Hi, my name is Chris and I will be buying my first investment property this year. I’m doing a ton of research (while trying to avoid paralysis by analysis) to help insure my first investment goes well. I live in a very expensive market and although I have my primary home here, it is not an affordable market to purchase multiple investment properties quickly. I am looking for a market that is affordable but has high rent costs and high rental needs so I can maximize cash flow to allow for more rentals down the road. I’m curious if anyone has any advice what markets to look at where they have had success in that are also good for a newbie that is looking for cash flow over equity.
@Chris Criss I'll second some of the comments made by @Cameron Braig. The largest population growth over the next 30 years according to the US Census Bureau will be in the Sunbelt areas. Good weather, lower taxes, business-friendly, and landlord-friendly. It's also where a lot of the institutional money is going in either apartment value-add or build to rent strategies. Some markets like Raleigh, Tampa, Atlanta, Charlotte, etc. have already appreciated a bit too much in my opinion for much of a cash flow play. However, there are many secondary markets to consider. The Triad area (Greensboro, Winston Salem, High Point) would be one to consider. I'm from Raleigh, but personally investing in Huntsville, AL and Cape Coral FL with new construction to rent.
If you're new or just don't have time any longer like me, you may want to consider turnkey. I've personally had great success with Rent to Retirement. They are in a lot of the markets in the Sunbelt and may be worth looking into their market research. Good luck!
@Chris Criss Pittsburgh is still pretty solid cash flow wise and decently low buy in compared to a lot of other cities in the country. You can get 2-4 units in decent areas anywhere from 50-100k/unit that'll hit the 1% rule on a mostly turnkey property. That's usually what I recommend as a nice starter investment to get your feet wet and have good cash flow on a long term buy and hold.
@Chris Criss Congrats on taking the first step in making a goal to invest. I am in Texas and although people around here are freaking out about the rise in prices, we are still way below most of the nation. I am still able to find 1% deals. Yes prices are rising but so are rents. We just purchased a property where they were paying $650 - $800 a month and I gave them an option to move out or pay $1200 and they all stayed! So I can't speak for other markets but ours is still going strong. If I can help you in any way please reach out. Happy Investing!
@Jeremy Taggart Pittsburgh is a city that I know very little about and hadn't considered but Key turn or Mostly key turn is exactly what I am looking for. I'll definitely add Pittsburgh to the list of cities to consider, Thank you for the advice!
@Sherry Patterson Thanks for the insight. I have wondered about Texas as well. I live in Southern California so I am unafraid of rising markets as I purchased my primary residence in our crazy market. What cities in TX in particular do you find are best for new investors looking for turn key and monthly cash flow?
@Chris Criss I am in Fort Worth which is a great market. I tend to stay away from Dallas because it does not seem to have as good of returns. But at least in this area I recommend Tarrant, Denton, Wise, Parker & Hood counties. Houston and San Antonio are also good markets. Stay away from Austin.
@Cade Edwards I was just listening to a podcast that was talking about the TN market and the cash flow. I lived in TN for a few years so I was also thinking about Knoxville as well. I worry about the crime in Memphis however. Have you heard of any issues with that?
Everyone here has given some great suggestions. If I were you, I'd make a list of these markets...and then start trying to network in those areas. Different markets may yield similar profits...where you yourself will be most successful is one in which you have developed a strong "boots on the ground" presence to help you succeed. (Realtor, property manager, contractors, etc.)
@Chris Criss hi Chris! Like you, I also live in an expensive market. I don’t think this is a detriment though. You just have to get creative. I’ve started investing out of market. Mainly in Cape Coral and Ocala FL. Right now I am building a new build construction through a turnkey company for $265k all in with only 10% down. Post construction appraisals are averaging $377k for this model and rents are around $2300/mo. The deals are out there! Good luck!
@Chris Criss I think it really depends on the exact location of the neighborhood. Generally speaking your lower priced homes will likely have a higher crime rate and higher priced homes will have a lesser crime rate.
@Patrick Bavaro WOW I haven't even considered new construction. What I'm learning quickly is the options and solutions are out there. I just need to figure out the path and math that will bring me the success that I am looking for.
Market evaluation can vary depending on business plans and investment strategies. Some good metrics that help narrow down potential markets are; income growth, population growth, rent growth, job growth and job diversification. The sunbelt markets have been experiencing these trends pre-pandemic and the pandemic accelerated that. With company relocation to Dallas it continues to grow. Similar growth areas have been in Tampa, Atlanta, Charlotte, Raleigh and Jacksonville. Growth in these markets have also spurred activity in secondary markets like Greensboro, Chattanooga, Winston Salem. Best of luck in your hunt.
Hello Chris, I hope you are doing well. If you ever have any questions about the North Carolina market let me know! I am always happy to help in any way I can.
@Chris Criss I'll second some of the comments made by @Cameron Braig. The largest population growth over the next 30 years according to the US Census Bureau will be in the Sunbelt areas. Good weather, lower taxes, business-friendly, and landlord-friendly. It's also where a lot of the institutional money is going in either apartment value-add or build to rent strategies. Some markets like Raleigh, Tampa, Atlanta, Charlotte, etc. have already appreciated a bit too much in my opinion for much of a cash flow play. However, there are many secondary markets to consider. The Triad area (Greensboro, Winston Salem, High Point) would be one to consider. I'm from Raleigh, but personally investing in Huntsville, AL and Cape Coral FL with new construction to rent.
If you're new or just don't have time any longer like me, you may want to consider turnkey. I've personally had great success with Rent to Retirement. They are in a lot of the markets in the Sunbelt and may be worth looking into their market research. Good luck!
Thanks @Cameron Braig and @Trevor Fleck for the information! I’ve been considering the sunbelt as well. I think turn key or close to turn key are the best bet for my first property.