BiggerPockets Real Estate Podcast - 960: No Cash Flow in Your Market? How to Invest Out-of-State Like a Pro w/Jessica and Shyd Coloma and Michael Gallagher

Episode Date: May 27, 2024

Looking for monthly cash flow but live in an expensive real estate market? It sounds like you need to start buying rental property OUT of state. After realizing that real estate investing could be the wealth-builder they needed, Jessica and Shyd Coloma wanted to get in the game. But in pricey Southern California, finding passive-income generating rental properties was next to impossible. So, they began looking out of state. Thanks to BiggerPockets Agent Finder, they met Ohio-based agent Michael Gallagher, and now, just a couple of years later, they have a cash-flowing rental property portfolio! Michael was able to quickly show the couple which cities offered cash flow, appreciation, and a bit of both, as well as the parts of town that were seeing the most growth. They ended up buying a duplex for under $100,000, saw instant cash flow, and decided they needed more! In today’s show, they’ll walk through all the numbers of their first and second deals, how their rock star agent saved the day multiple times, and what you MUST look for in an out-of-state investing market. Need an investor-friendly agent? Use BiggerPockets Agent Finder to connect with local agents in your investing area for free!  In This Episode We Cover Long-distance real estate investing and how to buy rentals from 2,000+ miles away  Building your "buy box" so you know exactly what you want in an out-of-state market Cash flow vs. appreciation and which cities in Ohio offer which benefits  Finding a property manager remotely and whether local managers beat national ones Short-term rentals, medium-term rentals, and the strategies to get even more cash flow out of your rental One huge closing hiccup Jessica and Shyd ran into that you should be on the lookout for And So Much More! (00:00) Intro (01:22) Investing Out of State   (08:24) $87K First Rental Property!  (13:07) Finding a Property Manager  (15:06) 2nd Deal in Columbus  (23:34) Closing Hiccups and Final Numbers (29:09) Keep Investing in Ohio? (31:29) Ready to Invest Out of State?  Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-960 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you've been on the fence about buying real estate in the current market cycle, maybe you've been looking for property listings in other cities, maybe you've even found deals that seem like they work. But for some reason, you've been hesitant to act on them because you just don't have connections or boots on that ground in the area that give you the confidence to go ahead and pull the trigger. In today's episode, we're going to talk to two investors who did it. They jumped into out-of-state investing on their very first deal, and they have some amazing tips and stories to share with you today. Welcome to the Bigger Pockets Real Estate podcast.

I'm your host, Dave Meyer. And in this episode, we're going to be talking to Sid and Jessica Coloma about deals that they've done in the last year, investing out of state. We're going to learn from them how they went about picking their market and how they wisely diversified a couple of different investing strategies into just a single property. That's a really cool approach. We're also going to hear from their agent Michael Gallagher and how he helped them find the right deal without them even coming out to visit the market that they invested in. They're going to share the tricks and tactics that they use and pay attention because these are strategies and tactics that pretty much anyone can use if you're considering investing out of state.

Let's get into it. Jessica, Sid, Michael, welcome all three of you to the show. Thanks for joining us today. Thanks for having us. Thanks for having us. Great. Well, Sid and Jessica, tell us where are you guys joining us from? Right now, we are in Ventura County, California, which is the northern county bordering Los Angeles County. All right. Great. And what about you, Michael?

I sit in Columbus, Ohio. All right. Well, it sounds like we're in two very different parts of the country. I'm in Amsterdam. We're in all different parts of the world, but I'm excited that we can all be sitting here talking to each other. Sid and Jessica, let's start with you. I understand your investing journey started a while back when you were walking your dog. What's the story there? So, yes, this is one of my favorite real estate stories to tell. So, yeah, it started off just our regular, you know, evening walk with the dog. And Sid, you know, I thought was just starting conversation.

