Where to Invest Next

[Sarah Hadassah Negrón]

Hey all,

I am in the early stages of preparing an out of state property for sale, and I am curious about which real estate markets have the best ROI/CAP rates etc. I live in the Bay Area and a few years back, I inherited a condo unit in Chicago with an existing tenant that did not cash flow. I'm just coming up for air after a brutal ~8 month long eviction process (nonpayment of rent), and I am realizing the numbers don't make sense to rent again given market rates in the area are lower than costs to keep the place up (mortgage + monthly assessment + repairs + insurance). Also HOA is quite restrictive, so there's little potential to be creative with my rental strategy with a short- or mid-term rental. There is equity in the property and the realtor estimates my net at close would be ~$75K. Thoughts on which markets to look next? I don't want to invest in a condo again - open to single-family standalone homes, multi-family, short- and mid-term rentals. Also very open to rent to Section 8 tenants.

[Nicholas L.]

@Sarah Hadassah Negrón

I would pick a market that you have a strong tie to: either a market within a couple hours of you, or a place where you have family, or a place where you like to vacation, or some combination.

Too many people try to do exactly what you are trying to do - pick based on a number, like purchase price, or anticipated return - and this may put you in a market thousands of miles away where you have no background knowledge, no team, and no advantage.

I hope this helps

Happy to answer any other questions you have