All Forum Posts by: Jeff Roth

Hi Lolo in California.

Great questions. You have $400K to invest and are thinking about duplexes out-of-state and Columbus, OH has been tough to find cashflowing deals.

I think you are wise to be thinking about duplexes as they are more affordable and you should always, hopefully, have at least one tenant paying. Section 8 tenants are another way to secure rent payment with government backing.

The Midwest is a solid market for rent growth, cashflow, and decent appreciation.

Look at a market like Lansing, MI. You can get a duplex for around $150K or less. It is the state capital with lots of economic development driving job growth and demand for housing with a lower cost of living to keep maintenance costs down.

To Your Success!

Hi Mike-

Congratulations on being a first time investor and you are wondering when to start using a property manager.

The property manager is probably the most important person on you team. They should be found early on by talking to other investors or your investor friendly Realtor.

It is through effective property management that your money is made besides buying well initially. The property manager should be involved before you buy any property to give input on due diligence, how to increase income and reduce expenses, and to make repairs or improvements to maximize occupancy.

Excellent property management is critical to your success before, during, and when planning to sell or refinance.

To your success!

Hi Radhika-

Congratulations on being a homemaker with young kids and looking to do more for the family financially now that the kids are older.

You have 50K to get started but are having difficulty choosing markets and deciding where to begin and you are thinking about single-family long-term rentals out of state because you live in California.

I would encourage you to start with duplexes, preferably with 2 bedrooms in each unit for tenant longevity, and ideally with separate utilities. This way you always should have cashflow coming in and consider renting to section 8 for a government backed rent check. 

In a market like Lansing, Michigan, you can get a duplex for $150K or under. There is strong economic development because it is the state capital which drives demand for housing. Cost of living is also lower in Lansing so repair costs are lower.

You will want an excellent, locally property manager that handles management and repairs, along with an investor friendly Realtor, CPA, lender, insurance agent, and attorney.

To Your Success!

Hi Guenevere-

You have $23K liquid and wonder if that is enough to start investing in OH with section 8 rentals and you are a full time property manager out of State.

I would recommend having twice your downpayment in cash or equivalents, like a line of credit, for repairs and unforeseen expenses as a minimum.

You want to have as much reserves as possible and agree with your focus on Section 8.

To Your Success!

Hi Steven-

Great questions and congratulations on having $100K cash to invest in real estate.

Your goals are cash flow, appreciation, and long-term holds.

You asked about strategies and suggestions for locations.

I would invest in two duplexes so you always have income coming in, in Lansing, MI for about $140,000 each. Buy them well so you can refinance out the downpayment with a Home Equity Line of Credit with lenders that will do that for you and go shopping again. Look for section 8 tenants. Use an excellent property manager. Infinite system and money created.

Keep some dry powder for the emergencies.

To Your Success!

Hi Patrick-

Great question.

Congratulations! You have saved enough cash to purchase a small 2 bed, 1 bath single-family rental that already has a tenant. 

Your question is should you pay cash or get a mortgage.

The investment calculators will say you will have a higher return on investment using as little of your own money as possible.

Depending on your goals, like if you want to buy more rentals, this may be a wise strategy to put as little down as possible.

However, if you are strictly looking to maximize your cashflow, having a paid off house is great.

Honestly, I have a bit of both but like having the house paid off. If you have a monthly cashflow goal, you can get there with 10 paid off doors or 50 leveraged doors or properties. Defends on your goals.

To Your Success!

Hi Alyssa-

Great question! You live in California and are networking with investors there who prefer to invest in places other than California because the prices are so high and a challenging environment for landlords in many places. You are asking about out-of-state investing in general. This is a common problem for other places besides California.

Most of my clients are out-of-state investors-California being one of the most common places for investors I work with.

I would say, in general, it is very similar to in-state investing in that your investment is as good as the team you use. If you have a good team with a solid reputation for being a fiduciary for their client you will rarely need to visit your properties. In fact, most of my investors don't see their property in person until they have owned it for a while without issue. This is accomplished with an excellent team around you including an investor friendly Realtor who ideally is an investor themselves, property inspector, property manager, insurance agent, and asset protection and business attorney. I use the same team I recommend to my investors and rarely need to visit my own properties in-state.

To your success!

Hi Helene-

Great question! You are a Realtor in New York and looking to add as much value as you can to real estate investors and looking for thoughts on how to work with and develop relationships with investors from other Realtors that are doing the same thing.

First, it helps to be an investor yourself as you already are. This allows you to share your experiences and help other investors learn from your mistakes and hopefully avoid them.

Second, investors have to know about you and you have to build trust with them over time. I do this actively networking with other investors, sharing content on sites like Bigger Pockets and Think Realty magazine, and building relationships with referral partners like wealth managers.

Finally, you have to have the best people working with you from your lender partner, to your property inspector, to your property manager, to your insurance partner, and asset protection and business attorney. The people you surround yourself with reflect you and they must be the best.

To your success!

Hi Gary-

Great question. You are interested in investing in short-term rentals as an out-of-state owner and how to furnish and get the property ready remotely. 

There are short-term rental management companies that can help with that.

One that I work with in Michigan covers the entire state and can advise on local short-term rental regulations or regulations that may be on the way, they can give you an analysis of the demand for short-term rentals in that area, nightly rates in that area, monthly occupancy percentage, and projected monthly income.

They also let you choose the level of service you would like from them from full service to minimal.

To your success!

Hi Tyler-

Great question! You are looking into fourplexes to reduce the risk of vacancy as you likely will have paying tenants at all times however the inventory of fourplexes is low in your area of Ashland, KY and you are considering duplexes.

I think your strategy is wise. You can use conventional financing, up to a fourplex, and if you live in one unit you may reduce some of the property tax for the space you live in as it is your primary residence and you can also buy with very little down as opposed to buying it strictly as an investment property.

Duplexes are a great option and you generally also always have at least one paying tenant and can be bought similarly. A market like Lansing, MI is a great place to look for duplexes and fourplexes that cashflow with strong tenant demand.

To Your Success!