He was like, what do you think about, you know, owning an investment property as, you know, maybe a passive income kind of thing, but mostly to start generational wealth, maybe have something in our back pockets for retirement. So what do you think of that? And then thinking, again, this is just dog walking conversation. I was like, yeah, that's something we can explore and talk about and learn about. And Sid says, okay, good, because I read half a book and I want to refinance on our house. I want to buy an investment property. I want it to be out of state, and I want it to be before the end of the year. And. Whoa. Very specific. I like it. I was like, oh, I might have missed something in that conversation. But yeah, so considering that

this conversation happened July of 2021, we were already in the second half of that. year that he wanted to have this all completed by. So, I mean, I technically had already said yes. So you had to do it at that point. You were, it was no longer a choice. Well, Sid, what got you to read that book in the first place? Something must have piqued your interest about real estate. Yeah. I mean, so for a while, I have been interested in passive investing. I had actually had Brandon Turner's How to Invest in Real Estate book in my Amazon wish list for probably like, I don't know, a year and a half. Then COVID happened. Started looking into a little bit more, started reading that book and that book as I was,

yeah, like Jessica said, halfway through. I was like, wow, I really like how there's kind of step by steps, you know, what you should do, what to look for. And I was like, I think we could really do this. And that's kind of what kicked it all off. Okay. And why did you pick out of state. It sounds like you went from reading half a book to having a very specific plan, which is very admirable. But how did you formulate that specific plan? Yeah. Well, I mean, us being in Southern California, Ventura County is a high cost of living, you know, just running numbers on a standard rental. Everything kind of doesn't pencil out really unless you're house hacking or something like that. So knowing that, we had to kind of go look into markets that

actually gave us a little bit more of the cash flow that we were looking for at the time. Got it. Okay. And did you have an easy time or picking a market or how did you go about that? No, we didn't. So we, I don't know, we probably interviewed, I don't know, maybe like six, seven different agents from like Texas, South Carolina. Lots of different states, lots of different cities within those states. And so at some point, we did settle out of Ohio. Actually, there was an episode earlier on the real estate rookie podcast, I think you Dave were,

you were the one on it. And I remember Columbus was number one or two on that list. So I worked for the, at that time, United States Air Force as a contractor and had gone out to Dayton, Ohio, a couple times.

And so I was like, oh, I was like, well, Dayton I know is next to Columbus. Maybe we were just set on there. I've been there before. I know kind of what's there. I kind of looked into the statistics, and it kind of worked out. So, you know, at that point,

I think after we had talked to seven different agents, like, we just need to pick something now, heard your podcast, did some research, and I was like, okay, I think Ohio will be it. Awesome. Well, I assume, Michael, I'm sorry, we haven't forgot about you, but we had to sort of lay the foundation here. I assume, Michael, this is where you entered the picture. Yeah, exactly. Yeah, actually through the bigger pockets agent finder. Sid and Jessica found me in Dayton, and away we went looking and actually found their initial property in Dayton on the bigger pockets classifieds there that are posted on the site. So we found it through that as well. Okay. Great. So before we did back into the story, Michael, maybe you can provide

our listeners with some background on the Ohio market, specifically where the deals you guys have done together take place, which is, if I understand correctly, Columbus and Dayton. Yeah, exactly. So in the whole state of Ohio, you have pretty much three primary metropolitan areas. In the northeast of the state is Cleveland. In the literal dead center, middle of the state is Columbus, Ohio, which is the capital of the state. And then in the southwestern corner of the state bordering both Kentucky and Indiana, you have Cincinnati. Secondary markets to what I would consider those primary markets are Dayton, Toledo, and kind of the Akron, Canton, maybe Youngstown area. And then there are further tertiary markets after that.

So Dayton is about an hour drive, maybe 45-minute drive from Collegiate. Columbus, directly west on I-70, to give you a reference. Dayton has about roughly a million less people than Columbus, so it's significantly smaller. The main economic drivers there are the Air Force Base, the Air Force Museum, University of Dayton, so education is there. The Dayton Children's Hospital is a pretty large medical system there. And then, of course, kind of automation, industry, manufacturing, kind of standard Midwestern-type things that you'd expect from a city like that. And so, Jessica, when you heard about Ohio,

what made you confident in these markets? Well, initially, only Sid had been to Ohio. So again, very beginning, I was literally along for the ride. But, I mean, Sid is very data-driven. He showed me the numbers. Michael was able to eventually also show me the numbers. I was able to eventually read the book too. I mean, I got the audio book, so I was able to catch up on that level. But really, it was just seeing the numbers that Michael and Sid were able to generate together. Great. Now that we've learned how Sid and Jessica got their start, how they selected a market, and why. After the break, we're going to learn about what deals Michael helped them get. Stick with us. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically

