Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
There are a lot of posts on here about what area to buy in. Many know that my faves are TX and certain parts of FL. I see lots of chatter on the same 2 states from investors that aren't area bound.
So,,, Lets' hear it. Both from actual investors, and prospective investors.
Texas? Why?
Florida? Why?
If you have a different location you feel REALLY good about, tell us about it and WHY you feel good. I think this would be a single thread where all the input could be batched together for consideration. One stop shopping for where to invest and why. OK, state your case for your faves. Rich
Real Estate Consultant · yucaipa, CA · Member since 2008 · 233 posts · 109 votes
17y
SoCal, specifically the Inland Empire is a gold mine for Seller Financing & L/O deals. Why? My own back yard for example; Yucaipa, Redlands area.. is comprised mostly of Pre-Post Retirees with little to no mortgages. Older seniors also have numerous properties and land that they own. They of course want to sell but with the economy and market the way it is: Their stuck!! Not to mention, they lost money in the market and those big dividend checks have virtually stopped coming in. To add insult to injury, SS checks will not be going up for at least two years. Combine that with ultra low CD interest rate and you have a perfect win-win opportunity for seller financing and/or a Lease Option. 3-5yr Option isn't hard to pitch. So, if your feed up with Short Sales and REO's-Give me a call!!
Houston, TX · Member since 2009 · 48 posts · 11 votes
17y
Great question Rich. In Houston, you can buy, on average, Class B-/C+ apartments for $20k/door with $600-$700 rents. The math works.
PLUS, apartment renters in this strata in Houston, (can't speak for other TX cities) IN GENERAL would rather spend their money NOT on a SFR, but on a NEW CAR, CLOTHES, etc. to keep up with Jones', when in fact they are entrenching themselves to become perpetual renters. Great for the owners, sad for the renters frankly.
Said plainly, you'll always have a viable tenant pool because of this level of conspicous consumption.
Residential Real Estate Agent · Orange County, CA · Member since 2009 · 289 posts · 95 votes
17y
Originally posted by R Sean:
PLUS, apartment renters in this strata in Houston, (can't speak for other TX cities) IN GENERAL would rather spend their money NOT on a SFR, but on a NEW CAR, CLOTHES, etc. to keep up with Jones', when in fact they are entrenching themselves to become perpetual renters. Great for the owners, sad for the renters frankly.
Said plainly, you'll always have a viable tenant pool because of this level of conspicous consumption.
R Sean
You know, if I didn't know you were talking about Texas, I would have thought you were talking about Southern California. Image is everything!
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
Originally posted by Mike M:
Is that a $30K purchase price or a $30K Down Payment?
I'm sure Jon will speak up, but I think he means $30K purchase price. Tough to buy $800 in rent for under $70K here in CO. Even that's really hard. That's a big advantage I see to TX.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
I've met with Jon K- He has a great niche. He is buying cash flow with a kicker. His properties he buys are mobile homes on acreage. The rent is high, and I suggested that he try and split the property into 2 or more parcels and he'd still get the same rent.
RSEAN- if you think a post or title is good vote for it and keep it in peoples' minds. Thanks. Rich heading to Spain
This thread has gooten too much to one area. Doesn't ANYONE like a different spot than Texas? Come on. Rich
Real Estate Consultant · yucaipa, CA · Member since 2008 · 233 posts · 109 votes
17y
SoCal, specifically the Inland Empire is a gold mine for Seller Financing & L/O deals. Why? My own back yard for example; Yucaipa, Redlands area.. is comprised mostly of Pre-Post Retirees with little to no mortgages. Older seniors also have numerous properties and land that they own. They of course want to sell but with the economy and market the way it is: Their stuck!! Not to mention, they lost money in the market and those big dividend checks have virtually stopped coming in. To add insult to injury, SS checks will not be going up for at least two years. Combine that with ultra low CD interest rate and you have a perfect win-win opportunity for seller financing and/or a Lease Option. 3-5yr Option isn't hard to pitch. So, if your feed up with Short Sales and REO's-Give me a call!!
