WEBVTT 00:00:00.000 --> 00:00:03.140 Maybe you are part of the modestly wealthy who 00:00:03.140 --> 00:00:05.960 finds themselves lucky enough to have some extra 00:00:05.960 --> 00:00:08.900 money and you want to put it towards a real estate 00:00:08.900 --> 00:00:10.859 investment because you heard that real estate 00:00:10.859 --> 00:00:14.939 investing is what can build passive income and 00:00:14.939 --> 00:00:18.170 generational wealth. But you live in the West 00:00:18.170 --> 00:00:21.629 Coast or maybe the Eastern Seaboard where housing 00:00:21.629 --> 00:00:25.429 prices, home prices are incredibly high. What 00:00:25.429 --> 00:00:28.190 do you do then? Well, today I'm going to talk 00:00:28.190 --> 00:00:31.269 about why I invest and will continue to invest 00:00:31.269 --> 00:00:35.590 out of state and the reasons why I'm doing this. 00:00:35.670 --> 00:00:38.770 Let's get into it right now. If we haven't met 00:00:38.770 --> 00:00:40.729 before, my name is Doug Varinas. I'm a licensed 00:00:40.729 --> 00:00:43.750 real estate agent in Washington and Oregon. I'm 00:00:43.750 --> 00:00:46.890 also an accredited investor. Today we're going 00:00:46.890 --> 00:00:49.289 to talk about out -of -state investing and why 00:00:49.289 --> 00:00:51.890 if you live in an expensive West Coast or East 00:00:51.890 --> 00:00:54.770 Coast market, you may want to consider investing 00:00:54.770 --> 00:00:57.570 out -of -state. So the first reason that I like 00:00:57.570 --> 00:00:59.549 to invest out -of -state is the price point. 00:00:59.729 --> 00:01:02.990 Because look, with a median sales price here 00:01:02.990 --> 00:01:06.629 of around $500 ,000, investing in real estate 00:01:06.629 --> 00:01:09.430 in an expensive West Coast market is exactly 00:01:09.430 --> 00:01:12.870 that, expensive. And so in a lot of cities in 00:01:12.870 --> 00:01:15.450 the Midwest and the South, you're looking at 00:01:15.450 --> 00:01:19.680 price point. points anywhere from $250 to $300 00:01:19.680 --> 00:01:23.099 to $350 max. And so you're really able to get 00:01:23.099 --> 00:01:26.340 in at a lower price point. And that is great 00:01:26.340 --> 00:01:28.900 for an out -of -state investor coming from an 00:01:28.900 --> 00:01:31.840 expensive market like Los Angeles, San Francisco, 00:01:32.060 --> 00:01:34.900 Portland, Seattle metro area. So that enables 00:01:34.900 --> 00:01:37.939 you to get your foot in the door without having 00:01:37.939 --> 00:01:43.930 to pay those exorbitant prices. So price... point 00:01:43.930 --> 00:01:46.390 is going to be my first reason that I like to 00:01:46.390 --> 00:01:48.549 invest out of state because it gives the moderately 00:01:48.549 --> 00:01:51.629 wealthy a sort of foot in the door in these markets. 00:01:51.849 --> 00:01:54.090 The next reason that I like investing out of 00:01:54.090 --> 00:01:57.290 state is going to be cash flow. So because there's 00:01:57.290 --> 00:01:59.909 a lower price of entry, but the price to rent 00:01:59.909 --> 00:02:02.129 ratios are still relatively high, you're going 00:02:02.129 --> 00:02:04.069 to cash flow pretty well. And it's not uncommon 00:02:04.069 --> 00:02:07.469 to cash flow $300 a month, which doesn't sound 00:02:07.469 --> 00:02:09.990 like a lot. So I'm going to be talking primarily 00:02:09.990 --> 00:02:12.509 about single family properties, single family 00:02:12.509 --> 00:02:15.599 homes. And $300 when you're doing your numbers 00:02:15.599 --> 00:02:18.560 conservatively is a pretty good amount every 00:02:18.560 --> 00:02:20.439 month. And again, you're looking to scale that 00:02:20.439 --> 00:02:22.639 into more rental properties. And then eventually 00:02:22.639 --> 00:02:25.840 you can stack into multifamily where you can 00:02:25.840 --> 00:02:28.800 start getting more and more cash flow per door. 00:02:29.259 --> 00:02:31.219 And that's a strategy a lot of people use to 00:02:31.219 --> 00:02:33.780 build wealth. But cash flowing $300 a month when 00:02:33.780 --> 