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It was already tenant-occupied. So, yeah, we were able to purchase that house. It was relatively cheap at the time. I think around $87,000 is what we ended up buying it for, which is what made us want to go there in the first place because we knew there's no way we're finding a duplex like that here in California. And so we ran the numbers, ended up working, considering up-ex,

Cap-X, property management fees and everything like that. Yeah, ended up working and then we ended up pulling the trigger. Nice. And what about this particular property made sense? Like, what numbers were you looking for? What were you prioritizing in your search?

Yeah, so from the book, I do remember, it was kind of like a rule of thumb, you know, at least each door should give you about $200 cash flow after all expenses are considered. It did meet that. It kind of did go to like the, I think at the time, like a 10% cash on cash, which is kind of what we were going for.

We knew it wasn't going to be an appreciation in play. We just kind of wanted to get into something that made us feel like we could get started, see if we did like it. So those numbers didn't make sense. At the end of the day, it did end up cash flowing about like $450-ish a month depending. But yeah, so it did hit it. And yeah, it's been working out. Awesome. Well, I want everyone to listen to what Sid and Jessica are talking about here.

Because one of the main reasons, it sounds like they were able to pull the trigger on this deal is they knew exactly what they were looking for. And, you know, they acknowledged that there are tradeoffs in each market. And even though this deal might not have been the best appreciation play long term, they were prioritizing cash flow and they found it. Now, Michael, I imagine there's a lot of people sitting out here listening to this podcast, a little jealous of being able to find cash flowing duplexes for under $100,000. Is this something that's common in Dayton? In certain areas, yes, absolutely. Dayton's definitely a lower cost market. Even into the suburbs, you can get a nice home for, you know, $250 and under.

But certainly in and around downtown, it's not uncommon to see the 1% rule, if not better. Granted, the rents are lower. I mean, average rents, at least in the area of this duplex, are probably $700 to $800 a month. So you're not talking, you know, huge monetary gains, even though the percentages are are great. But, you know, if you can pick up a $90,000 duplex that grosses $1,400 a month, I mean, that's pretty decent anywhere in my book. So tell me how this relationship worked when you were remote. Michael, were you, you know, going to these properties and then sharing what you saw with Sid and Jessica, or how did it logistically play out? Yeah, yeah, exactly. I mean,

a lot of my clients are just like Sid and Jessica and are out of state. So I'm very much, go to the property, do a lot of video tours, even kind of walk around the block, take videos of the surrounding areas to make clients feel comfortable with the area they're buying in. And then beyond that, Sid and Jessica actually came to the market after that deal for their next deal. So I was able to show them around in person, obviously. But yeah, really, really using the good old video tour in Google Drive to make everybody feel like they're here as much as possible. Yeah. So one of the things that helped us a lot with Michael, too, is he actually no kidding brought up, you know, like a map of Dayton, kind of showed us to various neighborhoods,

you know, kind of these are areas you probably want to stay away from. These are the areas that, you know, here's where the hospital is, here's where the base is, just to kind of get us acquainted with the area and what real estate investors should be looking for. So it kind of made us feel a little bit more comfortable that we had someone that could kind of guide us through that. And he eventually also did the same thing to us for Columbus. Got it. Great. And so how is that deal performing now? So from the time we purchased the property to about maybe to two months ago, those tenants actually stayed in there the whole time. And so it was cash flowing.

One of the tenants did end up breaking their lease, or not breaking the lease. At the end of their lease, they ended up not extending it. We were going to fix it up. This was originally was going to be kind of a burr until the tenants were going to leave. We didn't realize they were going to stay for so long, which is good and bad. But now that we have kind of gone into more appreciating markets, we realize that we probably do want to sell this home now and kind of move it, you know, maybe into another deal in Columbus, maybe another deal out here in California. But yeah, no, it's done great for us.

