All Forum Posts by: Becca F.

@Shaylynn O'Leary

I understand the challenges you're facing. I invest in California and one of the other markets you mentioned, Indianapolis. I actually lived in Indiana for a while so knew the area - now much more down to a detailed level. 

I completely agree with @Nicholas L.'s comment. I have talked to many California investors from BP and local meet ups that have had similar experiences to the investor story he referenced. 

I've posted many times about my experiences so you can read some of my posts. In summary buying in cheap not great areas: stolen AC units, attempted break ins, constant repairs (which happened with me). If you buy a high quality asset in a nice suburb with great schools, which appreciates, you increase your chances of success. I have lost thousands of dollars - the only upside is I can write this off my taxes. 

If want honest feedback I'd also talk to local investors (not someone trying to sell you something) and property managers in your prospective areas - the PMs know the tenant base, median rents etc. Contractors or construction management companies are also good resources.

I'd recommend attending local meetups - you can talk to Oregon investors who buy locally as well as OOS. The interaction can be more productive than posting back and forth on forums here. 

Congratulations on your flipping success in Oregon! DM if you have further questions about Indianapolis.

 I know this post is about a month old but it came up on my feed. I agree with Jay Hurst's comment and the other comments about investing in far away places where you don''t plan to at least visit several times. It's difficult to establish relationships with your team if you're just some far away investor and don't meet them in person. You risk being taken advantage of by many people. 

I can speak for myself and many California investors - out of state investing can be done but you'll need to mitigate risks. You the investor and owner of the properties will care about your investment the most, not the agent, not the contractor, not the property manager (they can screen tenants but they still get paid but the repair costs are being deducted out of your rental income and more costs if you need to evict a tenant).

I've heard great things about upstate NY and would consider looking in that area or within a 2 hour drive of where you live (not sure if you're near NYC). Good luck. 

@Byoung Bae

I agree with the above comments. I think the property manager is one of the first people to talk to - the know the median rents, tenant base, etc.  If you're going to go with an out of state market, go with an area that appreciates (no Class C or D areas). And visit the area several times - things look much different in person than on video and in photos. 

In reference to Indianapolis, I did live there for several years and have flown back twice to check on my rentals. Get a full inspection (by an inspector who knows what they're doing) and a sewer line scope. I wouldn't recommend doing any major renovation (BRRRR) from 2000 miles away unless you have a high risk tolerance. Have an unbiased person, maybe another local investor, not someone on your agent's team, walk the property if you can't walk it in person.

I sent you a few DMs. 

 I agree with the other comments that $25k isn't enough to invest in RE. Save your money, buy some index funds, reduce your expenses (e.g cut out any unnecessary expenses Netflix, going out, expensive purchases, find a cheaper apartment if your rent is high). 

If you don't own a primary residence and really want to invest, I would do an FHA loan at 3.5% and do a live in flip or BRRRR. You should still have way more than $25k in emergency savings.

I wouldn't do syndications. I talked to three of them - $50k or $100k in. I asked myself if I was ok losing $100k if the syndication went under. I also don't have enough knowledge to vet who's a good operator.  Do a search on BP about syndications to see the comments. If you put $25k in index funds/stocks at least you can liquidate quickly if you change your mind unlike a syndication. 

Sorry I don't mean to be negative but it's long road with sometimes hard lessons to learn. I already put in $60k down payment on 2 cheap Class C properties Midwest (Indiana) in 2023 - if I had to do it over I wouldn't have bought them. The "cash flow on paper" in reality is -$300 to -$500 most months for one house (sold the other house). I'm unsure if the appreciation will outweigh my negative cash flow. The upside is I have large passive losses on my tax returns from all my rental expenses so I'm not paying that much taxes to the IRS. 

I think that it's great that you're thinking about investing at young age.

Quote from @James Wise:

Quote from @Zeina Awad:

Hello BP team, 

          How are you all? Hope all is well. I am looking to invest outside of California for the first time. I am looking to rent and hold (purchase a rental income property). Any recommendations for which cities and dates to look into as a starter? Would appreciate the insure. 

 Omg James. I'm laughing so hard at this hahaha. They seemed pretty quiet for a while.

