Hi there! My friends call me OB and I’m a 32 year old engineer living in Los Angeles, who invests in out of state rentals while holding a full time job.
Let’s be real here. I’m not making the big bucks at my day job. I brown bag it to work 4 days a week and sometimes, you may catch me eating at my desk on a Friday <gasp!>. I don’t splurge on shiny new gadgets (I used a jail broken iphone for years), fancy TV’s (finally bought my first flat screen in 2015, woot woot!), or flashy cars.
Though my wife and I do love to travel. Our families are spread across 3 continents and we try to visit one of them about every other year. And living in LA, there’s no shortage of great restaurants to eat at so we do eat out often on Friday and Saturday nights.
Despite saving for a couple years, with the median home price at just over $900k where I live, I was still short on a 20% down payment! That’s when it dawned on me. I could either continue to save for another couple years or I be smarter with my money. Hello real estate investing.
Why real estate?
Most wealthy individuals have built their riches either through investing in real estate or building up a business. For me, I had a full time job that I enjoyed so I needed a strategy that was somewhat passive.
Not only can real estate be passive, but once I learned about monthly cash flow, tax benefits, equity pay down by your tenant, and appreciation potential of rental real estate, I was convinced.
So I knew I wanted to invest in real estate, but my local market here in Los Angeles still posed 1 major problem. It’s expensive! The down payment alone would have burned through all of my savings. To put all my hard earned cash into just one property was not only too risky, but it would also keep me on the sidelines for at least a couple more years before I could save up for another investment.
The other challenge with LA is that I was looking to invest for cash flow, not appreciation. Not only did the expensive LA market make it difficult to get into the investment game, but when analyzing these deals I quickly realized that they weren’t deals at all. After the mortgage payment, taxes, insurance, and maintenance, they often didn’t cash flow at all….Sorry but $25 a month of net cash flow is not worth the risk to buy real estate and you can forget about 10% returns!
What did I do?
After running the numbers in LA, I began to venture further and further away from my home. Before I knew it, I was looking at properties several hours away. That’s when I decided to consider looking outside of CA in search of a market that would not only cash flow more, but also one that did not cost several hundreds of thousands of dollars to acquire. By the summer of 2014, I purchased my first rental property over 1500 miles away, rehabbed it, and rented it out for positive cash flow.
6 months later I picked up another property, repeated the process, and got hooked on generating cash flow through income producing rental property.
So what’s this site about?
By no means am I a real estate expert and I still have much to learn. There’s no right or wrong way to invest as long as you’re making a profit. I just happen to focus on residential buy and holds out of state.
I have 2 goals with this site:
- Document my rental properties and show how they perform over time.
- Share tools, strategies, and tips for anyone who’s interested in investing in rental property out of state.
I’m not here to make any hard sells – just real life examples and recommendations based on my own experience with out of state rental properties.
If you find yourself priced out of your local real estate market, but still want to invest in real estate, then you’ve come to the right place. Subscribe now to my blog to learn awesome tips, access to my own tools, and updates to various markets that I track.
Thank you for taking the time to read this and hopefully I’ll see you around on the blog!