It's, you know, we've been able to work with property managers and we've learned a lot from it. All right. Great. Well, I want to learn more about what you're thinking about doing. But tell me about your property manager, because that is a common area where people who are thinking about investing out of state get tripped up. How did you find your property manager, first and foremost? I mean, we did ask around a lot of Google research, and I did interview a few. And it was important for us to find a property manager that kind of did a little bit of everything, had a good enough portfolio with other investors. So they know exactly how to work with us, especially as out-of-state investors. We wanted to be sure we had someone with experience in that area, good reviews, sure we also clicked personally. So again, like with Michael, we were able to talk to them on the phone via Zoom. And, and yeah, we were just able to find someone that worked with us very well. I do want to add that the person you bought the property from, they had one of the bigger, globally

known property managers. So they were kind of all over the country. What we found was that sometimes they were neglecting what was going on with the actual tenants themselves. So the property manager, we were looking for, we wanted them to specifically be, you know, just for day. And we didn't want them to be all over the place so that they could provide a little bit more inputs. And we found out that as we're going through the process, our tenants really hated the last property managers to the point where we were having issues getting into the property because they weren't trusting people. And I know over time, our property manager was able to build better relationships with them and have them understand now we're here to help you and make sure you have what you need out of your property. That's great. I love hearing that story. We're able to make your investment go better. And at the same time, you're improving the quality of the experience for the tenants. Love that mutually beneficial situation. So, Jessica, tell us about your second deal. What came next? So when we closed on Dayton, we figured it would be a good idea for me to finally actually see Ohio. So we took a flight out there. Basically, as soon as we,

we landed in Columbus, we drove to Dayton. Since it was tenant occupied, we literally just drove by the property, drove around the neighborhood, met with our property manager, and then went back to Columbus, where we finally got to meet Michael in person. And being the hospitable local that he is, he showed us around Columbus, again, both as a local and from an investor standpoint. So we were able to see, like, where are the good pockets that would have good cash flow, good appreciation, at the same time knowing where all the good breweries are. He was able to show us several properties, one of which became our next investment. All right. And when you're doing a tour like this, Michael, what are the things you focus on showing out-of-state investors? Oh, man, that's a

good question. First and foremost, kind of try to cater it to at least what I know about what they're looking for. Columbus is pretty broad and sprawling so you can you could really spend all day driving around if you wanted to. So generally trying to just focus in it around the neighborhoods that might have properties of interest to them and kind of letting them get an idea of the dividing lines between those areas and how they relate to each other and the rest of the city. And then honestly, just try and give them a sense of a sense of the town. So I drive them by, you know, a lot of the new developments that are going up. Ohio State University is pretty cool to go see. So bring them by the big football stadium that fits like a hundred some odd thousand people there and,

um, you know, through like the nicer kind of swankier parts of town to give them the full, uh, you know, the full spectrum of everything we have to offer and, uh, try to give them a local's view mostly since they're going to be a, I don't know, I guess a remote local of, of sorts. And how do you compare and contrast Dayton and Columbus? You shared a little bit about that with us, but what type of investors tend to gravitate to Columbus over, Dayton? It's really anybody who's looking for some kind of an appreciation play. I mean, Dayton is, it's really made for people who are either very budget conscious, so they just don't have a lot of capital to outlay. If you're in that like all in 150 grand and underrange, Dayton is a great

city to consider because for that price point, you're generally going to be able to get a higher quality property in a slightly better area than that price property in Columbus. So just the cost to get in is less in Dayton. And the economic drivers, are less diverse. So I mentioned that Dayton is mostly medical, military, and education and some manufacturing. Columbus has everything. We have nationwide insurance is headquartered here. We have a huge fashion presence for whatever reason. Companies like Express and limited brands and Batham Body Works are all headquartered here. We, of course, have the huge new Intel expansion that people have been talking about online. We got everything from financial institutions to manufacturing and Honda around

town. So the diversity is there that provides, I mean, I wouldn't say anything is recession proof, but as far as a diversity of economies within Columbus, really, if anything goes down, there's another industry there to take up any kind of slack that would happen as far as I can see. Got it. Okay. And what kind of deals make sense in Columbus these days? If you're focused on cash flow or would like to have some cash flow when you're not dealing with a cash purchase, you're probably going to want to look at two units or more. Simply put the single-family rental market, the rent-to-price ratios just don't really support interest rates the way they are at this point. And because at least duplexes are not obviously twice as much as

