Whether you are a new below market value real estate investor or an experienced hand, a very important part of your investing success is to select the best out of state investment property. For many investors, the best place to invest in below market value property is not where they live.
When many of our investors started buying under market value real estate in San Antonio, they had tried to buy in other cities, but found them too expensive.
They chose San Antonio investment properties for these reasons:
Incredibly low prices: I could buy under market value houses in San Antonio for $25,000, do $10,000 in rehab, and resell with owner financing for $49,900. That’s an amazing return. Even today, with prices higher, I still can make 11% ROI on these under market value houses with a price of $50,000.
Strong economy. Bizjournal.com recently stated that San Antonio had the largest growth in construction employment from 2014 to 2015. This reflects the strong job and population growth that has shown no signs of slowing.
Growing population – Forbes has ranked it as the 9th fastest growing city in the US. This of course means there will be strong demand for houses for sale and houses for rent. From 2011-2012, San Antonio’s population grew almost 2%!
Strong job outlook: Even though there is less growth than previously because of the slump in oil prices, San Antonio is still leading Texas for job growth as of early 2016. The city job growth rate still is a healthy 3.5%. One of the reasons I chose San Antonio as a city to invest in below market value property is that only 2-3% of its job base is involved in energy production.
Here is a fine example of the type of under market value property I buy in San Antonio:
$62,000 cash purchase, $10,000 rehab, 50 DOM, sold for $89,900 owner finance, $937 per month, 12.3% ROI.
This 3 BR 1.5 bath property investment with positive cash flow north of downtown San Antonio TX is in a heavily revitalizing area. It was bought by the investor for $62,000.
It only needed approximately $10,000 of rehab, including new flooring, paint in and out, and minor foundation work.
The total project cost to the investor was $72,000.
Within 50 days of the completion of rehab, it was sold with owner financing with the following terms:
$5000 down
$89,900 final price
10% interest
30 year note
$937/month PITI
Cap rate 12.3%
If you choose San Antonio as your out of state investment property location, you will need to find a good Realtor and/or wholesaler to locate quality properties for you. My advice on that is to find a good wholesaler who has been working in the city for more than 10 years and has done several hundred transactions.
The wholesaler will make a 2-3% profit when he sells the under market value house to you, but the best wholesalers will leave you plenty of meat on the bone to make strong passive income. With a good team in place San Antonio is really the best out of state investment city, in my view.
I frequently see lots of articles about how ‘passive income isn’t as passive as you think’ related to real estate investing. Here is a good example.
The author points out how often investing in under market value investment properties is not as passive as one might think. She does make some great points about the problems with managing under market value rental properties:
You have to deal with random phone calls about the roof leaking or the toilet being stopped up in your below market value rental property.
You need to check up on your rental properties for regular maintenance issues that if left untended, can cause you major repair issues (such as a leaking gutter).
Looking for new tenants every year
Even if you hire a property manager, you still will have to deal with extra expenses, problem renters, maintenance problems, and yes, dealing with problems with property managers.
As a big investor in under market value properties in Texas, I am very familiar with the problems of renting out properties. At one time, I owned and managed more than 200 rental properties. There are no problems with under market value rental properties that I haven’t seen!
That’s why I converted all of my below market value rentals to owner finance properties about five years ago. On my San Antonio Texas investment properties now, I am ‘the bank’ to the occupants of the houses.
On each of those 200 San Antonio Texas investment properties, I executed a promissory note for the qualified occupant at 10% interest, 30 year term, no pre-payment penalty if they want to refinance. My buyers send me electronic mortgage payments each month.
This type of under market value property investing has several advantages over rental properties, especially as an out of state investment property:
Truly passive income. I never have to worry about a single repair on any property that I own. My buyers maintain the properties as they are buying them from me on terms. Most of my San Antonio buyers are blue collar workers, so they have the skills to keep up the houses.
No vacancy concerns. Most under market value property investors have to worry about vacancies every year. Not me. As long as my buyers pay on time, I never have to worry about getting another occupant in the house. If I have to foreclose, the house is vacated in 60 days and I resell it. I have resold some houses three time.
No phone calls. My occupants ‘own’ the under market value houses, so I just hold the note.
I can sell the note on the below market value property if I need cash. Many people do not know this about owner financing. If you do not want to carry a long term debt instrument, you always can resell it on the open market.