00:02:35.560 you're running your numbers very conservatively 00:02:35.560 --> 00:02:38.680 is a great position to be in. And so I like cash 00:02:38.680 --> 00:02:40.860 flow. And you should always make sure your deal's 00:02:40.860 --> 00:02:43.379 cash flow. Do not buy a deal that does not cash 00:02:43.379 --> 00:02:45.759 flow in the hopes that it will someday. That 00:02:45.759 --> 00:02:49.360 typically ends up in disaster. So if you are 00:02:49.360 --> 00:02:51.020 watching this video so far and you're like, I'm 00:02:51.020 --> 00:02:52.500 sort of interested in investing out of state, 00:02:52.599 --> 00:02:55.159 how do I do that? I am currently offering my 00:02:55.159 --> 00:02:59.319 services for free. This isn't going to last long, 00:02:59.479 --> 00:03:01.020 but if you're looking to invest out of state, 00:03:01.159 --> 00:03:03.659 I can hook you up with properties that I do the 00:03:03.659 --> 00:03:07.800 analysis on. I have links and I have relationships 00:03:07.800 --> 00:03:09.800 with the professionals you're going to need, 00:03:10.000 --> 00:03:12.360 real estate agents. property managers, insurance 00:03:12.360 --> 00:03:14.699 agents, all the team members you're going to 00:03:14.699 --> 00:03:16.500 need if you're going to invest out of state because 00:03:16.500 --> 00:03:18.539 each one of these people becomes exponentially 00:03:18.539 --> 00:03:22.460 more important as you go along. So if you're 00:03:22.460 --> 00:03:24.340 looking to invest out of state, but you don't 00:03:24.340 --> 00:03:25.939 have a lot of time to do this stuff yourself 00:03:25.939 --> 00:03:27.439 and you're looking for kind of a white glove 00:03:27.439 --> 00:03:30.120 service, I am happy to help you. And for a limited 00:03:30.120 --> 00:03:32.080 time, I am doing that free. What you're going 00:03:32.080 --> 00:03:34.639 to need to do is just book a chat with me and 00:03:34.639 --> 00:03:37.199 the links provided to my tidy cow. You can schedule 00:03:37.199 --> 00:03:39.879 a chat. No biggie. If you even want to comment, 00:03:40.060 --> 00:03:42.949 consult. In the comments below, we can make this 00:03:42.949 --> 00:03:45.750 happen. So investing out of state, we've got 00:03:45.750 --> 00:03:48.870 a lower price point and we've got cash flow. 00:03:48.949 --> 00:03:51.830 The next reason I like to invest out of state 00:03:51.830 --> 00:03:55.110 is legislation. And this is becoming more and 00:03:55.110 --> 00:03:57.949 more important. When I first started, it was 00:03:57.949 --> 00:04:00.729 a little bit wacky and now it's just getting 00:04:00.729 --> 00:04:04.360 really wacky. So cities like Portland. and Minneapolis 00:04:04.360 --> 00:04:08.259 and San Francisco, you're getting crazy regulations 00:04:08.259 --> 00:04:11.960 that are just going above and beyond rational. 00:04:12.280 --> 00:04:14.479 And so we're seeing a lot of rent control and 00:04:14.479 --> 00:04:17.879 rent caps and basically the inability to evict 00:04:17.879 --> 00:04:21.319 anybody for any reason out of your property without 00:04:21.319 --> 00:04:23.839 giving them like cash for keys. So the legislation 00:04:23.839 --> 00:04:27.319 has been crazy. And that is driving investors 00:04:27.319 --> 00:04:30.399 out of these markets. So perfect for you if you're 00:04:30.399 --> 00:04:34.250 living in a market that's expensive. And then 00:04:34.250 --> 00:04:37.490 they're also getting wackadoo legislation that 00:04:37.490 --> 00:04:40.170 makes it harder to cash flow and to be a successful 00:04:40.170 --> 00:04:42.730 real estate investor because your tenants are 00:04:42.730 --> 00:04:44.509 trashing the place. They're not paying rent and 00:04:44.509 --> 00:04:47.069 there's no way to get them out because the legislation 00:04:47.069 --> 00:04:50.949 is super. tenant friendly. So legislation is 00:04:50.949 --> 00:04:53.430 a big reason why I like investing out of state 00:04:53.430 --> 00:04:55.610 in that you can do your due diligence and your 00:04:55.610 --> 00:04:58.589 research on which markets are going to have landlord 00:04:58.589 --> 00:05:00.810 friendly legislation. And this doesn't mean you 00:05:00.810 --> 00:05:02.970 provide some cruddy product that people aren't 00:05:02.970 --> 00:05:04.430 going to live in and take advantage of people. 