Maybe you are part of the modestly wealthy who
finds themselves lucky enough to have some extra
money and you want to put it towards a real estate
investment because you heard that real estate
investing is what can build passive income and
generational wealth. But you live in the West
Coast or maybe the Eastern Seaboard where housing
prices, home prices are incredibly high. What
do you do then? Well, today I'm going to talk
about why I invest and will continue to invest
out of state and the reasons why I'm doing this.
Let's get into it right now. If we haven't met
before, my name is Doug Varinas. I'm a licensed
real estate agent in Washington and Oregon. I'm
also an accredited investor. Today we're going
to talk about out -of -state investing and why
if you live in an expensive West Coast or East
Coast market, you may want to consider investing
out -of -state. So the first reason that I like
to invest out -of -state is the price point.
Because look, with a median sales price here
of around $500 ,000, investing in real estate
in an expensive West Coast market is exactly
that, expensive. And so in a lot of cities in
the Midwest and the South, you're looking at
price point. points anywhere from $250 to $300
to $350 max. And so you're really able to get
in at a lower price point. And that is great
for an out -of -state investor coming from an
expensive market like Los Angeles, San Francisco,
Portland, Seattle metro area. So that enables
you to get your foot in the door without having
to pay those exorbitant prices. So price... point
is going to be my first reason that I like to
invest out of state because it gives the moderately
wealthy a sort of foot in the door in these markets.
The next reason that I like investing out of
state is going to be cash flow. So because there's
a lower price of entry, but the price to rent
ratios are still relatively high, you're going
to cash flow pretty well. And it's not uncommon
to cash flow $300 a month, which doesn't sound
like a lot. So I'm going to be talking primarily
about single family properties, single family
homes. And $300 when you're doing your numbers
conservatively is a pretty good amount every
month. And again, you're looking to scale that
into more rental properties. And then eventually
you can stack into multifamily where you can
start getting more and more cash flow per door.
And that's a strategy a lot of people use to
build wealth. But cash flowing $300 a month when
you're running your numbers very conservatively
is a great position to be in. And so I like cash
flow. And you should always make sure your deal's
cash flow. Do not buy a deal that does not cash
flow in the hopes that it will someday. That
typically ends up in disaster. So if you are
watching this video so far and you're like, I'm
sort of interested in investing out of state,
how do I do that? I am currently offering my
services for free. This isn't going to last long,
but if you're looking to invest out of state,
I can hook you up with properties that I do the
analysis on. I have links and I have relationships
with the professionals you're going to need,
real estate agents. property managers, insurance
agents, all the team members you're going to
need if you're going to invest out of state because
each one of these people becomes exponentially
more important as you go along. So if you're
looking to invest out of state, but you don't
have a lot of time to do this stuff yourself
and you're looking for kind of a white glove
service, I am happy to help you. And for a limited
time, I am doing that free. What you're going
to need to do is just book a chat with me and
the links provided to my tidy cow. You can schedule
a chat. No biggie. If you even want to comment,
consult. In the comments below, we can make this
happen. So investing out of state, we've got
a lower price point and we've got cash flow.
The next reason I like to invest out of state
is legislation. And this is becoming more and
more important. When I first started, it was
a little bit wacky and now it's just getting
really wacky. So cities like Portland. and Minneapolis
and San Francisco, you're getting crazy regulations
that are just going above and beyond rational.
And so we're seeing a lot of rent control and
rent caps and basically the inability to evict
anybody for any reason out of your property without
giving them like cash for keys. So the legislation
has been crazy. And that is driving investors
out of these markets. So perfect for you if you're
living in a market that's expensive. And then
they're also getting wackadoo legislation that
makes it harder to cash flow and to be a successful
real estate investor because your tenants are
trashing the place. They're not paying rent and
there's no way to get them out because the legislation
is super. tenant friendly. So legislation is
a big reason why I like investing out of state
in that you can do your due diligence and your
research on which markets are going to have landlord
friendly legislation. And this doesn't mean you
provide some cruddy product that people aren't
going to live in and take advantage of people.
That's not what I'm about. It's not what you're
about. But when people don't pay the rent, then
it enables you to get them out. because them
living there rent -free is stealing from you.
So legislation is another reason I love out -of
-state investing. The next reason I like out
-of -state investing is demographics. You hear
about this all the time. So people are leaving
these states because they're over -regulated,
they're over -taxed, they have their hand in
everything. So they're just over -regulated and
people are beginning to... leave because the
quality of life and the expense. So it's one
thing if like, you know, two decades ago you
were living in California and it was expensive,
but you were like, hey, look, it's expensive,
but man, the lifestyle is so great here. The
weather is great. People generally leave me alone.
You know, that's a price you're willing to pay.
But now it's like a double whammy because not
only is it expensive, but now it's becoming unlivable
because the excessive homeless populations, the
general sort of anarchy vibe, like it's OK to
steal, it's OK to shoplift and it's OK to riot
and it's OK to like they're becoming more and
more lawless. And so the quality of life is going
down because if you have kids and you're exposing
them to danger, basically. And I've seen this
in Portland. when they had the open -air drug
markets. Thankfully, they've gotten rid of those.