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
Matt- I voted for your post. I know that area and you have a great argument with retirees that want the sun and need the replacement market for lost money in the market.Another nice niche and proves you can still make $$ in Ca.
Jon- you may have to buy and flip a couple of those to generate more purchase funds. Find a good one, sell on here, borow from me and we all win!! Rich
Real Estate Investor · Phoenix, AZ · Member since 2009 · 1k+ posts · 1k+ votes
17y
Rich, if you had asked this question a month ago, I would have recommended Elk Grove, near Sacramento. I spent countless hours analyzing economic data, home prices relative to average household incomes, crime stats from the FBI, school quality, etc. for the entire northern California region before identifyinf Elk Grove as underpriced.
And then I saw BP and you guys posting about values in TX. I will go into serious depression if I buy in northern California after hearing what Jon K had to say about his D/FW investments. Vikram
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
Vikram- I have quite a few homes in TX also. Very nice returns. I have built 4BR-2BA-2car garage homes there. Fully fenced and landscaped with 1600+ sq. ft.
WITH my lot, I can have finished , new home for a cost of 91K. They rent for $1000+ and newest one a month ago appraised at 140K. Try and do that in CA. I've also bought quite a few homes there.
Real Estate Investor · Phoenix, AZ · Member since 2009 · 1k+ posts · 1k+ votes
17y
Rich, can you walk me through the numbers on the home you are referring to? If I understood you correctly, the home costs $91K and the rent is about $1,000 per month. So, applying the 50% rule, it works out to $6,000 per year in NOI and if I were to use a 8% cap rate, the value works out to around $75,000.
So, in order for this to work, we will need to expect significant property appreciation over the next few years, right? Are these homes in a nice area with good schools, low crime, and reasonably affluent people? I would guess that the median household income in the neighborhood should be at least $70,000 for me to expect significant price appreciation there.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
Vikram- I am one that doesn't subscribe to the 50% idea. There are tremendous benefits to this type deal,imo. They're brand new, top rated area in the country, and in a gated community, which I own.
I'm very comfortable with these homes. No deferred maint, great depreciation and appreciation . Rich
p.s. I'm leaving for airport for flight to Europe so no more time to reply.
Property Manager · Dublin, OH · Member since 2009 · 1k+ posts · 291 votes
17y
Rich,
While you´re asking for, OHIO (Akron, Cincinnati, Cleveland, Columbus, Dayton, Mansfield, Toledo, Sandusky, Youngstown and so on)!!
Why? - Amazing deals with crazy houses for cheapest money.
Example: The 60 unit complex in N Ohio and in Cincinnati a 12 unit house with 5x 1bed, 4x 2 bed and 3x 3 bed for only $85k ask, needs rehab about $100k (says the broker) and has an ARV of nearly $400k. There are many more houses with potential and there are many people they will leave the slumlord houses and go to better units for reasonable terms. Steve Sparks can tell you a thing or two about it.
Flipper · Phoenix, AZ · Member since 2009 · 973 posts · 679 votes
17y
I didn't see anyone mention Indiana. Or I'm blind.
Either way, I see several areas that are great for buy-and-hold investors.
Muncie - Ball state students typically pay per-bedroom 2-$300. A 4 bedroom house within 5 blocks of campus would rent for around 1200 a month, and run you between $60-$80k.
Vincennes - Same deal. College town. Housing generally runs $200 a bedroom. Duplexes are plentiful between $20,000 and $60,000 with 2-3 bedrooms per side. (I have some duplexes here if anyone is interested) The downside to this area is there is no property management in town.
Indianapolis - Be careful here, there are a lot of bad neighborhoods, and out-of-state investors are paying way too much for property. I've seen people pay $30,000 for a house that needs $40,000. The wholesaler paid $7,000 and the new owners are in way over their head. You can get duplexes aplenty for under $60k in bad neighborhoods that run for 800-1000 a month. Just be sure you know what you're paying for, and what you'll be able to sell it for.