How to narrow your search location?

2 Replies

Good Day All, I'm looking for a little advice on how some of you narrowed/focused your search location. I've owned a few rentals in the past, but more by accident rather than a conscious cash flow centric strategy. I did well on both when I sold but neither cash flowed. I just got lucky with appreciation. My wife and I are now focused on acquiring our first cash flow positive property. We're in the Dallas area. we've been looking in and around college and military bases and there are some decent opportunities IMO. But we're not at all married to investing only in our area, or even in Texas. My question, is how some of you approached this conundrum? While my area of the country isn't super expensive, there are other areas such as Memphis, Cleveland, Indianapolis, etc... that would allow us to buy a duplex, triplex or fourplex for the cost of a SFH here. there's certainly down psycological comfort in having a property that we can drive too, but after reading @David Greene's book on long distance investing, it almost seems silly to only focus on areas we can drive to. looking out of state also opens up so many markets that it feels overwhelming. just looks for some advice, suggestions or even just to hear a few stories on how some of you narrowed your search. Did you just pick a market and focus, or do you base your search more on the property and be willing to invest wherever the "deal" leads you. Thanks in advance for your responses, I look forward to hearing your answers.
Originally posted by @Jason Lee :
Good Day All,

I'm looking for a little advice on how some of you narrowed/focused your search location. I've owned a few rentals in the past, but more by accident rather than a conscious cash flow centric strategy. I did well on both when I sold but neither cash flowed. I just got lucky with appreciation.

My wife and I are now focused on acquiring our first cash flow positive property. We're in the Dallas area. we've been looking in and around college and military bases and there are some decent opportunities IMO. But we're not at all married to investing only in our area, or even in Texas.

My question, is how some of you approached this conundrum? While my area of the country isn't super expensive, there are other areas such as Memphis, Cleveland, Indianapolis, etc... that would allow us to buy a duplex, triplex or fourplex for the cost of a SFH here. there's certainly down psycological comfort in having a property that we can drive too, but after reading @David Greene's book on long distance investing, it almost seems silly to only focus on areas we can drive to.

looking out of state also opens up so many markets that it feels overwhelming.

just looks for some advice, suggestions or even just to hear a few stories on how some of you narrowed your search. Did you just pick a market and focus, or do you base your search more on the property and be willing to invest wherever the "deal" leads you.

Thanks in advance for your responses, I look forward to hearing your answers.

 Cleveland, Indy & other Midwest markets are all very similar. You aren't gonna be doing anything measurably better or worse by picking Cleveland over Indy & vice versa. Splitting hairs between the two. I'd focus on figuring out what companies you like in those markets then when you pick a market make sure you buy right in said market. Buying in a bad area of any Midwestern city is gonna have a far bigger impact on the investment experience than picking one Midwestern city over another.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

James Wise, Real Esta

@Jason Lee It sounds like you are asking how people decide where to invest. This is a tricky question, mainly because it depends on what you are looking for in a property. Cash-Flow, Appreciation, stability, fix-n-flip etc.

It sounds like you are looking for cash flow, and you are right mid-west (right now) is the cash flow king. And although I have not looked into those areas very much, plenty of active investors on here swear by these markets. If you want to get into the nuts and bolts message @James Wise .

Now if you are looking into different criteria or a different area you have to identify who/what you want to be marketing towards. You say college/military bases, great starting criteria, but you should probably get into more of # college students or advantage of the military base. A military base with a critical mission, something other then a depot or staging/housing, and a 4 year state public college, so you get that government money from student loans coming in.