a single-family for the same kind of comparable area in rents, you get a little bit of an economies of scale there where you get like double the rent without double the price, essentially. So really two units and up have been our bread and butter. Other than that, really just finding deals We've had some good luck with deals that have been sitting for a while. You know, they're overpriced. Maybe they're a little ugly. They need some work. So if we can come in and do that forced appreciation and make kind of a burrow play or something like that,

that's been successful also. But kind of the, you know, days of 1% single family rentals are at least turnkey if you're not going to put some work into them, are few and far between in Columbus as of, at least what I see. I mean, that's what's going on everywhere, right? any market that's growing that tends to be the case. So curious then, Sid, how did you find a deal that pencil? Tell us about it. Yeah, so when we closed in December of 2021, we ended up flying to Columbus, I think, January of 2022.

So it was winter, very cold. And so there were houses that were listed at that point that had been sitting on the market for a while. So those were kind of the ones we aimed for. We kind of kept the same buy box we had from Dayton, basically. basically looking again for small multifamily between two and four units. And the original plan was kind of to do the long-term rental strategy again. But we'll talk more about that maybe later. So we found one, the one we eventually ended up getting into,

had been sitting on the market for, oh, gosh, I can remember now. It was more than 100 days, definitely. And it was a flip. So it did have newer amenities in there. There were some issues with the property itself. But that's how we kind of started. And the fact that Michael was like, okay, yeah, this is the community it's in. This is what's nearby. This is, you know, these are the different strategies that you can do. He talked about kind of the concept of midterm rentals. He talked about how short term rentals are going on over there too. And then he also compared it to what long term would be. So we kind of got the whole gamut of what the potential options are. And so I ran numbers actually as short term, midterm and long term. And across the board, they all worked. And at that point, it was just kind of, okay, what do we actually want? to do now. Okay. So I'm curious because you're describing a property that has some updates or some

issues with it, but it's a solid property, been flipped. It's been, you know, it works numbers-wise. Why was it sitting on the market for 100 days? First and foremost, it was, it was a duplex. However, something interesting about this property was that they had split the parcel down the middle and they had tried to condo the building or they had they had condo the building. And so this has been a somewhat popular-ish thing to do for flippers in and around the downtowns in Columbus. We have quite a few, like 100-plus-year-old side-by-side townhouse-style duplexes, and it's quite common for them to do full-gut rehabs and end up with essentially two units, and then they split it down the middle and try and maximize their profit by selling them off as a condo.

The issue around the timing of this property was that they were trying to sell them off, around the 240 price point each where they had them listed. And for that price at this time, this was circa 22, early 2022, I think. You know, you could get into a decent single family home for that same price and not have a shared wall with somebody. So just the target market for who they were trying to sell this property to, I think was lower than or less than a standard property would have sold for

or would have been targeting. And then in addition to that, it was only a two-bed on each side. So then again, you're reducing kind of your buyer pool a little bit more because house hackers or people with a family or even just from a rental marketing standpoint, three bedrooms is generally a little bit more desirable than two bedrooms. So that's kind of why it was sitting for so long, in my opinion, as they were trying to really get top dollar. And they had somewhat made it a very specific property. It wasn't attractive to a lot of different people from that standpoint. So did you negotiate down the price then? Oh, yeah, totally.

Yeah, absolutely. Oh, of course, yeah. Yeah, absolutely, totally. If I remember correctly, we, because we were, they, Sid and Jessica, were offering to purchase it as a duplex instead of each unit, we were able to get a pretty good price reduction. I think it was about 40 grand total between the two units. We were able to negotiate.

And then got some additional credits and things during the transaction. So it was definitely done from a position of power for sure than negotiating. Yeah. Great. That's awesome. We have to take one more quick break, but stick around. We'll be right back after this. And while we're away, if you're curious to explore out-of-state investing and want to connect with an agent like Michael, head over to biggerpockets.com slash agent finder. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy. All the benefits of, owning real, tangible assets without the complexity and expense. That's the power of the Fundrise Flagship Fund. Now, you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10.10.

