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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: getting there pnw on March 01, 2019, 05:23:37 PM

Title: LOCL remote investment cuz insane cap rate
Post by: getting there pnw on March 01, 2019, 05:23:37 PM: I've always invested locally so far, but I'm in Seattle where cap rates, COC, whatever you want to look at, aren't good.

Thinking about moving about $50k-$100k (as the 25% down for a $200k to $400k property) to a LOCL place with high cap rates. E.g., there's an 11 unit multifamily rental for sale right now in Pine Bluff, AR, where they are asking $220k and state a 21% cap rate. I know I'd have to get a PM, and probably a contractor to do some fix-up (beyond standard handyman stuff). I'd also go check it out personally first. I saw some properties I like in Georgia and Arizona too.

My next step is to pick some properties, fly there, find PMs and contractors and go for it, but I thought I'd see what my fellow mustachians (I'm aspiring) think.
Title: Re: LOCL remote investment cuz insane cap rate
Post by: Blindsquirrel on March 02, 2019, 10:59:14 PM: Ohio is not a bad place either.
Title: Re: LOCL remote investment cuz insane cap rate
Post by: tralfamadorian on March 12, 2019, 01:31:23 PM: Investing from a high cost/high income area into a lower cost area can be a great bit of real estate arbitrage. Just be careful that you are not being dazzled by the low price/high cap and are looking at the long term economic health of where you're investing.

I did some quick google fu for Pine Bluff, AR and this is what I found:
Population change from 2010-2017 (https://www.census.gov/quickfacts/pinebluffcityarkansas) (latest available data): -12.4%
https://www.pbcommercial.com/news/20180322/pb-area-sees-largest-pop-drop-in-state
Poverty rate (https://www.census.gov/quickfacts/pinebluffcityarkansas): 30.4%
Job Growth: pretty shitty (https://www.deptofnumbers.com/employment/arkansas/pine-bluff)
(https://chart.apis.google.com/chart?chxt=x,y&cht=lc&chs=594x200&chxs=0,666666,11,.3|1,666666,11,-1&chd=s:ppropopoprqqppppppoonmlmompmkkkkkkkkkllnnppsqpqnooopppqpppyy200zyzyyxzz10ywvvwxwwjikjhihhgfffefeeeefffeddedeccecbaabaZZaZbbaaYZZYXWWaWXXXZZYYZXXWWWVUTSSTTSSRPNPNPMKJJJIIIJIIHJIKHIGHHHGGGGGGGHHHHGGGGFFEEDEFEEEEEEEEDEEDEDEEDCCC,zzzyxwvvwvvuttuuuutttssttuuuttssttssrrrrtuwxwxxxxxwxyz0111123333332112221zxwwxxxxwwwwvuuutttsssstuuuutsrrrqqqqqqonnnmdeefghgfeeddcccdccccdddeedcaZZYWVUTTTTSRQPPPONMKJJJJKKKKKLMMIJJIJJJJJJJJJKKKKJJJKJJIIIIIIIIIJJIIGGGFFEGFFEEE&chxl=0:||||||||||||||||||||||2002||||||||||||||||||||||||2004||||||||||||||||||||||||2006||||||||||||||||||||||||2008||||||||||||||||||||||||2010||||||||||||||||||||||||2012||||||||||||||||||||||||2014||||||||||||||||||||||||2016||||||||||||||||||||||||2018||||||||||||1:|32K|34.5K|37.0K|39.5K|42.0K|44.5K&chg=10.71,20.00,1,2,9.38,0&chco=0000cc,1db725,ffa500,ff1100,555555&chf=c,ls,0,ffffff,0.0491,f5f5f5,0.0402,ffffff,0.3214,f5f5f5,0.0848,ffffff,0.5089)
Umemployment: Above national average (https://fred.stlouisfed.org/series/PBFUR)
https://www.pbcommercial.com/news/20190103/official-pb8217s-high-unemployment-rate-not-all-bad (https://www.pbcommercial.com/news/20190103/official-pb8217s-high-unemployment-rate-not-all-bad)
Average Rent: $680 and stagnant (https://www.deptofnumbers.com/rent/arkansas/pine-bluff/)

So, basically Pine Bluff, AR is a terrible place to consider buying an investment property. As you can see, I pulled all this info was easily available sources- government data and the local paper.
Title: Re: LOCL remote investment cuz insane cap rate
Post by: HockeyMan on March 19, 2019, 09:35:16 PM: I'm in Seattle as well, but from Ohio originally. I posted about a similar topic some time ago.

I'm still in the market, but haven't pulled the trigger on an out of town investment property. Let me know if you're interested in sharing notes or conducting some joint research.