How Do We Find Which City To Invest In

Member since 2019 · 144 posts · 46 votes

I have decided I want to invest in a multi-family triplex or duplex. I live in So Cal so I prefer to invest out of state, but what resources are there to help you pick from one of the thousands of cities in the U.S. Any advice, tips, or resources for me to dive in there and pick the area I want to invest in? I feel like I am looking for a needle in a haystack!

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Stephanie Trevizo

Rental Property Investor · Los Angeles, CA · Member since 2018 · 49 posts · 46 votes

Hi Michele, I'm also in SoCal and looking out of state. If you haven't already read it, David Greene's book Long Distance Real Estate Investing is a good place to start. I'm looking for city's with major employers such as major hospitals, universities, large factories, etc. I also want to see average median incomes that are at least 3X the local rent. When I find a city I'm interested in, I look for PB posts from investors in these areas to connect and see what they are up to.

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Scott AllenBusiness Member
Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
4y
Columbus, OH is a great market to find multi-family properties with good cash flow and steady appreciation. First identify your market and then build your core four. Feel free to reach out if you want to learn more!
[email protected]614-698-1227
Reafco - Columbus, OH
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Pierre E.Pro Member
Washington, DC · Member since 2016 · 129 posts · 42 votes
4y
Quote from @Scott Allen:

Columbus, OH is a great market to find multi-family properties with good cash flow and steady appreciation. First identify your market and then build your core four. Feel free to reach out if you want to learn more!

Hey scott! Thanks for sharing those thoughts! Can you say more about what makes it a great place for multi family? what size multifamily is it best for?

0 Reply
Stephanie Trevizo
Rental Property Investor · Los Angeles, CA · Member since 2018 · 49 posts · 46 votes
4y
Hi Michele, I'm also in SoCal and looking out of state. If you haven't already read it, David Greene's book Long Distance Real Estate Investing is a good place to start. I'm looking for city's with major employers such as major hospitals, universities, large factories, etc. I also want to see average median incomes that are at least 3X the local rent. When I find a city I'm interested in, I look for PB posts from investors in these areas to connect and see what they are up to.
4 Reply
Pierre E.Pro Member
Washington, DC · Member since 2016 · 129 posts · 42 votes
4y
Quote from @Michele Velazquez:

I have decided I want to invest in a multi-family triplex or duplex. I live in So Cal so I prefer to invest out of state, but what resources are there to help you pick from one of the thousands of cities in the U.S. Any advice, tips, or resources for me to dive in there and pick the area I want to invest in? I feel like I am looking for a needle in a haystack!

David Greene has a book on Long Distance Investing I highly suggest that you listen or read to that book!
Then I suggest looking for Long Distance Investing posts here on the forum and long distance investing on youtube. Market choice will definitely be a covered topic in some of those areas.

On Identifying your market data is king. City Data is a useful site, and combining it with tools like Zillow Rentometer and Redfin will help. Propstream and Property Shark might not help so much with market choice as opposed to property choice but are paid services I have not used yet.
I have noticed some choose because of where they live, some because of where they have been the most besides where they live, or because they have a strong family or friend presence there and have an "in".... some people choose based on straight analysis alone... You will need to know factors such as economic trends, population shifts in or out, state laws and local laws (landlord friendly vs tenant friendly etc)... physical property hazards by season (flooding, rain, hail, fire) or in general (ie I personally can't fathom investing in New Orleans unless it was to AirBNB for the short term and then sell the property) - If you can narrow down to one or two states, then I would look for "where are the tenants I want to deal with located" theres so many ways to answer that question but you may want to start looking in a major metro area... most states have less than 10 major cities or areas of decent population density. So if you narrowed to two states and 20 "areas" you at least cut that haystack in half while searching for that needle. Some people then also include price rent metrics to help. Also decide if you want to maximize cashflow no matter way, or you want a blend of cashflow and appreciation/equity build up. Different places offer different things.

I hope some of that has helped!
2 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
4y
Quote from @Michele Velazquez:

I have decided I want to invest in a multi-family triplex or duplex. I live in So Cal so I prefer to invest out of state, but what resources are there to help you pick from one of the thousands of cities in the U.S. Any advice, tips, or resources for me to dive in there and pick the area I want to invest in? I feel like I am looking for a needle in a haystack!