The portfolio features 4,700 single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought after industrial facilities, thanks to the e-commerce wave. The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes.

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Curious if you qualify, just head over to hostfinancial.com and find out. Stop letting outdated lending practices hold you back. That's hostfinancial.com, where your property's potential meets unlimited financing. Welcome back to the Bigger Pockets podcast. We're here with Cid, Jessica, and their agent Michael. Let's get back into it. So, Jessica, what happened from there? Eventually, we did, again, we were just like, well, what are we going to do now?

And we decided, like, okay, Michael had introduced the idea, the potential of short-term rentals and how that can work in Columbus. So we were like, okay, let's try the short-term strategy, but do it a little conservatively. So we decided to do one side of the duplex was going to be long term. The other side, we were going to set it up as short term in Airbnb. So in order not to lose any time between when we finally close and when we can go up live on Airbnb, we decided to, you know, try and get it ready and fixed during the closing process. So I was shopping for furniture. We were finding things that were wrong with the property, you know, based on the general inspection we've gotten, trying to get

credits for plumbing, brick. The gutters froze and fell off at one point. There was, the windows were new, but not working. So it was just a whole lot of things just started happening during the process. And Michael was there for all of it while we're in California. So again, we were trying to get this closed while I was sending furniture over there and our closing date kept getting pushed. And I think Sid can talk a little bit more about that. But yeah, so we were sending furniture to this house that we technically didn't own. So we were fancy squatters. Yeah, I just. Yeah, so just some of the other things that happened during all of this. So Michael talked about the kind of condo to duplex conversion. We had written the contract that we wanted to buy it as a duplex.

half, maybe like two weeks before we're supposed to close, the loan officer came back and said, hey, it looks like this is still a condo. We're not going to be able to close. We need to make sure that it is no kidding a duplex. And so, you know, Michael, again, had to kind of go through with the city and try to figure that out. We had to make amendments to the contract and just other things like that. Other things that were happening at the time is, so we decided to try and do a debt service coverage ratio loan on this just to kind of see how that worked out. One thing we found out about DSCR loans at that time was they did not lock rates until you actually completed the appraisal. And as we were going through that process is when Ukraine got invaded by Russia.

So like every day new more news came out, the interest rate kept climbing. There were points where we were going to pull out the deal because of just between all the stuff that was going on with the house, the interest rates, us getting just super nervous about all of this. I do remember calling Michael, I was on a work trip, I called him as all of this was happening and I asked him like Michael, is this still a good idea for us to do this? If like, not if we're your invest, not that we're, no, your client, but would you go through with this actual investment yourself? Right? Because at that point, I was ready to just pull the plug. Michael reminded us about, you know, kind of what was going on, what the future play is, reminding that if we are kind of doing this as a buy and hold, as our original

plan that, you know, seeing everything that's being done in Columbus, eventually, you know, this will work out and it's still a good idea. When we reran the numbers, it wasn't that bad. Like, I think originally it was going to be like a 15 or 20% cash on cash, and it brought down to like 8% after we kind of did the math with the new interest rates that were coming in. So still not bad. Just wasn't as good as we had originally hoped. But yeah, it all ended up working out. We did end up buying the property. And today, now it's, it's, it's kind of. going okay. It's still running.

Awesome. Well, I mean, an 8% cash on cash return is still awesome. So congratulations. It's still a great return on your investment. Now, it sounds like, though, you kind of wanted to switch from Dayton to Columbus to get appreciation, not cash flow. Was that sort of your goal for this second property? Yeah.

I mean, after we did do the tour with Michael, seeing what Dayton looked like in comparison of what was going on in Columbus, He did show us kind of the path of progress that was going on in and around Ohio. At that point, you know, we did hear about all the new things that were happening with like the Intel plant. I mean, we saw all the construction that was going on and the revival that they were trying to do, you know, in and around the downtown areas as well. So it just gave us a really good feel. Like, as we were going through there, me and Jessica actually, you know, going to the breweries and going to like the restaurants, we actually felt like we were back in Los Angeles, which was weird. We always thought of Ohio as kind of being, you know, not cornfields, but just, you know,

A little more, not so much of the life like that. So it was very interesting to us. So we could see ourselves living there. I'm like, wow, if this is like this and it's going to continue to grow, I could see why people would want to continue investing and living here. Awesome. And so tell us, you said the deal is performing well. What does that look like?

