Newbie Investor Choosing a Market

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Newbie Investor Choosing a Market

Nicole Blankenship
Investor · Arlington, VA · Member since 2023 · 4 posts · 20 votes

Hello BP community-

I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

Dayton, Columbus, or Cleveland, OH
Fayetteville, NC
St. Louis, MO
Detroit, MI
Columbia, SC
Indianapolis, IN
Louisville, KY

I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y

@Nicole Blankenship

welcome.  i lived in Northern Virginia for 16 years and still own property there, so i totally understand the desire to find a lower cost market to invest in.  I want to strongly caution you, though, to really do thorough due diligence.  a lot of investors in DC, CA, etc. find a property in the midwest that looks great... and then just turns into a money pit, and deferred capex consumes years and years of cash flow.  and with the jump in interest rates cash flow is even more challenging at the moment.

as an example... see this really thoughtful thread.  i'd argue this investor did everything right... and the cash flow just wasn't as much as hoped for, because the midwest is not a panacea.

https://www.biggerpockets.com/forums/48/topics/1159104-overl...

and unfortunately... if you're looking for something turnkey, $40K just isn't going to get you very much.  you might get 1 property in a decent neighborhood... and then be at about break even on cash flow each month.  i just don't see how that's a good use of your entire RE budget, and/or liquidating other investments to not get a return.

i am encouraged that you said that you plan to fly to the chosen market in person, but one or two trips just isn't going to get you very much.  have you considered house hacking?  it's tougher in the DC metro because of the lack of small multifamily so you'd be looking at roommates.  another option is to pick a DC exurb like Hagerstown or Culpeper or Winchester or even the nicer areas of Baltimore (get some local experts to guide you if you go that direction) and start going there every weekend and really put some time in.

hope this helps, feel free to ask any follow ups or PM me

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Nicole Blankenship

    welcome.  i lived in Northern Virginia for 16 years and still own property there, so i totally understand the desire to find a lower cost market to invest in.  I want to strongly caution you, though, to really do thorough due diligence.  a lot of investors in DC, CA, etc. find a property in the midwest that looks great... and then just turns into a money pit, and deferred capex consumes years and years of cash flow.  and with the jump in interest rates cash flow is even more challenging at the moment.

    as an example... see this really thoughtful thread.  i'd argue this investor did everything right... and the cash flow just wasn't as much as hoped for, because the midwest is not a panacea.

    https://www.biggerpockets.com/forums/48/topics/1159104-overl...

    and unfortunately... if you're looking for something turnkey, $40K just isn't going to get you very much.  you might get 1 property in a decent neighborhood... and then be at about break even on cash flow each month.  i just don't see how that's a good use of your entire RE budget, and/or liquidating other investments to not get a return.

    i am encouraged that you said that you plan to fly to the chosen market in person, but one or two trips just isn't going to get you very much.  have you considered house hacking?  it's tougher in the DC metro because of the lack of small multifamily so you'd be looking at roommates.  another option is to pick a DC exurb like Hagerstown or Culpeper or Winchester or even the nicer areas of Baltimore (get some local experts to guide you if you go that direction) and start going there every weekend and really put some time in.

    hope this helps, feel free to ask any follow ups or PM me

    8Reply
  • Vadim F.
    Investor · Member since 2020 · 337 posts · 213 votes
    2y

    You have a mix of cash flow and appreciation markets mentioned, so I would recommend you pick between what you're looking to achieve.  

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    2y
    Quote from @Nicole Blankenship:

    Hello BP community-

    I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

    I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

    Dayton, Columbus, or Cleveland, OH
    Fayetteville, NC
    St. Louis, MO
    Detroit, MI
    Columbia, SC
    Indianapolis, IN
    Louisville, KY

    I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)


     If you're into Cleveland, Columbus and Dayton, you may also want to look at Toledo, Akron and Cincinnati, Ohio.

    0Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    2y

    Columbus and Cincinnati will be more expensive than Cleveland or Dayton. So just depends if you want more cashflow/ a higher growth market @Nicole Blankenship

    [email protected]614-963-3340
    3Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    2y

    Hey Nicole, 

    Picking the final location is a big decision! When doing research on areas that you are interested in, I would identify industries with positive growth trends, analyze market reports, industry publications, and economic forecasts, consider emerging markets and technologies.

    Personally, I invest in Columbus. I believe there will be high appreciation here, due to many large companies pumping money into our area, such as Intel, Google, and Amazon.

    [email protected]614-662-1652
    Reafco - Samuel Diouf528 Reviews
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    6Reply
  • Simon Ashbaugh
    Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
    2y

    Hey Nicole, welcome to BiggerPockets! If you want a steady income, go for Cleveland. But if you're thinking long-term value increase, put your money on Columbus. It's all about what you're aiming for.

