Investing Outside of CA - Posted by Allan

Posted by James on July 25, 2007 at 06:43:22:


Give me a shout sometime to chat.

989.213.6108 7am-9pm EST

Investing Outside of CA - Posted by Allan

Posted by Allan on July 19, 2007 at 21:20:24:

Let’s just say that I have $100k to invest, how would u diversify this in terms of buying real estate, should i try to fit in as many properties as i can get with this in this market, and leaving myself enough reserves to absorb when S#&% happens…sfr, dup, etc…I’m looking to invest outside of CA, what state would u recommend and why?

Re: Investing Outside of CA - Posted by Rich-CA

Posted by Rich-CA on July 21, 2007 at 20:59:43:

You also have to decide what your personal tolerance is for the crap that comes with rental properties. Will you be self managing (and how are you going to do that) or will you be hiring a property manager local to the properties (and how will you select them and then monitor to make sure they perform)?

My suggestion is to diversify locations. Not because that’s what I’m doing, but because a “good” market in one location can change for the worse and you don’t want everything in the one basket. Different locations can help you weather anything but general nationwide downturns if you pick dissimilar areas. For example, it probably would not be too good to invest in Corpus Cristi and Oklahoma City if something bad happens to the oil industry because both locations are heavily dependent on this one industry. But an Oklahoma City and Memphis would be different enough as to not get caught in a single industry slow down.

I also would not recommend you do this state by state. All real estate is local and the markets in San Antonio, Austin, Houston, and Dallas are all very different even though they are all large cities in the same state. Also in TX are more rural locations mentioned from time to time by others on this Board as being great for cash flow (though you probably wouldn’t put the properties on a post card). So I would look based on the city rather than the state.

I have invested in Phoenix (I do not recommend it right now - prices high, rents low takes a long time to sell or rent a place). Also San Antonio (I like the city, rental market is strong in SFR but less so in multi families). And now we’re buying in Colorado Springs (decent rental market, but you have to find bargain properties in order to cash flow). I have looked at Nashville, Memphis, Oklahoma City and Boise.

Nashville is very nice, decent rents but the agents there don’t really try to help you, mainly they try and steer you towards properties that cost more instead of ones where you might make a profit.

Memphis has better numbers, but their economy is one where the tenants will be rougher on the properties (mainly blue collar workers).

Oklahoma City seemed to be pretty good, but I did not like the air travel costs (I travel from Oakland airport on Southwest Airlines) and the prospects of damage from huge chunks of hail.

Boise is a very nice city but enough people from CA have moved there to drive prices out of the profitability range.

And so on. You collect data by city and surrounding communities and then decide.

Re: Investing Outside of CA - Posted by James

Posted by James on July 20, 2007 at 05:03:49:


What are your goals exactly?
Equity? Cash flow? Long-term? Both? Notes? Return%? Etc.

Where I’m at, it’s a great opportunity to buy and hold for long term rentals.
Chasflow is very good and the prices…just bought a couple more for a few thousand - TOTAL. That’s my market.

100k in Cali isn’t much but can buy you 20+ properties easily elsewhere.

Good luck,

Re: Investing Outside of CA - Posted by Allan

Posted by Allan on July 24, 2007 at 10:08:45:

How are you managing your properties? It seems to me like hiring a prop. mgmt. would be the ideal - i can deal with the emotions of owning rentals - you seem to invest all over the place…I was kind of thinking since I was going to start small that I stay in 1 place using 1 prop. mgmt. company,(dont really know if that would save me anything) possibly get a min. of 4 properties (sfr/multi fam) if I could fit it within my budget…I myself would like to stick around West Coast, and hearing from you CO may seem to be a good place to start, if you could provide me with some additional info about CO, that would be great…if not, thanks for the post regardless.

Re: Investing Outside of CA - Posted by Alex Franks

Posted by Alex Franks on July 22, 2007 at 21:23:51:

Well looking at different markets.I am from New York but now reside in SC.The market here is still great for rental and retail flips.We buy in both NC and SC.

It all depends on what we want as to what area we chose.Feel free to contact me and I can email you some information.

