Newbie here-please recommend market to start with

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Newbie here-please recommend market to start with

Tracy Wang
Member since 2021 · 7 posts · 7 votes

Hi all
I am totally new to the rental investment. I am in California and looking into purchase out-of-date SFR as rental property. Given so many markets, which markets should I focus on my research? I would appreciate to start with a short list of markets you can recommend? For start, I will mostly likely go with a turnkey provider, if you can share the ones that you have good experience with, that'd be great!

thanks a lot, I am learning each day from this forum.


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Account Closed
Rental Property Investor · Austin, TX · Member since 2019 · 22 posts · 65 votes
4y
Originally posted by @AJ Singh:

Please remember that OOS prices are triple of what it was 5 years ago and most of the cheap housing available to OOS investing / turnkey is what a local investor of that city is not buying..

AJ, I'm not certain what you mean by OOS prices are triple. Sure markets have seen appreciation, some of them significant. But a 100k home in Memphis from 5 years ago, for example, can be had now for 120-140k. Rents in the area have skyrocketed as well, keeping your return very good. And housing for investing/turnkey isn't what local investors aren't buying. The inventory is being bought by local people, flipped, then sold. 

To the OP, Memphis, Kansas City, Indianapolis, Little Rock and some parts of Florida are great spots to start looking. 

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

    https://www.biggerpockets.com/...

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    @Auryana Faramarzi

    Not understanding what tax breaks you would get on an in-state rental property over an OOS one?

    You stated, "as I would be obtaining a primary residence loan", but isn't it a federal crime to commit fraud on a mortgage application by claiming a rental will be a primary residence?

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  • AJ Singh
    Rental Property Investor · Orange County, CA · Member since 2016 · 513 posts · 374 votes
    4y

    @Tony Kim

    I agree with San bernadino being further away but Inland Empire is booming with their own job creation and rental yields. The renters are not commuting to LA but are in local jobs paying them well. The appreciation of real estate is on par with the LA and OC without the landlord unfriendliness policies..

    1Reply
  • Catherine Coy
    Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
    4y

    << isn't it a federal crime to commit fraud on a mortgage application by claiming a rental will be a primary residence? >>

    Yes, it is.  Occupancy checks are on the rise.

    https://singlefamily.fanniemae...

    0Reply
  • Kevin Uzelac
    Investor · Philadelphia, PA · Member since 2018 · 61 posts · 62 votes
    4y

    Hey @Tracy Wang Philadelphia is a great location for cheap single family rentals. This market has also seen a lot of appreciation in the last year just like every other market has, making it even better for buy and holds. Taxes are low and there's a low barrier to entry. 

    0Reply
  • Chris K.
    Investor · FL · Member since 2020 · 179 posts · 55 votes
    4y

    @Tracy Wang honestly, do your due diligence and find your first market through research. Don’t ask others for market otherwise they would be buying there ;-)

    0Reply
  • Auryana Faramarzi
    Member since 2021 · 29 posts · 34 votes
    4y

    @Drew Sygit yes that would mortgage fraud and that is not what I would be doing. I have sent you a private message for clarification. 

    0Reply
  • Aidan Driggers
    New to Real Estate · Member since 2021 · 6 posts · 6 votes
    4y

    @Kristen L Garner what areas specifically do you recommend? I know that there are some areas with higher poverty rates and some nicer areas. What do you recommend. Thanks :)

    0Reply
  • Catherine Coy
    Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
    4y

    You can do a bunch of keywords like "safest cities in California," or "Texas cities with the highest poverty rates," or "cheapest cities in Illinois."

    0Reply
  • Kristen L GarnerBusiness Member
    Lender · Phoenix, AZ · Member since 2021 · 451 posts · 287 votes
    4y

    @Aidan Driggers I like Marion County but knowing the areas really helps.  North of Indianapolis is "nicer", East is up and coming but more "street to street", South of Indianapolis is great but harder to find good deals, West is solid.  Lots of distribution centers and jobs coming into Indianapolis and the surrounding areas. Feel free to hit me up with specific area-related questions. (or finance questions - I'm a lender that specialized in Indy)  I also know great agents who are rockstars!

