All Forum Posts by: Kody Fordyce

Salem is cheaper than Portland but I would caution buying "break even" cash flow properties or buying properties based on speculation / inflation. In my opinion you need to be cash flowing. Oregon is not the greatest cash flow state (not saying it can't be done, you just need to buy the right property). Break even is just one dip from being a negative liability for you. 

If you can buy a property at a good price that needs rehabbing with a long term flip mentality (after you graduate) I think that would be a solid play. 

Welcome Andrew, As you'll soon find out from BP, there are many ways to dive into Real estate investing. Read all you can, don't hesitate to ask questions on this forum. People will tell of all of their successes, but also ask what their less successful ventures were and how they were remedied. 

I believe in the turnkey model and what it has to offer and the ability to diversify into multiple markets. Multiple markets = multiple industries to fill those rentals. To get into solid rental, no C- neighborhoods you can expect to spend 80-175k +/- (175-200k being a brand new turnkey in a Edmond OK). You can get more for your money in some markets for example Jackson MS. There are many great areas to chose from with lower priced homes and good 12-15% (peaks if 18% cash on cash returns and are able to cash flow on average $300-350 per/mo after "The Big 6" (mortgage, taxes, insurance, vacancy, maintenance, management) are fully paid. Markets like OKC, Kansas City and Philadelphia can offer these kind of returns. Fill free to reach out if you have any questions. Best of Luck.

Kody 

@John Kunick I agree, we do commonly see peaks of 18% cash on cash with our turnkeys. We opt to state more conservative numbers on the front side to the people we invest with. Buying the houses right is absolutely necessary. 

@Wesley Jeanette I agree that apartments are a good goal. We just walked through a 91 unit value-add apartment complex and a multi unit condo complex outside of Oklahoma City a couple of weeks ago. The apartment complex had several burned out units. The opportunities are out there for sure. As far as my moving out of state for investments, I  started a little less than two years ago due to the inflated markets in Portland. I knew and worked with one of the owners of the investment company that vets out the developers across the Midwest and South. Having someone that I trusted made it a seamless move. We started with buy and holds and are working into portfolios, apartment complexes, mobile home parks and commercial buildings (eventually hotels). Markets like OKC, Jackson MS, Indianapolis, Kansas City and Philadelphia. Cash flow is easy in those markets and properties are priced well below what you and I are used to. Have you looked into picking up a bundle of single families or are you just looking at true multi? Fill free to message me if you'd like to talk.

Kody 

Wesley,

That is great that you are looking into the turnkey world. I started my personal real estate investments with a HUD house in Portland in 2012. I was able to leverage the still recovering housing market and low acquisition cost to turn a healthy profit, which allowed me to easily roll into the subsequent projects. I am still investing locally but my bread and butter is now shifting to the Midwest for fix n flips and turnkeys. What kind of price point are you looking at for the complexes?

Kody 

Michael,

You are right that in some markets a 60k does come with more challenges in clientele, others not as much. Most of the Midwest markets that we are in (OKC, Kansas City, Philadelphia etc.) appreciate 1-4 % annually but are very stable markets. I just got back last week from a routine meeting with our developers on the ground in Oklahoma City and saw many opportunities in the the 100k range. At this price point, you are in decent working class neighborhoods, and are able to cash flow on average $300-350 per/mo after "The Big 6" (mortgage, taxes, insurance, vacancy, maintenance, management) are fully paid. On average your'e seeing 12-15% cash on cash returns. You can also maximize your returns by placing yourself into a duplex or triplex in these areas. One of the other considerations that our investors appreciate and that we require for turnkeys is having all services in-house. Meaning our developers acquire the properties, have their own contractors for rehab, and manage the properties in-house. This allows a much higher level of customer service. 

Evan,

You are right to use some caution on your first out of state rental especially out of the continental United States. I absolutely would advise you to visit the developer in the prospective city (initially and when you chose a property). There is always some apprehension with your first out of state purchase ( I know I had it) but knowing your developer is key. Orlando is getting tighter for turnkeys because it is a really popular market. There are plenty of opportunities across the Midwest that will provide 12-16% cash on cash returns and can be acquired from 80-200k in  A to C+ areas.  Most in the areas that I have been involved in will cash flow on average $350 per/mo after the "Big 6" are taken care of (Mortgage, taxes, insurance, vacancy, management, maintenance).  Hope this helps.

Kody 

Mo,

I started investing in Portland because it was local. My wife and I did several deals and found that it was pretty challenging to find a reliable stream of projects. High cost is also a factor. I have a few projects left locally and will continue to take them on as they come but my bread and butter is in the Midwest / South now (Indianapolis, Jackson, Oklahoma City etc.) Rentals just don't pencil locally like they do in those areas. Best of luck. 

Kody 

We have the same problem in Oregon. I have dove into the Midwest and South because of the relatively low acquisition costs and comparatively high rents. 

@Rocky Griffin Have been working with a turnkey company that does about twenty properties per month.