New investor looking for market suggestions

New investor looking for market suggestions

Member since 2022 · 11 posts · 16 votes

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. 

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Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes
4y

@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!

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  • Jeremy TaggartBusiness Member
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
    4y

    @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. 

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  • Real Estate Broker · Fort Worth, TX · Member since 2015 · 221 posts · 125 votes
    4y

    @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!

  • Member since 2022 · 11 posts · 16 votes
    4y

    @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! 

  • Member since 2022 · 11 posts · 16 votes
    4y

    @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? 

  • Real Estate Broker · Fort Worth, TX · Member since 2015 · 221 posts · 125 votes
    4y

    @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. 

  • Memphis, TN · Member since 2021 · 82 posts · 37 votes
    4y

    @Chris Criss The Memphis, TN market typically has a great monthly cash flow. Especially with the rising rent prices that are steadily increasing. 

  • Member since 2022 · 11 posts · 16 votes
    4y

    @Sherry Patterson Great advice thank you! I will keep that in mind as I narrow down my search. 

  • Member since 2022 · 11 posts · 16 votes
    4y

    @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? 

  • Investor · Bucks County, PA · Member since 2020 · 41 posts · 52 votes
    4y

    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.)

  • Member since 2022 · 1 post · 0 votes
    4y

    Hey Chris south central Pennsylvania is a hot spot with many great cash flowing properties. I have many in my inventory right now.

  • Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @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!

  • Memphis, TN · Member since 2021 · 82 posts · 37 votes
    4y

    @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.

  • Specialist · Southlake, TX · Member since 2021 · 213 posts · 157 votes
    4y

    What kind of price points are you looking for Chris? 

  • Member since 2022 · 11 posts · 16 votes
    4y

    @Sunil Kurian Thank you for that great advice. I am looking to create that strong team once I can figure out the area I want to invest in. 

  • Member since 2022 · 11 posts · 16 votes
    4y

    @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. 

  • Austin McClainBusiness Member
    Real Estate Agent · OH · Member since 2021 · 348 posts · 602 votes
    4y

    I've seen investors and friends have a lot of success in Columbus, Ohio. The city is growing quickly with a need for more housing. 

  • Atlanta, GA · Member since 2021 · 493 posts · 162 votes
    4y

    Hi Chris, 

    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. 

  • Real Estate Broker · Raleigh, NC · Member since 2018 · 19 posts · 9 votes
    4y

    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. 

  • Real Estate Agent · Atlanta, GA · Member since 2014 · 683 posts · 317 votes
    4y

    Just gonna throw Atlanta in the mix. Feel free to reach out if you have any questions! 

  • Investor · Fort Collins, CO · Member since 2014 · 123 posts · 329 votes
    4y

    @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!

  • Member since 2022 · 1 post · 0 votes
    4y

    Check out Cincinnati too! Plenty of 1% deals. 

  • Member since 2021 · 12 posts · 2 votes
    4y

    @Patrick Bavaro, any chance to get the details of the new construction option?

  • Fort Lauderdale, FL · Member since 2018 · 289 posts · 342 votes
    4y

    @Azizbek Rasulov sure, sending you a PM with It

  • Member since 2022 · 11 posts · 16 votes
    4y

    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. 

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

    Texas is a good market; I can find/analyze one property every day for great cash flow in Houston, Tx. It is all about knowing where to look.

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