It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s long-distance investing strategy and consists of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to invest in any market confidently.

As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio. I am also looking to invest in Cincinnati and Cleveland.
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Andrew Garcia
Lender · Charlotte, NC · Member since 2022 · 739 posts · 410 votes
4y
Hi @Michele Velazquez, first you have to determine your non-negotiables.
Is cashflow on day one a priority?
Is a market with strong population growth important to you?
The first step is determining which your non-negotiables are and then once you have those, you can narrow down the list.
Hope this helps! Let me know if I can be of any assistance.
0 Reply
Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
4y
You might try the BiggerPockets guide to market analysis here!
Podcast Guest on Show #223
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Ronald RohdePro Member
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
4y
You need to identify your other goals as an investor. Do you need appreciation, stability, cash flow?
Population growth is a key driver to lift all boats. I like the sun belt states, Texas and DFW is plenty big for me and my money.
1 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Scott Allen:

Columbus, OH is a great market to find multi-family properties with good cash flow and steady appreciation. First identify your market and then build your core four. Feel free to reach out if you want to learn more!

Thank you. I will check out this market. I do know about the core 4!
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Stephanie Trevizo:

Hi Michele, I'm also in SoCal and looking out of state. If you haven't already read it, David Greene's book Long Distance Real Estate Investing is a good place to start. I'm looking for city's with major employers such as major hospitals, universities, large factories, etc. I also want to see average median incomes that are at least 3X the local rent. When I find a city I'm interested in, I look for PB posts from investors in these areas to connect and see what they are up to.

Ok cool, just bought that book. It is way too expensive here huh? All good tips as well, thank you!
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Pierre E.:

Quote from @Michele Velazquez:

I have decided I want to invest in a multi-family triplex or duplex. I live in So Cal so I prefer to invest out of state, but what resources are there to help you pick from one of the thousands of cities in the U.S.  Any advice, tips, or resources for me to dive in there and pick the area I want to invest in? I feel like I am looking for a needle in a haystack!

David Greene has a book on Long Distance Investing I highly suggest that you listen or read to that book!
Then I suggest looking for Long Distance Investing posts here on the forum and long distance investing on youtube. Market choice will definitely be a covered topic in some of those areas.

On Identifying your market data is king. City Data is a useful site, and combining it with tools like Zillow Rentometer and Redfin will help. Propstream and Property Shark might not help so much with market choice as opposed to property choice but are paid services I have not used yet.
I have noticed some choose because of where they live, some because of where they have been the most besides where they live, or because they have a strong family or friend presence there and have an "in".... some people choose based on straight analysis alone... You will need to know factors such as economic trends, population shifts in or out, state laws and local laws (landlord friendly vs tenant friendly etc)... physical property hazards by season (flooding, rain, hail, fire) or in general (ie I personally can't fathom investing in New Orleans unless it was to AirBNB for the short term and then sell the property) - If you can narrow down to one or two states, then I would look for "where are the tenants I want to deal with located" theres so many ways to answer that question but you may want to start looking in a major metro area... most states have less than 10 major cities or areas of decent population density. So if you narrowed to two states and 20 "areas" you at least cut that haystack in half while searching for that needle. Some people then also include price rent metrics to help. Also decide if you want to maximize cashflow no matter way, or you want a blend of cashflow and appreciation/equity build up. Different places offer different things.

I hope some of that has helped!

Thank you.  I just bought that book and I love all of your tips.  It gives me an idea where to start.  Thank you.
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Remington Lyman:

Quote from @Michele Velazquez:

I have decided I want to invest in a multi-family triplex or duplex. I live in So Cal so I prefer to invest out of state, but what resources are there to help you pick from one of the thousands of cities in the U.S. Any advice, tips, or resources for me to dive in there and pick the area I want to invest in? I feel like I am looking for a needle in a haystack!
It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s long-distance investing strategy and consists of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to invest in any market confidently.

As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio. I am also looking to invest in Cincinnati and Cleveland.

I definitely will be getting my core 4 but need to figure out where the team should be built first I think. What are your thoughts on a turnkey investment company?
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Andrew Garcia:

Hi @Michele Velazquez, first you have to determine your non-negotiables.
Is cashflow on day one a priority?
Is a market with strong population growth important to you?
The first step is determining which your non-negotiables are and then once you have those, you can narrow down the list.
Hope this helps! Let me know if I can be of any assistance.