00:05:04.509 --> 00:05:05.949 That's not what I'm about. It's not what you're 00:05:05.949 --> 00:05:08.870 about. But when people don't pay the rent, then 00:05:08.870 --> 00:05:11.670 it enables you to get them out. because them 00:05:11.670 --> 00:05:13.709 living there rent -free is stealing from you. 00:05:13.829 --> 00:05:16.370 So legislation is another reason I love out -of 00:05:16.370 --> 00:05:19.389 -state investing. The next reason I like out 00:05:19.389 --> 00:05:22.009 -of -state investing is demographics. You hear 00:05:22.009 --> 00:05:24.990 about this all the time. So people are leaving 00:05:24.990 --> 00:05:27.089 these states because they're over -regulated, 00:05:27.389 --> 00:05:30.610 they're over -taxed, they have their hand in 00:05:30.610 --> 00:05:33.490 everything. So they're just over -regulated and 00:05:33.490 --> 00:05:35.949 people are beginning to... leave because the 00:05:35.949 --> 00:05:38.629 quality of life and the expense. So it's one 00:05:38.629 --> 00:05:40.750 thing if like, you know, two decades ago you 00:05:40.750 --> 00:05:42.829 were living in California and it was expensive, 00:05:43.009 --> 00:05:45.449 but you were like, hey, look, it's expensive, 00:05:45.629 --> 00:05:48.129 but man, the lifestyle is so great here. The 00:05:48.129 --> 00:05:51.470 weather is great. People generally leave me alone. 00:05:51.870 --> 00:05:53.389 You know, that's a price you're willing to pay. 00:05:53.569 --> 00:05:55.610 But now it's like a double whammy because not 00:05:55.610 --> 00:05:58.069 only is it expensive, but now it's becoming unlivable 00:05:58.069 --> 00:06:02.810 because the excessive homeless populations, the 00:06:02.810 --> 00:06:05.509 general sort of anarchy vibe, like it's OK to 00:06:05.509 --> 00:06:07.990 steal, it's OK to shoplift and it's OK to riot 00:06:07.990 --> 00:06:10.189 and it's OK to like they're becoming more and 00:06:10.189 --> 00:06:12.370 more lawless. And so the quality of life is going 00:06:12.370 --> 00:06:14.810 down because if you have kids and you're exposing 00:06:14.810 --> 00:06:18.189 them to danger, basically. And I've seen this 00:06:18.189 --> 00:06:20.389 in Portland. when they had the open -air drug 00:06:20.389 --> 00:06:22.449 markets. Thankfully, they've gotten rid of those. 00:06:22.730 --> 00:06:26.069 It's still around, open drug use. And so they're 00:06:26.069 --> 00:06:29.399 just becoming unlivable. And so... When you get 00:06:29.399 --> 00:06:32.800 a real estate market that's expensive, it's unaffordable, 00:06:32.899 --> 00:06:35.819 and you get less livability, and companies are 00:06:35.819 --> 00:06:38.000 leaving these places. So they're leaving places 00:06:38.000 --> 00:06:41.420 like Washington, like Seattle. You just saw In 00:06:41.420 --> 00:06:43.759 -N -Out leave California for Tennessee. And so 00:06:43.759 --> 00:06:46.439 it's a perfect storm sending people elsewhere. 00:06:46.860 --> 00:06:48.860 And when they go elsewhere, well, where are they 00:06:48.860 --> 00:06:50.579 going to want to rent? Where are they going to 00:06:50.579 --> 00:06:52.160 live? They're going to live in your place. And 00:06:52.160 --> 00:06:54.699 so the demographics suggest that more people 00:06:54.699 --> 00:06:56.920 are going to be moving from these very expensive, 00:06:57.139 --> 00:07:00.339 highly - unregulated urban areas and states to 00:07:00.339 --> 00:07:04.160 places in the Midwest, in the South. That's the 00:07:04.160 --> 00:07:06.500 demographic shift that we're seeing. I expect 00:07:06.500 --> 00:07:09.879 this to continue. It might even be exacerbated 00:07:09.879 --> 00:07:12.319 by the fact that, look, housing is just unaffordable. 