All Forum Posts by: Terry Louwerse

 I seen a few folks talking Cleveland in this thread. There are many markets available for guys like you to invest, Cleveland being the one the one I am most familiar with so I figured you'd get some value out of reading The Ultimate Guide to Grading Cleveland Neighborhoods. I also have similar guides that you may want to look over for Kansas City, Missouri. & Birmingham, Alabama.

In addition there are tons of other turnkey markets out there besides those listed above. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

• Cincinnati, Ohio
• Dayton, Ohio
• Toledo, Ohio
• Youngstown, Ohio
• Cincinnati, Ohio
• Memphis, Tennessee
• Saint Louis, Missouri
• Indianapolis, Indiana
• Detroit, Michigan
• Erie, Pennsylvania
• Louisville, Kentucky
• Milwaukee, Wisconsin
• Jackson, Mississippi

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

One thing to note when looking at the individual markets, you can make or lose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

• Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
• Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
• Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
• Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
• Make sure your property manager is a licensed real estate brokerage.
• Google Clayton Morris scam and/or Morris Invest scam for a cautionary tale of what not to do when buying turnkey real estate
• Understand you can not eliminate all risk, only mitigate it. If you are risk averse, real estate, (especially out of state) is not for you.

@Terry Louwerse just curious, since I'm also entertaining the idea of long distance rentals... are you planning to visit Pgh and look at some of the neighborhoods before making offers or just sight unseen?

I'm currently trying to find deals in the Philly area... not very many that'll give me 12%+ CoC return. Ordered the BRRRR book since that might be a better strategy for this area

@Terry Louwerse too expensive. Not worth the cost. It’s a wonderful place but is it worth $2100 for a 700 sqft apartment in San Mateo? No way. My friend was paying $4000 for a luxury apartment + parking next to civic center in sf.

But let me tell you a little about myself. I drive for Doordash. I make more money here than I do “back home”. But that’s my income source. Not much.. So I’m limited in what I can invest in. It pretty much leaves the bottom of the barrel. Which is good because I am a goof and if I gon’ goof up on a project, it’s going to be on a sub 50k property. Then eventually I want to move up to C class.

Just the throw some numbers at you:

“My” 400k Rental in Sac makes 1.5k/month in rents (1.8k market).

Here, you could flat out buy a property for 250k in a A/B neighborhood and easily rent for 1.5k.

Now, I’m trying to buy a house for somewhere around 25k. Fix up what I can (learn) myself. And rent it out for 1.5k in a D, borderline C neighborhood.

You can get into C neighborhoods for a little more but I’m limited for now by my income. It’s not the glitz and glamor of bp re podcast but a lot of people around me are making good money doing similar things. There’s a lot of opportunities here but I still think it is early in the growth phase and things have a risk of still fizzling out. I think going forward we’re depending on people staying after graduating from CMU and more young people moving in like myself and possible yourself. Pollution is a slight political problem so we’ll see where that goes going forward. Overall can’t go wrong investing in pgh.

@Terry Louwerse a good book to get you started is Rich Dad Poor

Dad. Great basics and an easy read

The biggest problem with the Core 4 concept in a place like Pittsburgh, where you're routinely dealing with 100-year-old housing stock and a poorly trained workforce sorely lacking in imported professional tradesman labor, is that your  No. 3 Contractor had better be No. 1 on your list and s/he had also better be both closer to a walking encyclopedia of historic building and renovation than a mere mortal, and also a solid rock of emotional stability and professionalism. This is not easy to find in western Pennsylvania, which is why the DIY approach pays greater dividends here than in most places. 

 For your first one I think its a good idea to buy something you can get to easily, because chances are you'll need to go there quite a bit.  Ideally one hour or less away.