All Forum Posts by: Leo Martinez

@Leo Martinez What about Detroit, MI?

We think the Midwest is a GREAT place for OOS investors to consider!

YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods:

https://www.biggerpockets.com/...

(BP search feature can be problematic, so we’ve also added links @ our website under View Cities & Neighborhoods We Service)

Your biggest question shouldn't be WHERE to invest, but HOW you will invest!

Many OOS investors set themselves up for failure because they don't invest the time to ACTUALLY understand:

1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

2) The Class of the PROPERTY they are buying - which is relative to the overall area.

3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

7) That OOS property Class rankings are often different than the Class ranking of the local market they live.

8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.

9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.

10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.

11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.

https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799

Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?

Let us know if we can help in any other way.😊

 Seeing as you are in CA, unless you are Househacking, I wouldn't recommend starting in CA. Very iffy on househacking as well because the landlord-tenant laws. I agree with starting a team, starting with an agent and expanding from there is the best idea in my opinion because agents are almost your eyes of the area you are investing in. They know many more people than most and can point you in the right direction, if you find a good one that is. Picking an area can be difficult, especially when everyone is telling you different cities. It doesn't hurt to look at multiple but understandably can be overwhelming. Figure out what you want and sort through the cities from there. Let me know if you have any questions or I can help you

@Yoni Meth Columbus is a great place to invest in multi family rentals! Cash flow is tightening up as we see more appreciation. I can't speak for the Indianapolis market, but Columbus is supported by huge additions to the business sector like Intel, Google, Amazon, Nationwide Childrens Hospital and more!

You can definitely put the primary residence under an LLC, there are just different tax laws with it though. As far as that goes, I'd honestly just contact an attorney to help you with the paperwork and the transition so you can understand the ins and outs as you set it up. Have a great day brother, God bless!

@Leo Martinez if have an owner occupant mortgage look at your paperwork there may be no restriction. You may be thinking of if you plan to sell then you have to live in it two of the last 5 years to get an exclusion on capitol gains tax. Your interest rate won't be affected. You have to change your homeowners insurance. LLC is a personal choice, some people say just get good liability insurance.