    [email protected]213-880-0434
    0Reply
  • Jake Drappi
    New to Real Estate · Brick, NJ · Member since 2020 · 115 posts · 39 votes
    4y

    @Adam Schroeder hi Adam - I wanted to see if you could share what parts of Florida are you referring too? I was looking at that market and would appreciate the insight. Thanks

    0Reply
  • Account Closed
    Rental Property Investor · Austin, TX · Member since 2019 · 22 posts · 65 votes
    4y
    Originally posted by @Jake Drappi:

    @Adam Schroeder hi Adam - I wanted to see if you could share what parts of Florida are you referring too? I was looking at that market and would appreciate the insight. Thanks

    I work at Rent to Retirement and we are loving the southwest Florida area in and around Cape Coral. The population is booming and we're able to buy and finance new construction for ~275k that is currently appraising at 360-380k

    10Reply
  • Catherine Coy
    Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
    4y

    Bill Gatten wrote:

    << Next, instead of your taking the property's title (deed), 'you are assigned a beneficiary interest in the trust ('which affords you full (100%) fee-simple ownership benefits...and control of the property--without the need for a down payment or bank credit qualifying. >>

    Where's the seller in all this?  Does the seller just give the property to you?

    0Reply
  • Joseph Cornwell
    Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    4y

    @Tracy Wang I love Cincinnati, Ohio. Of course I am biased :) There are many great cities in the Midwest and South that have strong cash flow potential. If you have any questions for my market feel free to reach out, good luck on your research! 

    1Reply
  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    4y

    @Tracy Wang I would say check the areas @AJ Singh mentioned due to the job growth there and the ability to still cashflow or value add in certain locations of the Inland Empire it is a good idea to look there then if you want go to OOS Investing. The appreciation is something here not to bet on; however, gives a lot of upside when looking at rentals in CA verse out of CA.  

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  • Nick GiulioniPro Member
    Rental Property Investor · Carmel, IN · Member since 2016 · 1k+ posts · 615 votes
    4y

    Hi Tracy, I'm from California but started my real estate journey here in Indianapolis. Now, I have almost a hundred doors. I would love to share my experiences and chat you more if you're intersted.

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    Most of my out-of-state clients are investing in Texas. Here's an article of places to invest and why. Always practice due diligence on any market and talk to an expert. Good Luck!

    https://www.noradarealestate.c...

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  • Clay Boykin
    Real Estate Agent · Columbus, OH · Member since 2021 · 98 posts · 101 votes
    4y

    @Tracy Wang Columbus, OH is first time and experienced investor friendly. Most deals are as old as 1890 but their are some around 1940-70. Indianapolis is similar to Columbus as well. Those are my two favorites personally. Finding a turnkey can be challenging in this market as well. I usually target mid-high rehabs. 

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    @Auryana Faramarzi glad to hear:)

    We can't access your DM as BP blocked that.

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  • Rick Albert
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    4y

    I would consider investing in your own backyard as a house hack.  Assuming you are paying rent, the cash flow you would be getting from the other rentals would just go towards paying your own landlord.  Through house hacking, you are getting paid towards your own investment.

    1Reply
  • Paul Gimmarro
    Real Estate Agent · Kansas City, MO · Member since 2021 · 32 posts · 28 votes
    4y

    Hi Tracy!

    Take a look at KC. Kansas City is landlord friendly and matches some of the things you are looking for based on your other comments on this post. WBest of luck to you in your journey!

    1Reply
  • Cameron Braig
    Atlanta, GA · Member since 2021 · 493 posts · 162 votes
    4y

    The sunbelt continues to provide great opportunities. Cities like Atlanta, Charlotte, Jacksonville, Tampa, Orlando, Dallas and Phoenix have grown in areas like income, population, jobs and rent. The growth in these major metros has also brought growth to tertiary markets like Chattanooga, Winston Salem, Huntsville and Birmingham, Best of luck. 

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