Alex Franks

Re: Investing Outside of CA - Posted by Allan

Posted by Allan on July 20, 2007 at 15:17:18:

That’s exactly what I’m thinking is to buy and hold for long term rentals, pay principal and interest with the monthly rent so I can grow some equity on the properties, hopefully have a little cashflow left since the downpayment will be minimal, and I would like to be in a state where there’s still a demand for housing, even with minor appreciation since I’m looking at this as a long term…what state would you suggest and why?

Re: Investing Outside of CA - Posted by Rich-CA

Posted by Rich-CA on July 23, 2007 at 10:08:50:

n my last analysis I had come down to Nashville and Co. Springs. The tie breaker came in three parts. First, the people in CS returned calls and e-mail quickly and completely, even though they knew we had to sell in a very slow market (Phoenix) for a 1031 Exchange. Second, after dealing with TX, I decided to weight my decisions towards “western states” because of the number of issues I have had regarding getting things done quickly. Third, Money Magazine named the city as the best to live in for 2006. Actually, there are four. Southwest Airlines can get me from home to Denver (just over an hour away) for $79 (this matters for face to face meetings and emergencies requiring I actually be on site).

I would be interested in both NC and SC if the numbers are right. If you have info, e-mail me offline.

Re: Investing Outside of CA - Posted by Alex

Posted by Alex on July 23, 2007 at 22:11:16:

Well my company is buying in NC and SC.I live in SC.

We are a fortunate market unlike some areas of the USA foreclosures rates are all time high.As we are to just like other places. With the only difference being the amount of new people moving into the Carolina’s and new markets being formed.Just recently ABC News did a huge story about Charlotte NC growth and the prediction for the next 5 to 10 years.

If you are interested email me off line for more information.We are using cash and credit partners for our deals already.Majority of our clients are from New York and California.

We have everything from buy and hold rentals to high end flip deals and some great pre construction projects as well

Feel free to buzz me in office


Re: Investing Outside of CA - Posted by James

Posted by James on July 22, 2007 at 11:14:10:

I’d only suggest buying proerty in Michigan…but that’s only because I know the market from all angles.

Every city is a little different, but with some due diligence, you’ll find the right ‘terms’ to buy. Usually very (very) cheap and w/ a stable economy and rental market. Even if you take less cashflow in rents per month, you should always come out ahead in these cheap properties.

When buying these type of properties…don’t expect to get much (if any) equity (maybe 10k max)/property. After 2 years of time, you have back your total investment and it’s all gravy at that point.

Call me up if you have any questions and thoughts.


Re: Investing Outside of CA - Posted by Alex

Posted by Alex on July 23, 2007 at 22:00:04:

Hey Rich I sent you over an email feel free to contact me via email.I got a investor client flying in Thurs from California. can share some details of what we projects we are working on.

Re: Investing Outside of CA - Posted by BigV

Posted by BigV on July 23, 2007 at 06:47:46:

Buying in Michigain with 10K equity? From what I hear in MI, the prices are actually FALLING or depreciating every year, people are LEAVING the state for jobs, so the only cashflow you can expect if from Sec. 8 rentals.

If one is buying with only 10K equity, even if one is buying in 30K price range, they are taking a HUGE risk. It’s not a problem to buy low in MI, the problem is to sell at a profit.

I think you missed - Posted by James

Posted by James on July 24, 2007 at 05:25:12:

the point BigV.

When buying lower priced houses, equity ISN’T what you are buying for - its’s the cash flow. IF you get equity out of the deal, great.

I’ve got a friend of mine who sells these properties in packages of 15-25 at a time to out of state investors at roughly $15,000 a piece. Cash flow rates are great and he makes a good abmount of money after a couple years.

I’ve got three pages of properties that I can buy for roughly 1-3k at the moment. Do I buy them? Nope - they need too much money to get them rented. Several of them have been appraised out in the high 40s and I can buy for 4-7k.

Thinking that Sect8 brings in good rental rates is not a great mindset either. Sect8 isn’t everything people think it is. Sometimes it’s worth it, but rarely.


Re: I think you missed - Posted by Allan

Posted by Allan on July 24, 2007 at 10:12:07:

“I’ve got three pages of properties that I can buy for roughly 1-3k at the moment…”

I would really appreciate it if you can help me out finding these types of properties…