What are the latest areas people are talking about to invest in. Everybody is talking about Texas. Is there any other place that has rents at .8-1% of the purchase price this is on the verge of an upswing?
What’s wrong with your own area? Are you currently investing there?
I live in Los Angeles California. Rents are no where near as good as they are in Texas. A 2+2 condo cost about 275-350K with a $300 HOA fee and only rent for about $1500/Month. That equals negative cash flow. I might be moving back to Las Vegas but housing market really sucks. In fact, one of the main reasons I may be moving back is because I can’t give my house away! There I have a 3+3 2441 sq ft house hat barely rents for $1500/Month and I owe $330K on that one.
That was a mistake!!! Hopefully you can get out from underneath that property. You can invest long distance, but you will need to have a property manager run the show. I am looking at mid sized apartment buildings, and I don’t plan on managing them myself. I only want to manage my 1-4 units properties. But I think it would increase the risk if you don’t know the area. So moving to a better area, than investing in that state and neighboring states is probably the best solution.
Well it was a mistake that I paid by luck and got me interested in REI. I bought in at 202 in 2002, could have sold it in 2004 for 400K, but my mistake was using it as an ATM machine, speculating and deciding to hold onto it hoping that it would keep going up. Well it did go up to 430K, but I held on too long, now it’s plunging down!! so I still made money, could have made more which now made me realize that there is gold in Real Estate if you do it right.
gypsydogg,
Just to clarify a SFH renting for $1,500 is not worth $430K, 400K, or even the $202 you paid. Hopefully you know that or you will certainly know that soon. It might be worth what you were saying as a non-rental property. A owner occuppied, non-rental property would be the only way it would ever be worth those numbers. I imagine that is what you were thinking but I just wanted to be clear since you mentioned .8-1% as if that is a good deal. My last property I bought was close to 2%, the one before that was almost 4%.
F.W.I. I did something simular to what you did, except I did it twice before learning my lesson. So I’m speaking from experience not trying to be a jerk.
I’m more than aware it’s a crappy deal, I am saying I lucked out and made money, now I’m trying to save myself from from foreclosure or shortsale. Where the heck did you invest, you sound like you made out like abandit.
Investing locally makes absolutely no sense if it doesn’t cash flow, so the only way to invest is where the deals are, but staying local if possible is the best option. I limit my investing to Minnesota and Wisconsin because I want to be able drive to my properties in a couple of hours. But now that I’m looking at larger properties I am beginning to expand to Iowa and have looked at a few in N. and S. Dakota. I have noticed that most states have deals, its just a matter of finding motivated sellers.
I have recently been in contact with a lawyer who handles properties when landlords go to prison. They are very motivated! Otherwise I focus on landlords who can’t handle tenants, they are the best deal makers. Then I focus on properties that are vacant, and/or need a little bit of minor repairs. Rookies typically stay away from vacant properties and properties that need a little work because vacant properties scare them and they don’t have money for even minor repairs. So the demand is lower for these properties.
[b]Deals for me are found in a few different ways:
- Vacant properties (usually cheap)
- Properties with minor repairs (lower demand, so lower price)
- Landlords who can’t manage tenants [/b]
Not only minor repairs but you can also do very well on some that need major repairs. I’m trying to hunt down a guy now that has a condemned 2 family. From the outside I can see the repairs may be extensive and it can probably be bought very cheap and fully gutted. If you have the ability to handle a major rehab you may do even better on price when all is said and done after repairs. Landlords with trashed buildings are usually stuck and can’t rent due to damage but because of the lack of rent can’t afford to fix problems. And in the case of the one I am looking at it’s unable to be rented until the repairs are made and satisfy the local health department, I doubt the landlord can afford them.
Good points. In the beginning I would have stayed clear of severly broken properties, but now I have recently started to like properties that have freeze damage. Then I can justify the costs of seperating the utilities. Major repairs limit the number of buyers which can mean BIG DISCOUNTS.
Texas has good rents, I have to admit it. Dallas and Austin are tough because we’re more appreciation markets, but Houston and San Antonio is where investors go to rent. San Antonio seems to be oversaturated latey and I haven’t found a good investor agent there to refer business to.
Houston and some of the growing cities seem to be good.
Most of the folks on here seem to be back east, where one can buy a home and then rent it with a break even or positive cash flow. However, those of us in the west, specifically California, do not really have that option. In fact, I doubt they really know what it’s like here.
In my old neighborhood, the cheapest single family home on the market is a 4/2, 1383 sq/ft for $649,950. I took a look at rents and I can rent an equivalent home for $2200/mo.
So at $375,000 financed @ 6% = $2248.31, not including taxes and insurance.
And the best negotiator in the world is not going to get a $650K home for $375.
So flipping is the only option in this area. So those that wish to buy and hold are left looking elsewhere.
So that is what am going to do as well. Which of course presents many problems.
Very true…thanks for that if any experts beg to differ please do speak on this.
When you consider the monetary, physical, emotional, and time costs in investing out of your area, the grass is NEVER greener.
It will work in your area. It all starts with motivated sellers and persistance. It may take 100 calls to find a deal, but it works where you are!
Enjoidc, I would love to know if you live in California…It is way different over here and Please anybody that actually lives here and has been able to do what they claim can be done correct me I beg of you. But here we have rent control, cost of houses are insane and don’t rent nearly as much as they are saying they should, nobody is that motivated for 1 and 2 you got non-investors that will pay too much for these places to live in, thinking it’s a great deal because it’s the cheapest they have seen in the 3 houses they have looked at.
Hello Everyone,
I live in Texas, Dallas to be exact and I know of Investors in California, Nevada, and New York looking for properties in Texas. Talked to a guy last night who said everybody he knows talking about Texas & how Hot!. Makes me feel good 
… For the previous post about negative cash-flow sfr in Cali… Here, I know of safe programs with positive cash-flow, appreciation, tenant, prop mgmnt etc… It is a lot more leveraged here and no a bubble like some of forum members are experiencing.
That’s it…Texas watch out, here I come!
Estate Flips, do you sell these properties or arrange these deals for investors or have contacts that do? I would be interested in getting some info to invest out there based on the info you described
If so, please PM me or let me know the best way to contact you
Texas is horroble…too many cows. Go someplace else.
Where would you recomend Bluemoon?