Recommendations in any state to consider buying investment property

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Recommendations in any state to consider buying investment property

Chealsi Stocco
Member since 2024 · 9 posts · 11 votes

I am just starting real estate investing. What are some states (and specific areas in those states) that are worthwhile to research and consider purchasing properties? What are some resources that you like to use to determine what areas to research and consider?

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
2y

You are just going to get a bunch of people pumping their markets here, especially if they are agents. You are casting a net too wide right now. What research have you done so far on market and investment vehicles that you might be interested in? Choosing a market for your first investment should be as close to local as possible or you won't learn anything and will be too hands off.

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y

    What are you looking for Rentals or flips to homeowners? Cash on hand ? Do you know how to determine ARV, reno budgets, and what to look for when buying ?

    2Reply
  • Bradley BuxtonBusiness Member
    Real Estate Agent · NV · Member since 2023 · 1k+ posts · 720 votes
    2y
    Quote from @Chealsi Stocco:

    I am just starting real estate investing. What are some states (and specific areas in those states) that are worthwhile to research and consider purchasing properties? What are some resources that you like to use to determine what areas to research and consider?

    A very general question that will illicit many responses. I like to invest where I live or a state nearby where you live. That’s why I like Reno, NV. Looks for developing areas and where you can build wealth to meet your goals, energy, and capital.
    1Reply
  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    Hi Chealsi! Welcome to BiggerPockets! You're in the right place to learn about real estate investing.

    I like starting in the Midwest because it's affordable and offers good cash flow. Following David Green's Core 4 strategy (realtor, contractor, property manager, and lender) gives confidence to invest anywhere. I focus on Columbus, Ohio, which has seen significant growth, especially with tech giants like Intel, Meta, Amazon, and Google setting up operations, driving up property prices and job opportunities. I also invest in Cleveland and Dayton. Let me know if you need assistance!

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    2y

    You are just going to get a bunch of people pumping their markets here, especially if they are agents. You are casting a net too wide right now. What research have you done so far on market and investment vehicles that you might be interested in? Choosing a market for your first investment should be as close to local as possible or you won't learn anything and will be too hands off.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    4Reply
  • Chealsi Stocco
    OP
    Member since 2024 · 9 posts · 11 votes
    2y
    Quote from @Bradley Buxton:
    Quote from @Chealsi Stocco:

    I am just starting real estate investing. What are some states (and specific areas in those states) that are worthwhile to research and consider purchasing properties? What are some resources that you like to use to determine what areas to research and consider?

    A very general question that will illicit many responses. I like to invest where I live or a state nearby where you live. That’s why I like Reno, NV. Looks for developing areas and where you can build wealth to meet your goals, energy, and capital.

     Bradley,

    Thank you for your response!

    0Reply
  • Chealsi Stocco
    OP
    Member since 2024 · 9 posts · 11 votes
    2y
    Quote from @Min Zhang:

    Hi Chealsi! Welcome to BiggerPockets! You're in the right place to learn about real estate investing.

    I like starting in the Midwest because it's affordable and offers good cash flow. Following David Green's Core 4 strategy (realtor, contractor, property manager, and lender) gives confidence to invest anywhere. I focus on Columbus, Ohio, which has seen significant growth, especially with tech giants like Intel, Meta, Amazon, and Google setting up operations, driving up property prices and job opportunities. I also invest in Cleveland and Dayton. Let me know if you need assistance!


     Min,

    Thank you for your feedback, I appreciate your input! I will be looking into the areas that you have recommended.

    1Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    2y

    Hey Chealsi,

    Columbus, Ohio is a great market to consider if you're leaning towards appreciation. Multiple, billion dollar companies are investing investing heavy in our area, such as Intel, Google, and Amazon. Which in turn will bring plenty of other investors and general business to the area. I moved here from Florida after seeing the projected growth.

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  • Chealsi Stocco
    OP
    Member since 2024 · 9 posts · 11 votes
    2y

    Samuel,

    Thank you for the insight. Columbus does seem to be a great place to invest. What websites do you like to look on for investment properties?

    0Reply
  • Chealsi Stocco
    OP
    Member since 2024 · 9 posts · 11 votes
    2y

    Also, what areas in Columbus do you recommend that would be best to consider properties?

    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y

    @Chealsi Stocco be careful chasing ROI because as it increases, so does the risks!

    Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

    If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

    So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

    Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

    Class A Properties:
    Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% the more recent norm.
    Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

    Class B Properties:
    Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
    Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

    Class C Properties:
    Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
    Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
    Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

    Class D Properties:
    Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
    Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
    Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

    Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

    What else can we assist you with?

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  • Leslie Pappas
    Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    2y
    Quote from @Chealsi Stocco:

    I am just starting real estate investing. What are some states (and specific areas in those states) that are worthwhile to research and consider purchasing properties? What are some resources that you like to use to determine what areas to research and consider?


     Hi Chealsi​​, welcome to BP! There plenty of other opportunities elsewhere, my clients are involved in institutional grade properties across the country. My recommendation is to choose cities in safe and economically diversified areas with above-average income and population growth. It can also be safer to diversify your investment properties across the country. There is still good money to be made in AZ, FL, GA, TX and other states, however, picking the right submarkets is key.

    A very good source of local analysis is rereport.com

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    2y
    Quote from @Chealsi Stocco:

    I am just starting real estate investing. What are some states (and specific areas in those states) that are worthwhile to research and consider purchasing properties? What are some resources that you like to use to determine what areas to research and consider?


     Ohio is a solid state to purchase rentals in

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  • Simon Ashbaugh
    Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
    2y
    Quote from @Chealsi Stocco:

    Also, what areas in Columbus do you recommend that would be best to consider properties?


    Hey Chealsi, Columbus has seen a lot of positive development in recent years. While there are certainly some neighborhoods that offer more amenities or a higher standard of living, there aren't any areas I'd strongly advise against. Most locations in Columbus have the potential to be a good investment. 

    0Reply
  • Chealsi Stocco
    OP
    Member since 2024 · 9 posts · 11 votes
    2y

    Hi Simon,

    Thank you for your input. What are some websites that would be beneficial to look at to evaluate properties in the Columbus area other than Zillow? Where are some areas that you have invested in?

    1Reply
  • Chealsi Stocco
    OP
    Member since 2024 · 9 posts · 11 votes
    2y
    Quote from @Leslie Pappas:
    Quote from @Chealsi Stocco:

    I am just starting real estate investing. What are some states (and specific areas in those states) that are worthwhile to research and consider purchasing properties? What are some resources that you like to use to determine what areas to research and consider?


     Hi Chealsi​​, welcome to BP! There plenty of other opportunities elsewhere, my clients are involved in institutional grade properties across the country. My recommendation is to choose cities in safe and economically diversified areas with above-average income and population growth. It can also be safer to diversify your investment properties across the country. There is still good money to be made in AZ, FL, GA, TX and other states, however, picking the right submarkets is key.

    A very good source of local analysis is rereport.com


     Thank you, Leslie! I appreciate the information that you have provided!

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Chealsi Stocco

    the best places to invest are the places you know really well or would have an advantage in.  like: where you live. where you have family.  where you went to college.  where you like to vacation.

    can you start with a house hack?  It's not for everyone, depending on family and lifestyle, but it is hands down the best way to get started.

    also, i strongly recommend you read these two threads.  they give a more realistic picture of the first few years of investing than the online hype.

    https://www.biggerpockets.com/forums/12/topics/1171104-the-m...

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

    1Reply
  • Chealsi Stocco
    OP
    Member since 2024 · 9 posts · 11 votes
    2y

    Great, thank you for the insight!

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

    I am just starting real estate investing. What are some states (and specific areas in those states) that are worthwhile to research and consider purchasing properties? What are some resources that you like to use to determine what areas to research and consider?

    Hi Chealsi, I like Columbus Ohio because I see it being one of the biggest metropolitan cities in the next 10-20 years, all signs are pointing here! Population is growing aggressively and jobs are moving here especially with major employers like Intel, Google, Amazon, Nationwide, etc. On top of that, you have one of the biggest and best universities in the world here with Ohio State University. The cost of living is extremely low compared to other cities and you can still many many positive cash flowing and 1% deals here. On top of that, you get great appreciation and very landlord friendly laws. Tons of investors are buying Columbus up! As an investor and agent here, let me know if you have any questions or want to connect

    [email protected]614-300-7535
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  • Ahmed Hikal
    New to Real Estate · KSA · Member since 2024 · 2 posts · 0 votes
    2y
    Quote from @Michael Smythe:

    @Chealsi Stocco be careful chasing ROI because as it increases, so does the risks!

    Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

    If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

    So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

    Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

    Class A Properties:
    Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% the more recent norm.
    Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

    Class B Properties:
    Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
    Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

    Class C Properties:
    Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
    Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
    Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

    Class D Properties:
    Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
    Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
    Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

    Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

    What else can we assist you with?

    Hello , Sorry I am new to real estate world , and just try to learn.

    I noticed your reply , pleas can you explain more for property clasiffications and how we can distinguish between them , based on prices , locations ..etc or other factors included. How yo gain knowledge to idetify the class of property
    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y

    @Ahmed Hikal great question!

    Not easy to answer.

    In our opinion, the most important element in determining a Property Class is the target tenant pool.

    Just think about it... what do you think will happen to a Class A property is you rent it to a Class D tenant?

    Or the opposite... what type of tenant will you get if you rehab a property to Class A standards, that sits in the middle of a Class D area?

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  • Becca F.
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    There are a lot of great comments above. Are you looking to flip or do rentals (long-term, mid-term and short-term)? Different markets require different strategies. What's your budget? Cash reserves? 

    If you can house hack, you could buy a 2 to 4 unit, live in one of the units and rent out the others. The negative is you're living next door to your tenants or in the case of a single family home, renting out rooms maybe to trusted friends? The advantage of staying local or within driving distance is being able to see and check on the property. 

    I wouldn't pick a random market far away based on numbers on a spreadsheet.  I listened to a lot of advice from people on BP and other investors to "acquire doors and cash flow" and I've been losing money on what was supposed to cash flow from my Class C Indianapolis rentals.  I was losing $300 to $700 a month from repairs called in by the tenant - hopefully it's stabilizing now after a year of ownership (no repairs called in for 2 months now).  And I used to live in the Indy area - I considered other markets like Memphis, Cincinnati, Cleveland but since I didn't know those cities, I stuck with Indy. Your first year will be rough no matter which market you pick. My other properties are Class A and I was expecting Class A results with Class C. 

    If you decide on out of state market, I would network with local investors and ask for their feedback. Network with other investors at real estate meetups who can tell you about the local and  out of state investments. Also talk to at least 3 to 5 agents, contractors, and property management companies. I wish I had talked to the PMs before I submitted my offers. I also noticed a pattern of overinflated ARVs with renovations - run your numbers conservatively.  

    Do a Google Map search to see what's around the subject property (sometimes the map is out of date). I recommend having a local experienced investor (an unbiased party not someone trying to sell you something) do a detailed video tour of the property and the street/neighborhood before you submit an offer and paying them for their time $100 or $150. There are some real estate consultants who will do this and give you a detailed report but it costs a little more ($200 in Indy). Obviously you wouldn't want to  do this with 20 homes but narrow it down to a few properties. Always get a full inspection and sewer line scope. 

    3Reply
  • Taz Zettergren
    Real Estate Agent · Memphis, TN · Member since 2019 · 365 posts · 264 votes
    2y

    Welcome @Chealsi Stocco ! I'd recommend the southern/middle part of the country because the entry points are much lower and the laws are landlord friendly. Places like Mempihs, TN Little Rock, AR, DFW,HOU or SAN in TX and I'd also consider OKC/Tulsa OK as well. Feel free to reach out if you have any questions, happy to help

    0Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    2y
    Quote from @Chealsi Stocco:

    Hi Simon,

    Thank you for your input. What are some websites that would be beneficial to look at to evaluate properties in the Columbus area other than Zillow? Where are some areas that you have invested in?


    Redfin, Realtor.Com, Homes.Com, to name a few. Or have a local agent set you up on an MLS search.

    0Reply
  • Maureen McCann
    Investor · San Diego, CA · Member since 2024 · 78 posts · 54 votes
    2y

    HI Chealsi...Investing in real estate is an exceptional way to grow your net worth. There are some good cash flowing markets in the US. There will be more than I name here as I only know the markets that I serve very well. You need to check out AL: Birmingham, Tuscaloosa, Huntsville, Decatur, Athens, Cullman, Warrior, Jasper and in TN: Chattanooga.  I can send you the link to view properties. I just need the green light from you.  Cheers!

    0Reply
  • Nader Shariff
    Detroit, MI · Member since 2020 · 150 posts · 68 votes
    2y

    I am a big believer in the Detroit , Michigan marketplace. I would recommend you give it a peak and see if it is a market you would consider. 

    0Reply
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