Short summary: Owner financing under market value properties is a fantastic passive income instrument. It is especially suitable for out of state investment property seekers. Imagine being able to count on monthly passive income without being a landlord! That’s exactly what you have with owner financing.
Many times, the first free class offered by an investing coach is just to lure you into more classes.
It’s better to find an investor who has been in the business for a decade or more and has done 500 or more deals.
You must study the market constantly and stick to your niche.
Many beginners in real estate investing in under market value properties are lured into hiring a real estate coach or guru who promises to teach them how to be a successful investor — for a price.
Most often, these real estate coaches or gurus offer a lower-cost first seminar about flipping houses, which is just selling the next part of the program — the full real estate coaching system that might cost $10,000, $20,000 or more.
Is one of these real estate coaching programs worth it? Generally, beginning investors should use caution when paying thousands of dollars for any type of coaching or guru program. In my view, much of that money would be better spent on buying a good under market value, out of state investment property!
The bottom line on these programs is that a lot more goes into being a successful real estate investor than learning a slick system from an expert.
A lot more goes into being a successful RE investor than learning a slick system from an expert.
These real estate investing coaching programs don’t usually teach you the truth of real estate investing:
Becoming successful in this business takes a lot of work — a lot of work.
Most aspiring real estate investors never even do a below market value deal, let alone make any money at it.
A huge part of being a successful long-term investor comes from developing a stellar reputation in your market.
Being successful in investing comes from establishing a proven team of real estate professionals at affordable prices, including rehabbers, closers, agents, title companies and more.
The vast majority of successful investors are experts in their local area, and that takes years of work in under market value properties.
None of the above can be taught in a five or 10 day class by a real estate investing coach. How I became a successful investor
I have developed a successful investing system of owner financing in Texas that allowed me to financially retire at a young age. I did gain much knowledge and support from free mentors in real estate, but I never paid any coach to teach me anything.
Over the years, I have spent thousands of hours studying my local real estate market. I know exactly what is going on in my zip codes, such as 78201, 78210 and 78207. My knowledge means I know exactly how much to pay for a house and how much to rehab it. That knowledge takes years to develop in the best cities to invest in real estate.
My reputation in my town also took a long time to nurture. People know who I am because I close fast on deals — in 10 days or less — with cash. The best deals often find me because I have spent years becoming a respected expert in distressed houses in my city, and I always do what I say I am going to do.
I discuss my success only to point out that getting to this level took a lot of work, and didn’t come through paying a coach or guru a wad of money to teach me the secrets of investing. Tips to succeed in real estate investing
Here are a few tips to help you succeed at real estate investing:
Partner with an experienced investor to teach you the ropes in your city. Offer to help him or her with business to learn how to become successful. You should never pay someone to teach you.
Ask your investor friends who taught them to be successful.
Focus on a niche. There are many ways to succeed, and fail, in real estate investing. Focus on one or two areas of real estate investing and never deviate. My niche is owner-financed houses from $60,000 to $100,000. That is the only type of property I buy and sell.
If you are in an expensive area, consider buying an out of state investment property in a cheaper area with a team you totally trust.
Find a free mentor who has done at least 500 deals and been in business more than 10 years. Those are the people who can teach you what you need to know — but don’t pay for it.
So in summation: no, don’t hire a real estate investing coach. It’s likely that your money is more valuable to that coach than any knowledge he or she might impart upon you.
As an experienced under market value property investor in San Antonio, I love to get a great bargain. Of course, just because the house is being sold below market value does not mean it is a great buy.
When I find a potential under market value property that I may buy, I keep in mind why people usually sell houses for less than they are worth:
The under market value property needs a lot of rehab. This is usually one of the reasons the property is being sold so inexpensively. Most of the houses that I buy under market value need at least $20,000 in repairs. Buying below market value property that needs rehab is fine, as long as you are able to do the work cost effectively. I own a construction company, so I can usually do the $40,000 rehab for a fraction of that amount.
Divorce – people split up and will sell a house for less than it is worth.
Foreclosure – Mortgage companies may repossess a property and will often sell the properties at auctions. I always advise new under market value property investors to be wary of auctions. Many of the buyers at these events are retail buyers, and they will drive up the price on that below market value property. If you pay too much, you will never make any positive cash flow.
Estate sales – I get most of my below market value properties through estate sales. Usually there are several heirs and they are willing to accept a low price to just get the house sold. Of course, my offer on the below market value property takes into consideration the repairs that must be performed.
An under market value property before my rehab.After rehab – being sold for $119,900.