00:07:12.540 --> 00:07:15.879 But if you move to some of these cities in the 00:07:15.879 --> 00:07:18.060 Midwest, in the South, where the median price 00:07:18.060 --> 00:07:20.540 of a home is $250 ,000, like Fort Wayne, Indiana, 00:07:20.860 --> 00:07:23.480 Oklahoma City, you know, in the past, these places 00:07:23.480 --> 00:07:25.100 might have been backwaters where you're like, 00:07:25.420 --> 00:07:26.779 You know, especially if you live in the West 00:07:26.779 --> 00:07:28.879 Coast, you think the whole middle of America, 00:07:29.180 --> 00:07:31.779 or at least I did, tends to be some sort of wasteland 00:07:31.779 --> 00:07:33.699 where there's nothing going on. There's no restaurants. 00:07:33.899 --> 00:07:35.459 Well, that couldn't be further from the truth. 00:07:35.560 --> 00:07:37.800 It's pretty ignorant to think that. And when 00:07:37.800 --> 00:07:40.000 you get on the ground, like when I went to Columbus, 00:07:40.100 --> 00:07:42.480 Ohio, a few years back when I thought it was 00:07:42.480 --> 00:07:43.860 like, oh, it's going to be the most boring place 00:07:43.860 --> 00:07:45.720 ever. And it was awesome. People were great. 00:07:45.959 --> 00:07:47.740 They had a bunch of breweries and restaurants. 00:07:47.959 --> 00:07:49.759 It's a college town. You know, I didn't know 00:07:49.759 --> 00:07:51.620 anything about it, but I presumed to know about 00:07:51.620 --> 00:07:53.980 Columbus, Ohio. I knew nothing. Oklahoma City, 00:07:54.120 --> 00:07:56.730 another place. that seems totally awesome, vibrant 00:07:56.730 --> 00:07:59.990 restaurant scene, businesses moving there, development 00:07:59.990 --> 00:08:02.970 happening because they're not regulated and the 00:08:02.970 --> 00:08:05.769 prices and the cost of living are lower. And 00:08:05.769 --> 00:08:08.949 so if you're a 25 year old and you grew up in 00:08:08.949 --> 00:08:12.250 San Francisco or you grew up in Los Angeles or 00:08:12.250 --> 00:08:14.160 you grew up in Seattle. and you just can't get 00:08:14.160 --> 00:08:16.600 a foothold as far as buying a home, you have 00:08:16.600 --> 00:08:18.759 more options now, especially if you work remotely. 00:08:18.959 --> 00:08:20.420 And even if you don't, a lot of the corporate 00:08:20.420 --> 00:08:23.120 heads are moving to these places. And so I see 00:08:23.120 --> 00:08:25.240 that shift happening more and more. It's something 00:08:25.240 --> 00:08:27.360 I would do if I was in that position. I'm Gen 00:08:27.360 --> 00:08:29.860 E, Gen Z, Gen Alpha. Yeah, I'm going to move 00:08:29.860 --> 00:08:31.680 somewhere else. I'm going to move to a place 00:08:31.680 --> 00:08:34.389 where I can afford that. has a higher quality 00:08:34.389 --> 00:08:36.850 of life. And so I think that demographic shift 00:08:36.850 --> 00:08:39.929 is going to continue. And so that's another reason 00:08:39.929 --> 00:08:42.830 I like to invest in out of state places, because 00:08:42.830 --> 00:08:45.409 in the end, like I want to buy places where I 00:08:45.409 --> 00:08:47.490 want to live and I think are good places. And 00:08:47.490 --> 00:08:51.830 so these cities like in Atlanta, Georgia, Columbia, 00:08:52.070 --> 00:08:54.990 South Carolina, Fort Wayne, Indiana. Cincinnati, 00:08:55.230 --> 00:08:57.669 Ohio, like I mentioned, Oklahoma City. These 00:08:57.669 --> 00:09:01.289 are all livable, really good places to live with 00:09:01.289 --> 00:09:03.529 affordable housing and a fairly high standard 00:09:03.529 --> 00:09:06.210 of living. Are all of them going to have the 00:09:06.210 --> 00:09:09.730 best job options? Depending on what you do, right? 