It's still around, open drug use. And so they're
just becoming unlivable. And so... When you get
a real estate market that's expensive, it's unaffordable,
and you get less livability, and companies are
leaving these places. So they're leaving places
like Washington, like Seattle. You just saw In
-N -Out leave California for Tennessee. And so
it's a perfect storm sending people elsewhere.
And when they go elsewhere, well, where are they
going to want to rent? Where are they going to
live? They're going to live in your place. And
so the demographics suggest that more people
are going to be moving from these very expensive,
highly - unregulated urban areas and states to
places in the Midwest, in the South. That's the
demographic shift that we're seeing. I expect
this to continue. It might even be exacerbated
by the fact that, look, housing is just unaffordable.
But if you move to some of these cities in the
Midwest, in the South, where the median price
of a home is $250 ,000, like Fort Wayne, Indiana,
Oklahoma City, you know, in the past, these places
might have been backwaters where you're like,
You know, especially if you live in the West
Coast, you think the whole middle of America,
or at least I did, tends to be some sort of wasteland
where there's nothing going on. There's no restaurants.
Well, that couldn't be further from the truth.
It's pretty ignorant to think that. And when
you get on the ground, like when I went to Columbus,
Ohio, a few years back when I thought it was
like, oh, it's going to be the most boring place
ever. And it was awesome. People were great.
They had a bunch of breweries and restaurants.
It's a college town. You know, I didn't know
anything about it, but I presumed to know about
Columbus, Ohio. I knew nothing. Oklahoma City,
another place. that seems totally awesome, vibrant
restaurant scene, businesses moving there, development
happening because they're not regulated and the
prices and the cost of living are lower. And
so if you're a 25 year old and you grew up in
San Francisco or you grew up in Los Angeles or
you grew up in Seattle. and you just can't get
a foothold as far as buying a home, you have
more options now, especially if you work remotely.
And even if you don't, a lot of the corporate
heads are moving to these places. And so I see
that shift happening more and more. It's something
I would do if I was in that position. I'm Gen
E, Gen Z, Gen Alpha. Yeah, I'm going to move
somewhere else. I'm going to move to a place
where I can afford that. has a higher quality
of life. And so I think that demographic shift
is going to continue. And so that's another reason
I like to invest in out of state places, because
in the end, like I want to buy places where I
want to live and I think are good places. And
so these cities like in Atlanta, Georgia, Columbia,
South Carolina, Fort Wayne, Indiana. Cincinnati,
Ohio, like I mentioned, Oklahoma City. These
are all livable, really good places to live with
affordable housing and a fairly high standard
of living. Are all of them going to have the
best job options? Depending on what you do, right?
But if you're in the medical field, there's always
a place for you. If you're doing sales, if you're
doing tech, a lot of times that's remote. Again,
you have a lot of options, so why not take advantage
of them? The last reason is appreciation. Now,
look, because of the reasons I just mentioned,
like I expect that these places might experience
asymmetrical appreciation because before you
bought here because it was low price of entry
and it was cash flowing, like I mentioned. So
these were considered cash flow markets. But
now. Cleveland, Ohio, in the last year or something,
has appreciated more than the national average
by far. It's like 8%. And this used to be considered
a cash flow market where you weren't going to
get any equity, like your equity appreciation
was going to be limited. But I think we're going
to see that happen less and less because if Cleveland
can go up 8%, a lot of these other places can
also go up if they haven't already. And so while
you're seeing softening in these markets that
are kind of overbought, you know, like a Phoenix,
Arizona, where's another one like an Austin?
So these were places where people rushed to.
from California and the prices got bid up, they're
starting to come back down to earth, which is
a good opportunity too. But a lot of these other
smaller towns, and I'm thinking like Raleigh
-Durham area, it's a little more expensive, but
you're seeing a lot of appreciation there. So
I don't think you need to sacrifice appreciation
for cashflow. I think you can get them both in
these markets and they might be more asymmetrical
the more people move there. So we never know
what's going to happen, but these are the reasons
why I love investing. investing out of state
if you live in an expensive real estate market
like Oregon, Washington, California, New York,
Boston. It's going to be the lower price point,
the cash flow opportunities, the favorable legislation,
the demographics, more people moving there. And
finally, the appreciation. I think that we've
turned a corner and we're going to see these
places. appreciate just as much as anywhere else.
Again, if you want to schedule a free consult
with me, if you're interested in investing in
a place like Cincinnati, Ohio, great choice,
Cleveland, the greater Atlanta area, Oklahoma
City, I mentioned Fort Wayne, Indiana, Raleigh
area, schedule a consult with me and we can talk
about how we can make that happen because it's
a great opportunity to do that right now. Just
given how the market is softening. Hope you've
enjoyed this. If you do, if you found any value
in this, please gently tap the like button and
consider subscribing. I appreciate you and hope
you have a wonderful day. See you on the next
episode.