cory Kleiman Welcome to BP! I invest in the Bay Area and the Indianapolis metro area. I don't know much about areas you're interested in but I think there are some general guidelines that apply to many markets. I've done a local renovation and even attempted OOS offers to BRRRR and flip... hard pass... the renovation costs ran way over and the ARVs were very optimistic. Network with local investors in the areas you're interested in, someone unbiased who isn't trying to sell you anything. Get to know what areas are Class A, B, C and D in the markets you're interested in.

I think mid-term rentals could be a good approach in the right market. I would run your numbers using long-term rents. 

As far as OOS investing, I've had night and day experiences in the Indy area. I've posted many times if you skim through some of my posts. I've lost thousands of dollars and I did several things to mitigate my risks including flying out to Indianapolis - I used to live in that area until I moved back to CA so I didn't pick a random market. 

Feel free to DM me if you have questions :) 

Ryan if you were posing this as a general question for most beginning investors, I would say buying close to home such as house hack or within a 2 to 3 hour drive to reduce the risk that's involved with OOS investing. I don't think it's the best approach to chase "hot markets" far away if someone is not willing to take on significant risk. If that was the thinking, now I'm mad at myself for not buying in Austin 8 to 10 years ago.  If you were asking the question more for yourself, I think Phoenix has lots of opportunities.

As far as appreciation, I think a hot market in my area is San Jose which is close to Silicon Valley. It's appreciated over 23% in the last 2 years and but this market is far out of reach for most investors due to extremely high prices.

https://www.neighborhoodscout.com/ca/san-jose/real-estate

 If someone's an experienced investor and has lots of capital buying in volume in Class C areas in the Midwest may work (not most of the people starting out posting in BP forums). I'm not saying the Midwest is a bad place to invest, Class A or B is my recommendation and to do lots of research including flying out there. 

My investing strategy has done a 180 turn (no more inexpensive Class C properties) and to buy a property in an area with good schools and low crime, regardless of state.

Interesting how this thread suddenly went silent for all the times the Ohio agents comment on posts. 

Thanks @Samuel Diouf for typing out a response that's not a mass copy and paste and gives a starting point on prices. Are a lot of investors doing MTR or STR to cash flow or are most of your clients doing LTR?