When you are considering buying an under market value, out of state investment property, be certain that you do very careful due diligence. Newer investors routinely pay too much and under estimate expenses. So long, cash flow!
Remember:
Do a careful personal inspection of the under market value property, and look around the neighborhood as well. Check the condition of most of the other houses around it. Is it the ugliest house in the neighborhood? It could be expensive to rehab to get it up to par.
Check comps for houses that have sold in the area in the last six months. The best way to do this is to have a real estate agent investor who can help you compare house values. I’m a real estate agent myself so checking comps is easy.
Check the rental and mortgage prices in the area of the below market value property. Your real estate agent can run rental comps in the MLS. Personally, I do owner finance on my under market value properties, and I try to keep the monthly payment around the rents in that area.
Get a really good idea of what the rehab expenses will be. I have seen so many investors lose money because the costs of rehabbing the property doubled.
If you are concerned about the expenses of owning rental property, consider owner financing your under market value investment properties like I do. This is an especially good move for an under market value investor who wants an out of state investment property. You have no worries about expenses as your buyer take care of the asset.
Also be certain to research which city you are going to invest in. Some of the best cities to invest in real estate include Kansas City, Indianapolis, San Antonio, and Charlotte.
I first came to San Antonio as an under market value property investor years ago. Buying inexpensive, below market value investment property has enabled me to live a great, rewarding life. I have been able to make a good income and I continue to invest in under market value property today, which helps to revitalize San Antonio, one of the best cities to invest in real estate. In fact, I know many investors who used to buy only California investment property who now buy here.
Overall, San Antonio is one of the best cities to invest in real estate because of:
A rapidly growing population attracted to San Antonio and Texas low tax, pro business environment
Strong job growth even in down real estate markets. Even in the big downturn in 2008, San Antonio unemployment never went above 7% and now is down under 5%.
Diverse job base. San Antonio is not just about gas and oil. We also have a lot of manufacturing jobs, including Toyota, high tech employment and military bases.
Large population of hardworking blue collar workers, which drivers demand for owner finance properties and rental properties.
Coming into 2016, experts think that we will eclipse total home sales in 2015, which was 24,948, according to the San Antonio Board of Realtors.
Those three key drivers of home purchases – growth in jobs, steady mortgage prices and increasing home value, are not showing any signs of slowing in San Antonio real estate.
In fact, we actually are seeing not enough new homes being built to meet the demand. This is good news for the out of state investment property buyer – it increases demand and prices for our under market value investment properties!
I can definitely tell you that this is true about San Antonio real estate: My below market value investment properties that were $40,000 two years ago are now $60,000, and I usually sell my owner finance houses in under 60 days. Still, my many out of state investment property buyers earn 12% ROI on these under market value houses. Anyone considering, say, California investment property, would be happy with these numbers.
As of now, the median home price in San Antonio, one of the best cities to invest in real estate, is up 6.8% from 2014, but still is only $192,000. Try to buy a house for $192,000 in California!
My best guess is that property values will continue to climb in San Antonio for at least two more years. It is a great time to buy San Antonio investment properties!
I’m a 21 year expert in San Antonio investment properties, and for the first eight years, I mostly did rental investment properties. However, during the market crash of 2008, I converted most of my under market value properties to owner finance investment properties.
That was a great decision! Today I am a financially retired owner finance investment property owner ((San Antonio – one of the best cities to invest in real estate). I have found that owning owner finance investment properties is generally better than rental properties.
If you are not very familiar with owner financing properties, sorry! I’ll explain:
Some people want to buy a home rather than rent, but they lack the credit to get a traditional loan. One option the under market value property investor has is to ‘be the bank.’ That is, you the under market value property owner can write a mortgage yourself to your home’s occupant.
The same terms apply as when you get a mortgage from a bank. Payments are made over time with an interest charge, taxes and insurance must be escrowed.
In my under market value properties with owner financing, I charge 10% interest, 30 year term. My buyers may refinance when they like.
Here are some of the advantages of owner financing for the below market value property investor (pay attention, out of state investment property searchers!):
Owner financed investment property can sell very quickly to your buyer. There is no bank involved, so after you do your due diligence on the buyer and get their down payment, you can go to closing right away. Once I have the buyers’ proof of income, I usually close on my owner finance investment properties in two weeks.
Owner financed investment property has a very good rate of return because you have no maintenance costs.
Owner finance investment property has a lot of peace of mind because I do not worry about what the next repair on the house will cost me.