    4Reply
  • Jack Seiden
    Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
    2y
    Quote from @Nicole Blankenship:

    Hello BP community-

    I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

    I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

    Dayton, Columbus, or Cleveland, OH
    Fayetteville, NC
    St. Louis, MO
    Detroit, MI
    Columbia, SC
    Indianapolis, IN
    Louisville, KY

    I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)


     I’d at least consider taking that 40k and putting 10% and house hacking in pg county, Bowie, Fort Washington and even some parts of temple hills can be pretty nice (if boring) and some what affordable at least compared to the rest of the dmv, not obviously it’s not gonna have the nightlife of Arlington which depending on your situation could be a draw back.

    1Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    2y

    @Nicole Blankenship
    The Cleveland OH market is a great option for investing in from out of state since it has a low barrier of entry and cashflows. 

    [email protected]614-412-4565
    Reafco-557 Reviews
    View Page
    2Reply
  • Jayson Cain
    Lender · Manhattan Beach, CA · Member since 2017 · 423 posts · 268 votes
    2y

    Hi @Nicole Blankenship,

    I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals. I've started looking at Columbus because my business partners have found success doing Mid Term Rentals there and the returns are solid.

    I've also helped other investors with their DSCR loans and flip projects in Columbus. Happy to share my experiences and chat with you more if you're interested.

    3Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    2y

    @Nicole Blankenship- thanks ...I wiuld recommend getting a  full loan pre approval in place  for the  scenario you are  considering to make sure you this in place  before  agressively looking .  This will also  let you get   educated on present pricing for loans and to get organized - Good luck

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    2y
    Quote from @Nicole Blankenship:

    Hello BP community-

    I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

    I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

    Dayton, Columbus, or Cleveland, OH
    Fayetteville, NC
    St. Louis, MO
    Detroit, MI
    Columbia, SC
    Indianapolis, IN
    Louisville, KY

    I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)


    I am always down to talk about real estate investing in Columbus, Ohio. I started off with a duplex in 2017 and now have a solid portfolio of rentals. I invest in single families all the way to apartments and office buildings
    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
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    2Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
    2y
    Quote from @Nicole Blankenship:

    Hello BP community-

    I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

    I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

    Dayton, Columbus, or Cleveland, OH
    Fayetteville, NC
    St. Louis, MO
    Detroit, MI
    Columbia, SC
    Indianapolis, IN
    Louisville, KY

    I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)


     Hey Nicole, you mention Columbus and Dayton, OH. I have to say Cincinnati and Northern Ky are pretty similar to those markets. Less known but something to consider when looking in markets. Let me know and we can get on a call to talk about the market!

    [email protected]859-443-4952
    Sam McCormack Realtor
    View Page
    1Reply
  • Logan LaperriereBusiness Member
    Real Estate Agent · Grand Rapids, MI · Member since 2023 · 333 posts · 124 votes
    2y
    Quote from @Nicole Blankenship:

    Hello BP community-

    I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

    I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

    Dayton, Columbus, or Cleveland, OH
    Fayetteville, NC
    St. Louis, MO
    Detroit, MI
    Columbia, SC
    Indianapolis, IN
    Louisville, KY

    I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)


     Nicole, Welcome to the Forum

    I see that you are interested in Detroit. Have you ever considered other areas like Ann Arbor, Lansing, Kalamazoo, or Grand Rapids?

    Do you currently own your home? if not you may want to consider house hacking. It is a great way to get started with investing in real estate.

     I am a Realtor in Michigan. I currently own rental properties in Metro Detroit, Kalamazoo, and Grand Rapids. With $40K to invest, it sounds like your budget will be around $150K. Have you spoken with any lenders yet? Once you have pre approval you can begin searching for properties. I would highly recommend speaking with one before you go any further with your search. If you would like a recommendation on a lender, or would like to speak about potential properties in Michigan, I would be happy to help. Good Luck with your journey!!

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    To be honest, and not parrot this REI is financial freedom dream. If those were my choices, and I had just $40k to start I would wait till I could get more to enter a better market or put that money to use in just govt/private debt. A couple of those markets are okay, but to weather the storms in these lower-grade areas you need to be more liquid.

    This **** stinks sometimes. You'll need to be more equipped, you won't be able to handle a capex and tenant issue in the first 12-15 months. 

    3Reply
  • Daniel Dobbs
    Real Estate Agent · Nicholasville · Member since 2022 · 38 posts · 10 votes
    2y

    If the market is like it is here it's hard to find SFH that will cash flow without needing quite a bit of work. Turnkey that hit the market most wont cash flow. You might look into duplexes or quadplexes. Some of them are pricing at outrages prices but a lot more are in the ballpark of cash flow. I'm in the Lexington, KY area not far from Louisville, KY but if you are pre-approved send me a PM and I can send you some properties.

    1Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y

    @Nicole Blankenship check out all the great things happening in Detroit!

    https://michiganchronicle.com/2024/01/03/major-developments-that-will-define-detroit-in-2024/

    Logical Property Management4.9457 Reviews
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    0Reply
  • Ray Slack
    Member since 2019 · 11 posts · 2 votes
    2y

    Why not consider Baltimore.?  It's only about a 90 minute drive from you in Arlington and is similar to the other cities you mentioned. 

