Assuming you have no other major obligations or constraints (i.e. family, job, finances) guiding you and could pick any place in the USA to move and build/start a real estate portfolio, which city would you start?
You have 100k and the objective of your move is to start in a location which can build passive income short term (within 5 years), not just long term wealth investments. A place for opportunities with high rent returns for relatively low purchase investments.
This question assumes you have good enough credit, debt/income ratio, income, etc that getting the loan will not be an issue.
FYI, the reason I ask is that it just so happens, I'm in just this unique situation explained above and am curious where other's would pick. I'm not a total newbie, but I have been buying properties while living and working abroad, with design, construction, and property management experience. I want to make a move back with the sole objective of dedicating full time to expanding my real estate portfolio.
Thanks in advance to all who share!
I couldn't tell you, because looking at the short term goes against every fiber of my being, but from what others have said, Baltimore, Cleveland, and Western Pennsylvania may be options.
@Aaron K. thx for the reply. I should clarify that I didn't mean to suggest long term gains are't important or worth considering. The goal, however, is to have best CoC Returns in passive income, while the long term gains of appreciation in say 10-15 years, are more of a given. Even though having someone pay your mortgage is great, the short term goal is not just to break even, but to provide highest possible monthly return as well, while those appreciations take place. These "short-term" gains also provide a buffer towards long term sustainability. For example, if I can get 3x more than my mortgage in rent (at fair market value), then I also have more cushion to lower rents and absorb vacancies during downturns, thus ensuring I can keep my properties and long term gains.
Curious, the locations you mentioned ...did others share any numbers to support? I, for example, own properties in Pueblo, CO. Currently get between 10-14% CoC Return (including CapEx) for properties under 200k mark. Highly doubtful I hit the jackpot picking this location so wondering where else in the country can perform better.
Things in Baltimore can be BRRRR and allow most if not all initial capital to be pulled out, I've seen cap rates at 9% plus there in my limited passing glances
Pittsburgh has great investments and tons of BRRR opportunities. Cap rates depending on area go anywhere from 7-14 CAP with most solid investments in the 8-12 range.
2 words: lottery tickets.
I see Jeffrey is a gambler. :)