Thank you, I will start deciding that asap
0 Reply
Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
4y
@Michele Velazquez 1) consider getting pre approved with a lender for a hypothetical scenario - this might help with narrowing down the prices you can qualify for 2) Do you want to live in the property or do you want to continue to live in socal and make this a 100% investment prop ?
0 Reply
Seth Young
Specialist · Southlake, TX · Member since 2021 · 213 posts · 157 votes
4y
A couple good questions to ask yourself:
Do you plan on using a management team or self managing?
What price points are you looking for?
Are you investing for cashflow, appreciation or a mix of both?
Is the market landlord friendly?
Best of luck with all your investing!
0 Reply
Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
4y
Quote from @Michele Velazquez:

I have decided I want to invest in a multi-family triplex or duplex. I live in So Cal so I prefer to invest out of state, but what resources are there to help you pick from one of the thousands of cities in the U.S. Any advice, tips, or resources for me to dive in there and pick the area I want to invest in? I feel like I am looking for a needle in a haystack!

I think it is important to look at population growths and where are companies choosing to set up shop? They pay people a lot of money to identify the best place for their business to set up shop.
I personally recommend Columbus Ohio. With big businesses being in Columbus such as Intel, Amazon, Chipotle, the Limited, and more. We have seen people flooding here. I think now is a perfect time to invest here and I help multiple clients every week get incredible deals. This article states the stats and trends for Columbus, https://learn.roofstock.com/blog/columbus-oh-real-estate-market.
2 Reply
Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
4y
@Michele Velazquez
I would highly recommend Houston, Texas, as rental income growth and appreciation here are steady.

You can be in touch with local real estate professionals like agents, lenders, investors etc. to understand the current local market.

Good luck!
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Dana Davis
Member since 2021 · 7 posts · 1 vote
4y
@Scott Allen
What is your four core
0 Reply
Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
4y
@Michele Velazquez have you ever lived anywhere else? I am hesitant to star investing in markets I don't have an inside edge in. Either have a partner there or go for places you know well IMO.
[email protected]512-888-9122
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0 Reply
Tremon P.
Real Estate Agent · VA · Member since 2020 · 45 posts · 12 votes
4y
@Scott Allen OH is good for BRRRR?
0 Reply
Scott AllenBusiness Member
Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
4y
Quote from @Dana Davis:

@Scott Allen
What is your four core
The core 4 is David Greene’s long-distance investing strategy and consists of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to invest in any market confidently.
[email protected]614-698-1227
Reafco - Columbus, OH
Website View Page
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Dave Skow:

@Michele Velazquez 1) consider getting pre approved with a lender for a hypothetical scenario - this might help with narrowing down the prices you can qualify for 2) Do you want to live in the property or do you want to continue to live in socal and make this a 100% investment prop ?

I actually am preapproved here so I know what I am working with and definitely not living on property :)
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Seth Young:

A couple good questions to ask yourself:
Do you plan on using a management team or self managing?
What price points are you looking for?
Are you investing for cashflow, appreciation or a mix of both?
Is the market landlord friendly?
Best of luck with all your investing!

Thank you. I will definitely focus on this!
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Steven Foster Wilson:

Quote from @Michele Velazquez:

I have decided I want to invest in a multi-family triplex or duplex. I live in So Cal so I prefer to invest out of state, but what resources are there to help you pick from one of the thousands of cities in the U.S. Any advice, tips, or resources for me to dive in there and pick the area I want to invest in? I feel like I am looking for a needle in a haystack!

I think it is important to look at population growths and where are companies choosing to set up shop? They pay people a lot of money to identify the best place for their business to set up shop.
I personally recommend Columbus Ohio. With big businesses being in Columbus such as Intel, Amazon, Chipotle, the Limited, and more. We have seen people flooding here. I think now is a perfect time to invest here and I help multiple clients every week get incredible deals. This article states the stats and trends for Columbus, https://learn.roofstock.com/blog/columbus-oh-real-estate-market.

All good tips, thank you
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Jordan Moorhead:

@Michele Velazquez have you ever lived anywhere else? I am hesitant to star investing in markets I don't have an inside edge in. Either have a partner there or go for places you know well IMO.

Yes, I've lived a lot of places. And I know it's scary but I am never leaving beautiful so cal and I can't afford another home here lol
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