It's currently now a midterm rental and a long-term rental in the last year, depending on seasonality, because in the wintertime, we do bring our prices. down lower for the midterm side. It ranges anywhere between like $800 to like $2,000 a month in cash flow. The summertime being when it kind of goes up to that higher end just because of, you know, what's going on in the area and kind of what the standard market price range is. All right. Great. So tell me, are you going to buy in Columbus again? What's the plan next? Yeah, so we actually did purchase another property in Columbus after that one. as we said, we're in the process of right now selling the duplex in Dayton, which, again,

Michael is actually the one representing us on that one. After we pull out from the property in Dayton, we may or may not do Columbus again right away. We're trying to figure out right now what's the best thing. We are currently house hacking here in California as well. So it's kind of a play between, you know, what might end up working. But we're kind of asking Michael to kind keep the pulse on there for us. Once we finally do close on day in, we'll probably have another conversation with Michael of what currently is available.

But we're more than happy to do more in Columbus because we do still believe in that market. But with interest rates and everything else is kind of going on, we're kind of having to make sure everything makes sense. For sure, yeah, that does make sense. So Michael, what deals are going on in Columbus these days?

A lot of it is distress. A lot of the investors are still getting deals done for people who have to sell. There's plenty of burrs and flips and things still happening. Those markets are still pretty strong. Like I said, the single family rentals are hard to make work unless you're going to do some significant rehabbing and everything to them. But other than that, I mean, the rental markets are strong. Anything from two units and up has some decent underlying numbers. Getting to the 1% rule, even in a triplex or a quad is, I wouldn't say a given. It probably depends on the part of town you're in.

But it's certainly attainable to get to the 0.7 or kind of 0.8 range. And usually at that, you're starting to at least break even or make a little bit of money per unit after you pay all your expenses. So we have a good amount of building happening on the multifamily side of apartments and everything like that. So those are going on in town. And we just, I just looked it up, just had the, I think it was the fourth or the fifth strongest rent growth in the country, month over month last month at 17%. So, you know, rental market's still going strong and everything like that. Awesome.

Great. Well, thank you for sharing that knowledge about Columbus. It's definitely a popular, very exciting market. Lots of great stuff going on there. Sit and Jessica, before we get out of here, do you have any last advice to investors who are thinking about investing out of state? You both were able to pull the trigger. How would you advise other investors to do the same?

same? I mean, I think the biggest thing is not to get stuck in analysis paralysis. I mean, obviously for Sid, he read half a book and, you know, he had a plan. But even then being as data driven as he is, you know, we know we could have gotten stuck on, you know, the numbers and making sure everything was perfect. But Dayton worked, as Michael said, it was a lower barrier to entry. And, you know, we just wanted to see that it worked. We pulled the trigger on what we saw after running our numbers and, you know, everything just took off from there. So it's just being brave to actually take action is, I think, one of the bigger things. Yeah, and I think for me, we, after we started going through this, you know, I kind of felt like we're on this island by ourselves investing. And so after we kind of got into the first deal, we started attending meetups. We joined Facebook groups. Columbus has a great one. one or a lot of investors in the area. And it just kind of, you know, gave us that sense of community and knowing that these are things that we can do as we're coming across problems with the property, with property

managers, with managing out of state. You know, we were able to commensurate with a lot of other people here in California and even out in Columbus. We've made so many friends that we can just reach out to now. You know, we really don't feel like we're in this alone. That's great. And do want to help people understand that one of the main things and remind them that, One of the main things that Sid and Jessica mentioned in terms of how they got over analysis paralysis was picking a market and speaking to a lot of agents, just like Michael.

And if you do want to connect with an agent who can help you navigate some of your markets, you can do that on BiggerPockets.com slash agents. Michael, Sid, Jessica, congratulations on these very exciting deals and on finding one another and helping each other get these cool deals. For anyone who wants to connect with Michael, Sid, or Jessica, we will put their contact information in the show notes below. Thanks again for joining us, everyone. Thank you. Thank you so much. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform.

Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.w.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own.

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