Interestingly the Texas agents are quiet. In my circle of CA investor friends they invested in Texas (Dallas and Houston) but I think they bought closer to 2014. More recently San Antonio for apartment complexes - one of them asked me if I wanted to join in their deal, $75,000 in. I passed. I was scared of losing more money on OOS. I think it was structured as a syndication. Even with high property taxes they saw the potential with San Antonio. Maybe I should have went in? 

I compared numbers with an AZ investor. His property taxes are half of mine and property is worth considerably more - his were roughly $2500 for $475,000 property. My Class A Indy property that I've owned since 2013 has high property taxes (17% increase for 2024) at $6249 for market value of $300,0000 - decent appreciation (doubled in value in 10 years) and great tenants but not sure how long I should hold onto it. 

My own opinion if going OOS, is Nevada and Arizona, low property taxes. Not sure about AZ now, seems like their prices are declining a bit. 

@Zeina Awad

If you don't already own a primary residence, I would suggest house hacking. Are you already investing in California? 

I invest in the Bay Area and Indianapolis metro area. If you absolutely can't invest locally (meaning a 2 to 3 hour drive), you'll need to do a lot of research and mitigate risk. I've posted about my experience many times. I'd recommend talking to local investors of your prospective cities to get positive and negative feedback, someone who isn't trying to sell you anything.

Do you mind sharing how much capital you have to invest in? Or your purchase price ranges? BRRRR or wanting to buy move-in ready?

My opinion is that Nevada (Reno or Vegas area) is a great market - kind of looking at that area myself, close enough for short flight or drive there. Property tax rates are low and great appreciation. 

Caution: you said the magic words "I'm in California" so every out of state real estate agent and probably wholesaler on BP is going to contact you. 

 I hadn't heard the Chik-Fil-A test but I did hear about investors looking at where Starbucks and Costcos are being built.

Those are really great points about in any market that there are sub markets to avoid and visiting the area or knowing someone in that local area helps. I learned a difficult lesson buying Class C "cash flow on paper" properties in Indianapolis metro area (and I knew that area and lived there before, just not down to a detailed level). And I'd add talk to local investors for positive and negative feedback, someone who is not trying to sell you anything. 

To the OP, if you can house hack in your local area, that would reduce the risk of investing in a far away market. 

 Thanks for the clarification. $7k sounds more reasonable but I think setting 5 to 10 years for you and your sister to reach Financial Independence and quit W2 job (assuming you also have W2 job unless you own a business or are a real estate agent) is really challenging. I wouldn't set a timeline that short. 

I did consider syndications and talked to three of them. On the surface, one sounded good - building apartment complexes in land constrained Ventura County (in Southern California) and I talked to the GP. I don't have enough knowledge to vet who's a good operator so I passed. My personal view is that I'd rather own my own property. Do a search on BP and see the numerous posts on syndications. I did buy some REITs. 

I think if you've been successful with what you're doing, keep going while mitigating risk and don't make rushed decisions.

@Marcos De la Cruz

Have you ever appealed the property tax increases on your Dallas rental? If you can find comps that support a lower assessed value, it's worth trying to appeal. You may able to find someone local in Dallas who could help you.

I've also known investors who do rent by the room. You have 4 bedrooms so that seems like a good size home. I talked to Padsplit and they manage SFHs renting each room to different tenants - the total rent is more than renting it out to one household. The one negative is with multiple tenants in a house is potential for conflict among each other but could be reduced by screening all of them well. 

Also Mid-Term Rentals to traveling professionals, people displaced for insurance reasons, or doing a renovation to their home and needing a place to live for  3 months or more are also possibilities. You would have to furnish the home and pay for WiFi/internet. 

Are you self-managing or paying a property manager? If using a PM, what percent of the monthly rent are they getting? 

I was shocked when I saw $15k a month FIRE in Michigan. I'm in the San Francisco Bay Area and my FIRE number isn't $15k a month (with kid costs it is but I wouldn't be retiring early/quitting W2 job with child costs).

I don't have much feedback on Michigan but I do agree with affordability with California and Florida and insurance costs, people may be moving to the Midwest. 

I agree with previous comments about maybe considering commercial RE, some SFHs, not spending the $500k all at once, and maybe doing some lending. Buying 30 or 60 SFHs and doing BRRRRs on that many homes sounds like a huge headache to me. 

I applaud OP on her real estate journey of 5 years with BRRRRs, flips and AirBnbs and doing well with those.