In Texas, owner finance investment property is easy to foreclose on. If the buyer defaults, I repossess the house in 60 days and resell it.
Owner finance investment property is very attractive as an out of state investment property, because you are not a landlord. You just collect your monthly payment from your buyer electronically each month. It is great passive cash flow for the out of state investor.
The above advantages of owner finance investment property have made me quite wealthy at the young age of 38. I strongly advise all under market value property investors to consider owner financing instead of renting.
Now, if you are an out of state property investor, you might wonder, what would this mean for me? Well, let’s take a look at this San Antonio under market value property:
Address: 2229 W Hermosa Dr. San Antonio, TX 78201
Year Built: 1948
Description: Below market value property sale, 2 beds 1 bath, 769 sqft, lot size: .14 acres yearly taxes: estimated repairs: 35K (convert to 3 BR).
Max After Repair Value: $129,000.00.
Cash Price: $69,900.
Your cash outlay for this under market value investment property would be $105,000. The rate of return for an owner finance investment property here would be ~11%. Your monthly income would be $900 per month after you pay taxes and insurance.
You have no other expenses.
Meanwhile, if you rent this property, you will also net approximately $900 per month, but you will also have a property management fee of approximately $95 per month, plus repair expenses of $500 to $1000 per year. Your ROI will drop to approximately 10%.
Of course, some under market value property investors buy Texas investment properties to enjoy depreciation and writing off expenses for tax purposes, and there is nothing wrong with that! Personally, I prefer the pure passive cash flow from owner financing investment properties.
As a financially retired expert in under market value investment properties in Texas (San Antonio – one of the best cities to invest in real estate), I always purchase my below market value properties for cash flow – never for appreciation. Anyone considering California investment property – take note! Appreciation is a crap shoot. Cash flow is forever.
You can retire young with appreciation, but there is some luck involved. With cash flow investment properties, you can be a master of your own destiny.
Instead, I invest for cash flow in all of my below market value properties. I make at least 11-12% ROI on each of my under market value investment properties in San Antonio, which I find one of the best cities to invest in real estate. Here’s exactly how I do it:
I find an under market value property.
I buy it cash for at least 20% under market value (or I move on)
I do $25,000 or so in rehab.
I sell it with owner financing at 10% interest, $5000 down.
That is it, my friends. That is the simple secret to investing in under market value properties and making millions. Each one of my San Antonio investment properties makes at least $500 per month in passive cash flow. If my houses appreciate, great – I may sell one or two and make $20,000. But that is rare.
Banking on Real Estate Appreciation Gets Investors Hosed
A huge mistake that many new real estate investors make when buying under market value property is that they have no passive cash flow. Their hope is that the houses will go up in value. That is pure speculation, and you only want to speculate when you can afford to speculate.
When I first buy my under market value property in San Antonio, I do about $25,000 in rehab, but I am careful to not overdo it. Over rehabbing is another landmine that many real estate investors step on. Not me. I do enough rehab to get the house sold. I research the under market value properties in the San Antonio neighborhood to get a good idea of how much rehab to do. Once I sell the house with owner financing, it is producing positive cash flow for me.
The advantage of doing owner financing instead of renting is all the repairs are on the buyer. I do not spend a penny on fixing the house after the rehab is done. Cool huh?
The Disaster of Negative Cash Flow
Many real estate investors buying for appreciation routinely low ball their monthly expenses. I’m talking vacancies, repairs, interest on loans, etc. Most new investors will not account for what they do not know, because they so much want to see positive cash flow. Remember – when you underestimate expenses, you are not thinking. You’re feeling. Don’t do that. Buy the best cash flow investment in your area, or another area.
I Never Try to Predict the Real Estate Market
Well, I do try to take a guess on where things are headed (I think we will see a booming real estate market in San Antonio for at least two more years). But I am never going to bank my income on whether or not my educated guess about the local real estate market pans out. No thanks.
It is a lot safer to invest for cash flow and never appreciation. Buying my little under market value properties in San Antonio has made me quite wealthy at a young age. So that is what I recommend most investors do – invest in the best cash flow investment you can find.
Many aspiring under market value property investors cannot buy properties that generate cash flow in their area. San Franciscans and Seattlites, you know what I’m saying right!?
So, many under market value property investors want to diversify their investment property portfolios by investing in below market value properties in other parts of the country. But where are the best cities to invest in real estate for out of state investment property?
Below are some of the best cities to invest in real estate, in my opinion.