00:09:09.929 --> 00:09:12.769 But if you're in the medical field, there's always 00:09:12.769 --> 00:09:15.409 a place for you. If you're doing sales, if you're 00:09:15.409 --> 00:09:17.610 doing tech, a lot of times that's remote. Again, 00:09:17.809 --> 00:09:19.629 you have a lot of options, so why not take advantage 00:09:19.629 --> 00:09:23.259 of them? The last reason is appreciation. Now, 00:09:23.279 --> 00:09:25.480 look, because of the reasons I just mentioned, 00:09:25.600 --> 00:09:28.279 like I expect that these places might experience 00:09:28.279 --> 00:09:31.580 asymmetrical appreciation because before you 00:09:31.580 --> 00:09:34.559 bought here because it was low price of entry 00:09:34.559 --> 00:09:36.820 and it was cash flowing, like I mentioned. So 00:09:36.820 --> 00:09:38.840 these were considered cash flow markets. But 00:09:38.840 --> 00:09:42.529 now. Cleveland, Ohio, in the last year or something, 00:09:42.590 --> 00:09:44.710 has appreciated more than the national average 00:09:44.710 --> 00:09:47.970 by far. It's like 8%. And this used to be considered 00:09:47.970 --> 00:09:50.990 a cash flow market where you weren't going to 00:09:50.990 --> 00:09:53.309 get any equity, like your equity appreciation 00:09:53.309 --> 00:09:55.440 was going to be limited. But I think we're going 00:09:55.440 --> 00:09:58.299 to see that happen less and less because if Cleveland 00:09:58.299 --> 00:10:00.879 can go up 8%, a lot of these other places can 00:10:00.879 --> 00:10:03.320 also go up if they haven't already. And so while 00:10:03.320 --> 00:10:05.159 you're seeing softening in these markets that 00:10:05.159 --> 00:10:07.440 are kind of overbought, you know, like a Phoenix, 00:10:07.580 --> 00:10:10.600 Arizona, where's another one like an Austin? 00:10:10.700 --> 00:10:13.259 So these were places where people rushed to. 00:10:14.780 --> 00:10:17.220 from California and the prices got bid up, they're 00:10:17.220 --> 00:10:19.659 starting to come back down to earth, which is 00:10:19.659 --> 00:10:21.440 a good opportunity too. But a lot of these other 00:10:21.440 --> 00:10:24.019 smaller towns, and I'm thinking like Raleigh 00:10:24.019 --> 00:10:27.399 -Durham area, it's a little more expensive, but 00:10:27.399 --> 00:10:29.379 you're seeing a lot of appreciation there. So 00:10:29.379 --> 00:10:31.799 I don't think you need to sacrifice appreciation 00:10:31.799 --> 00:10:34.559 for cashflow. I think you can get them both in 00:10:34.559 --> 00:10:37.620 these markets and they might be more asymmetrical 00:10:37.620 --> 00:10:40.659 the more people move there. So we never know 00:10:40.659 --> 00:10:42.299 what's going to happen, but these are the reasons 00:10:42.299 --> 00:10:44.980 why I love investing. investing out of state 00:10:44.980 --> 00:10:47.580 if you live in an expensive real estate market 00:10:47.580 --> 00:10:50.539 like Oregon, Washington, California, New York, 00:10:50.620 --> 00:10:53.019 Boston. It's going to be the lower price point, 00:10:53.159 --> 00:10:58.379 the cash flow opportunities, the favorable legislation, 00:10:58.740 --> 00:11:00.799 the demographics, more people moving there. And 00:11:00.799 --> 00:11:02.779 finally, the appreciation. I think that we've 00:11:02.779 --> 00:11:04.100 turned a corner and we're going to see these 00:11:04.100 --> 00:11:07.029 places. appreciate just as much as anywhere else. 00:11:07.169 --> 00:11:09.529 Again, if you want to schedule a free consult 00:11:09.529 --> 00:11:11.309 with me, if you're interested in investing in 00:11:11.309 --> 00:11:13.669 a place like Cincinnati, Ohio, great choice, 00:11:13.809 --> 00:11:17.309 Cleveland, the greater Atlanta area, Oklahoma 00:11:17.309 --> 00:11:20.529 City, I mentioned Fort Wayne, Indiana, Raleigh 00:11:20.529 --> 00:11:23.590 area, schedule a consult with me and we can talk 00:11:23.590 --> 00:11:26.509 about how we can make that happen because it's 00:11:26.509 --> 00:11:29.289 a great opportunity to do that right now. Just 00:11:29.289 --> 00:11:31.710 given how the market is softening. Hope you've 00:11:31.710 --> 00:11:33.710 enjoyed this. If you do, if you found any value 00:11:33.710 --> 00:11:37.250 in this, please gently tap the like button and 00:11:37.250 --> 00:11:39.850 consider subscribing. I appreciate you and hope 00:11:39.850 --> 00:11:41.669 you have a wonderful day. See you on the next 00:11:41.669 --> 00:11:41.909 episode.