    0Reply
  • Jason Allen
    Attorney · Columbus, OH · Member since 2023 · 193 posts · 145 votes
    2y
    Quote from @Nicole Blankenship:

    Hello BP community-

    I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

    I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

    Dayton, Columbus, or Cleveland, OH
    Fayetteville, NC
    St. Louis, MO
    Detroit, MI
    Columbia, SC
    Indianapolis, IN
    Louisville, KY

    I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)


     I'd recommend buying a multi-family property in Columbus, Ohio. Our market is appreciating and there are an abundance of deals that meet or exceed the 1% rule. We work with out of state investors everyday who keep coming back because the significant return on their cash. 

    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    2y
    Quote from @Nicole Blankenship:

    Hello BP community-

    I've been an avid listener to this podcast ever since my interest in real estate peaked last year. I just read David Greene's long distance real estate investing book and am now trying to choose a market that is out of state from me. 

    I am currently in Arlington, VA (DMV area) where housing prices are pretty expensive. I'd like to purchase a rental property (SFH 3/4BR) out of state that is either turnkey or needs minor rehab done with it. My full time job is flexible so I am able to fly out to this location to get a look at the property & make connections in the area. I have about $40K cash (and other investments if needed to withdraw) saved up for this purchase, now I just need to zero in on a location. I have narrowed down my options to the markets below:

    Dayton, Columbus, or Cleveland, OH
    Fayetteville, NC
    St. Louis, MO
    Detroit, MI
    Columbia, SC
    Indianapolis, IN
    Louisville, KY

    I know these are a lot of options.. I am looking to connect with any investors, agents, lenders, etc. in these areas OR any that you are currently in and recommend to other investors starting out. Thank you in advance and I look forward to connecting with you :)

    Hey Nicole, totally can relate with you being from an expensive real estate market - I moved to Columbus a few years ago (from Portland, Oregon which was super expensive) to become a full time real estate investor, and ever since, I've completed quite a lot of BRRRRs, flips, and own a successful rental portfolio here in Columbus Ohio. There's so many catalysts for population and job growth (Intel, Honda, Amazon, Nationwide Hospital, etc). I can definitely tell you there's still a lot of positive cash flowing and 1% rule deals and you get amazing appreciation. As an investor and agent here in Columbus Ohio, if you have any questions or want to connect, definitely reach out!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9124 Reviews
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    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Jason Allen

    can you post an example of a turnkey, high quality deal that can be purchased with $40K and cash flows more than trivially?

    2Reply
  • James WilcoxBusiness Member
    Real Estate Agent · Bowling Green KY ~ Lexington, KY · Member since 2015 · 1k+ posts · 603 votes
    2y
    Quote from @Daniel Dobbs:

    If the market is like it is here it's hard to find SFH that will cash flow without needing quite a bit of work. Turnkey that hit the market most wont cash flow. You might look into duplexes or quadplexes. Some of them are pricing at outrages prices but a lot more are in the ballpark of cash flow. I'm in the Lexington, KY area not far from Louisville, KY but if you are pre-approved send me a PM and I can send you some properties.

    Good to see some more central KY representation on the forums.

    REI James w/ eXp Realty54 Reviews
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    2Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 2k+ posts · 3k+ votes
    2y

    @Nicole Blankenship

    Welcome to BP.  The midwest is an excellent location for stable cash flow and low barrier of entry.  I personally like new construction in the SE in markets like AL, SC, FL, TX, etc. where you will see strong cash flow and strong appreciation in both rents and market values.  However, homes are more expensive there that requires more down payment.

    [email protected]800-311-6781Podcast Guest on Show How to Get 10%+ Off Your Next Real Estate Deal Right Now
    Rent To Retirement5335 Reviews
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    0Reply
  • Zach LemasterBusiness Member
    Rental Property Investor · Denver, CO · Member since 2015 · 2k+ posts · 3k+ votes
    2y

    Midwest markets we like: OH (Cleveland and surrounding locations), IN, MO.

    [email protected]800-311-6781Podcast Guest on Show How to Get 10%+ Off Your Next Real Estate Deal Right Now
    Rent To Retirement5335 Reviews
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    0Reply
  • Jason Allen
    Attorney · Columbus, OH · Member since 2023 · 193 posts · 145 votes
    2y
    Quote from @Nicholas L.:

    @Jason Allen

    can you post an example of a turnkey, high quality deal that can be purchased with $40K and cash flows more than trivially?


    I'd be glad to run a few by you that I have available right now.

    0Reply
  • Hannah Roach
    Real Estate Agent · Fayetteville, NC · Member since 2023 · 24 posts · 28 votes
    2y

    Hi Nicole! I see that one of the markets you are interested in is Fayetteville, NC. I am an investment agent out here and I think I could be a great resource for you! I'd love to set up a time we can speak to go over some details!

    0Reply
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