Choosing cities to start investing

18 Replies

Hi guys

I am a foreigner, with cash, looking to invest in single-family buy-to-hold properties.

Big question is: WHERE?

After spending a while on research (forums and podcasts!) I am considering diversifying into 3 large cities (to reduce risk) and acquire 3-4 properties in each, using a reputable provider in each city, with a view to expanding the number of properties in each city later.

My list is currently as follows:

1. Houston TX

2. Atlanta GA

3. Birmingham AL

There is sufficient cash to be able to put down the deposits, and financing the balance doesn't seem to be an issue.

Income is really important.  Capital growth would be nice.

What does the BP community think?

John

@John Haveman The key question that you need to ask yourself is who do you want to serve? Within each of those cities that you listed (and every city for that matter) there are distinct sub markets that have unique characteristics, so understanding who you want to serve will help you determine the BEST location for your investments.  For example, you mention single family homes, but does that mean low income housing or single family homes in areas with great school districts? Understanding who you truly want to serve can provide the insight to help you assemble the team that is necessary for manage the property you choose. 

Feel free to reach out if you have any additional questions.  Best of luck in your investing.

Hello, I've got four town homes that will be for sale in Atlanta, GA. They are located in Edgewood which is a very hot market!  We are doing presales and open to foreign investors. My email just got blocked so contact me on BP. 

My cities are all one with high densities of duplexes and multi-families.
These cash flow and the vacancy rate is the same in the pro-forma but in reality I never have to worry about paying the full mortgage note without tenant payments to assist.

Originally posted by @John Haveman :

Hi guys

I am a foreigner, with cash, looking to invest in single-family buy-to-hold properties.

Big question is: WHERE?

After spending a while on research (forums and podcasts!) I am considering diversifying into 3 large cities (to reduce risk) and acquire 3-4 properties in each, using a reputable provider in each city, with a view to expanding the number of properties in each city later.

My list is currently as follows:

1. Houston TX

2. Atlanta GA

3. Birmingham AL

There is sufficient cash to be able to put down the deposits, and financing the balance doesn't seem to be an issue.

Income is really important.  Capital growth would be nice.

What does the BP community think?

John

If you are looking for markets where you can get a decent ROI you should use the link below. There are a few markets that you can get a decent return for your Turnkey and you want to make sure you know which ones work best! Good luck!

The Best Types of Markets for Profitable Turnkey Properties

Originally posted by @Christopher Cousin :

@John Haveman The key question that you need to ask yourself is who do you want to serve? Within each of those cities that you listed (and every city for that matter) there are distinct sub markets that have unique characteristics, so understanding who you want to serve will help you determine the BEST location for your investments.  For example, you mention single family homes, but does that mean low income housing or single family homes in areas with great school districts? Understanding who you truly want to serve can provide the insight to help you assemble the team that is necessary for manage the property you choose. 

Feel free to reach out if you have any additional questions.  Best of luck in your investing.

Thanks Christopher

I appreciate the advice - I do need to be more specific with a view to getting the team together.  I would focus on single family homes, as you say, "in areas with great school districts."

Originally posted by @Tom Ott :

If you are looking for markets where you can get a decent ROI you should use the link below. There are a few markets that you can get a decent return for your Turnkey and you want to make sure you know which ones work best! Good luck!

The Best Types of Markets for Profitable Turnkey Properties

 Thanks Tom!  Cleveland looks interesting as well - I'll look at your website for more info.

Originally posted by @Dave Ramirez :

My cities are all one with high densities of duplexes and multi-families.
These cash flow and the vacancy rate is the same in the pro-forma but in reality I never have to worry about paying the full mortgage note without tenant payments to assist.

Hi Dave

In which markets are you currently in, and why?

Thanks!

Originally posted by @Brian Ploszay :

I find that turn key providers often are selling investments that are mediocre.  Cheap houses in areas that will not have growth.  

I like Houston and Atlanta on your list.

Thanks Brian

Do you have any providers you can point me to, in the Houston & Atlanta area?

Appreciated

Sorry, I do not.   Feel free to contact me with questions about properties you find.  Even though I don't live in those areas, I can quickly analyze the surrounding neighborhood.

So if cash flow is your focus, there are honestly better markets out there. Atlanta hit it's boom a few years ago, so prices there are high now and returns are much lower than they used to be. It's in general a fairly saturated market. I'm grew up there and all my investment properties are there. It was great to buy a few years ago, but there are better markets now in my opinion.

Houston is similar to Atlanta. There's still cash flow, but inventory is much lower and returns are squeezed since there was such an investor influx there a few years ago.

Birmingham would be my preference of the three.

However, there are markets with higher returns, still with trusted providers. Reach out anytime if you want to see some market and property samples, or ask any market questions as well!

Houston is a great area to invest. You will see many reasons why on this blog;

http://blog.texasturnkeyproperties.com/

Since you are investing from out of the market, you will need excellent Property Management. Be sure to make researching Property Management part of your due diligence. I see a lot of posts that focus on the deal and finances and returns and very few that even mention having a great property management partner. I deal with several experienced, seasoned investors and I always know when I've got one because they have as many questions about PM as the deal.

Long after the deal is done and that excitement has subsided, you want to have a great PM company on your side.    

Originally posted by @Brian Ploszay :

Sorry, I do not.   Feel free to contact me with questions about properties you find.  Even though I don't live in those areas, I can quickly analyze the surrounding neighborhood.

 Thanks Brian, I appreciate it, and I'll definitely take you up on your offer!

Originally posted by @Brian Foster :

Houston is a great area to invest. You will see many reasons why on this blog;

http://blog.texasturnkeyproperties.com/

Since you are investing from out of the market, you will need excellent Property Management. Be sure to make researching Property Management part of your due diligence. I see a lot of posts that focus on the deal and finances and returns and very few that even mention having a great property management partner. I deal with several experienced, seasoned investors and I always know when I've got one because they have as many questions about PM as the deal.

Long after the deal is done and that excitement has subsided, you want to have a great PM company on your side.    

Great advice, Brian

I really appreciate the feedback.  Houston is definitely on my list, and I'll be in touch.

John

Originally posted by @David Faulkner :

There are no good deals on RE in Cape Town?

Hi David

Good question!

There are certainly deals, but the South African political situation is uncertain, access to gearing is limited, and the currency (Rand) is extremely volatile.

John

@John Haveman I am active in the Houston market and can help find SFH deals. Happy to send these on your way to have a look at. My goal is to be able to streamline the process for out of state investors, being the eyes on the ground up until the point of sale or lease (I am currently studying for Realtors license) PM if you want to connect.