San Antonio!
Of course, I live and work in San Antonio, and I am a bit biased. But our investors love San Antonio, live here, and love to invest here. so please indulge me. Real estate investment properties San Antonio rock because of the following:
Strong job market – there are many types of industry here – oil and gas, military, technology, and all kinds of international corporations attracted to the pro business environment, low taxes and lack of red tape in Texas.
Strong population growth: San Antonio is one of the fastest growing cities in the US.
Hard working renters and buyers: We have a large population of blue collar Hispanics here, and they make great renters and buyers.
I usually make 10-13% ROI on my owner financed investment properties in San Antonio TX, with an initial cost of $50,000 to $60,000. This makes San Antonio one of the best real estate investment cities for out of state investment property.
Dallas
Dallas also has a very strong economy and relatively low real estate costs, compared to California. Dallas also sees strong price appreciation, and strong rents compared to property values. Many investors in Dallas can earn almost a 20% return for under market value residential real estate – not bad! Also one of the best real estate investment cities.
Kansas City
I know several investors who have done very well in Kansas City turnkey properties. Prices in this Midwest city are very low and the population is growing quickly. I know people doing well with out of state investment property in Kansas City.
Milwaukee
I also know a bunch of under market value property investors who moved into the Milwaukee market because of rock bottom real estate prices and fairly high rents. If you need a reference for Milwaukee turnkeys, let me know; I know some good ones.
Charlotte
I have read that Charlotte is going to be seeing strong appreciation in the next five years. This could cause your initial costs for investment property to be higher, but if you want appreciation, this could be a good bet. I also know good turnkey companies here.
In short, there are many excellent cities to invest in real estate, you just need to find a good, reliable team on the ground. I know a lot of real estate investors around the country, and am always happy to provide a referral.
Many investors wax poetic about the magic of leverage in real estate investing. That is, they say that by taking out a mortgage on an investment property and using a 10-20% down payment, you can buy more under market value properties and generate more cash flow.
I respect their position, but I disagree.
You can retire young by buying all cash investment property in San Antonio TX, one of the best cities to invest in real estate. These are some of the best San Antonio real estate investments. Buying here in Texas is often better than say, California investment property, because you can buy so many houses with not much cash.
Why Do I Buy All Cash Investment Property?
I prefer incurring the lower risk that comes with buying properties all cash. My under market value investment property portfolio is:
Stable
Flexible
Can be sold quickly when and if I need to
By investing in all cash real estate properties, I have invested my money into a tangible asset that will usually produce cash flow, and may appreciate somewhat over time (this is not my priority – cash flow is).
All cash real estate sales have dropped but still are 30% of the market.
I also buy cash real estate San Antonio because I always owner finance my under market value investment properties. Many real estate investors take out mortgages and rent their properties. That isn’t my model. I buy all cash real estate and then owner finance at 10%. I get superior cash flow over 10% per year and also have no landlording costs with San Antonio investment property.
When I Buy All Cash San Antonio Investment Properties
I typically pay $40,000 for the under market value property, and about $25,000 for the rehab. So I am in the deal for $65,000 and then owner finance it for fair market value – approximately $90,000. That property owned all in cash generates $800+ per month of positive cash flow.
If I had a mortgage on the house and rented it, I would have only $300 to $400 per month in cash flow, and also would have repairs.
For me, I buy only for long term, maximum cash flow when I buy property all cash in the best San Antonio real estate investments, one of the best cities to invest in real estate, IMHO. It’s a good city to own an out of state investment property because houses are cheap, there are lots of qualified buyers, and cash flow is excellent especially with owner financing.
More Considerations When You Do All Cash Investment Property
I don’t worry about a bank giving me a mortgage for investment properties. I can close fast – in 10 days. That gets me some great under market value properties.
My real estate investment portfolio is safe and stable. I never worry about having a mortgage to pay when a renter skips town.
I incur less risk as I do not worry about appraisals on my properties. If your lender sees lower appraisals in your neighborhood, they may loan you less money.
In the real estate crash, I sold several of my all cash investment properties quickly when I needed money from my San Antonio investment property.
Buying all cash investment properties usually means you buy in affordable cities. Make sure you do research to figure out where to buy your all cash investment property. As of right now, prices are up in some markets, but if you save your cash, you may be able to pick up houses for a substantial discount in the next downturn.
In short, I recommend that people looking for an out of state investment property buy property all cash, as that is the best way to enjoy maximum cash flow with low risk.
If you are an investor or possible investor in California, you probably know the answer to that question! Many of my out of state investors in California cannot believe the sky high cost of investment properties in many of the high population areas of California, such as San Francisco, Los Angeles and San Diego. Great places to live, but for positive cash flow investing? Not so much! California investment property is very expensive.
If you are thinking about buying an out of state investment property for passive income, here is a good simple guide that can help:
How to Select Your Out of State Investing Market for Passive Income
Where you are going to invest in under market value properties depends on your real estate investing goals. Are you a flipper or a buy and hold investor? If you hang around my site long, you’ll learn I retired early with buy and hold investment properties that are owner financed. I’m a big believer in buy and hold long term cash flow – that is how I financially retired at just 28 in San Antonio – one of the best cities to invest in real estate, in my humble opinion.
Anyway, a good buy and hold market for passive income might not be the best flipping market. Here in San Antonio TX, flipping has gotten tough as the economy is booming as of January 2016; it’s hard for flippers to get properties cheap enough to make a good profit. For buy and hold investing though, I still make 10-12% per year, or $500-$700 per month in positive cash flow.
I’m biased, but TX is a great place for out of state investors – the population is soaring due to job growth.
As you think about where to buy out of state investment property and under market value properties, consider:
State law: Is the state friendly to property owners? You want to invest in a state that makes it easy to evict tenants or to foreclose. State that are tenant friendly, such as CA, make it so hard to evict or foreclose, you could lose your shirt.
Price to rent: What does rent cost compared to the price to buy? In my town, it’s 16.90, while in San Francisco it’s 30.05. Whoa! No wonder so many CA investors are investing in out of state investment properties.
These are not all the factors to consider when you are buying an out of state investment property instead of California investment property, but if those three areas look favorable, you probably could do well in that market and financially retire early as I did, in one of the best cities to invest in real estate. San Antonio investment property is excellent for cash flow.
How To Find Out Of State Investment Properties and Under Market Value Properties
Now that you know which market to buy your below market value investment properties, how are you going to locate that house? Most investors I know do it two ways:
They find a good real estate agent investor who is hooked up with excellent contractors, property inspectors, title company, real estate attorneys.
They find a good turnkey property provider. The house has been totally rehabbed and usually has tenants or buyers in place.
Which of these routes you go with will depend upon your investing goals again. Some out of state property investors want to have absolutely no headaches or management worries, so they just buy turnkey properties. Other out of state investors think that method is too expensive, so they manage their own rehabs and property management.
If you decide to find your own below market value properties in your chosen market, here’s what you’re looking at:
Buying Below Market Property Yourself
Advantages
You’ll get the house at a low price
High cap rate or ROI
Disadvantages
The house will not be producing income during the rehab and the time it takes to find a renter or an owner finance buyer
Rehab costs could shoot up if you don’t have reliable partners
Harder to manage the rehab and management from a distance
Difficulty in controlling material costs
Buying Turnkey Property
Advantages
Totally rehabbed
Tenant or buyer may already be in place
No work for you
Cost of material more predictable and stable
You know the quality of work you will get
Whole investment team is in place
Disadvantages
Higher initial cost
Lower ROI or cap rate
How big a difference are we looking at between buying a run down under market value house and buying a turnkey? Let’s take a look:
Run down property: Estate sale, $30k purchase, $30k in rehab – will produce 13% ROI with owner financing or renting.
Turnkey property: $80k purchase price, no repairs, will produce 9-10% ROI with owner financing or renting.
So which will it be? Most people would say you obviously go for the better ROI with the under market value property you do yourself. But remember, you are going to have to do a heck of a lot more work – at a distance – with the fixer upper property. A turnkey property will earn lower ROI, but it a lot less stress. At the very least, you might consider a good turnkey property if you are a beginner in real estate investing. That way, you can make some good positive cash flow as you develop your own investment property team.
It all boils down to how you look at investing in real estate. Investing by definition means using something to get some type of return. You just have to decide if you want to use just your money to get a return, or use your time AND money to get a potentially higher return.
Choose wisely based upon your personal investing goals, and you will hopefully be able to be financially retired on your time table.
Personally, if I were a usual buyer of California investment property, San Francisco investment property, Los Angeles investment property or San Diego investment property, I would strongly consider buying out of state investment property. Investment property is all about real estate cash flow…..it’s something you can rely on year in and year out, unlike hoping for appreciation.
