Uncommited and looking for great markets to move to for investing

9 Replies

I am Single, I work from home on the computer, and I want to start investing.  I want to pick up and move to a great market for a year to learn it well.

So how do I find and identify good markets?

I discovered that Indiana has a great combination of affordable homes\taxes\and landlord laws, but I heard that Baltimore has a high rent/value ratio ( ~2% rule as of last year ). These are my top choices as of now, but I really don't know where else I might look. I don't even know how to determine where to look.

I'm hoping someone can make some suggestions for good markets. My primary interest is cashflow.

Also, I'm hoping someone can advise me.. : How do I find markets?  - Please share: how do you identify and research markets?

Thanks you

If anyone is interested, I did a search for this, and found some articles.  It seems aimed at traditional buyers/investors with available stats etc..

I don't know if these will be useful to anyone here, but here are some links:

https://www.forbes.com/sites/ingowinzer/2019/01/07...

https://www.realwealthnetwork.com/learn/best-place...

https://www.forbes.com/sites/amydobson/2019/02/11/...

Hope someone finds this useful..

@George Lambrakis I personally invest here in baltimore and I completed my first small multifam deal this past december.  Baltimore can be tricky from afar. You'll find lucrative prices for properties but they may come with liabilities you may not be interested in dealing with using sites like zillow, trulia etc truly don't give an accurate representation of the product you're buying. Although I personally live closer to DC, I took @Ned Carey 's (a heavy hitter here in baltimore) advice and spent most my weekends driving the streets in baltimore with a map and marking areas and neighborhood I felt comfortable with.  I feel this market is a great place to be personally but understanding values fluctuate street by street can make things a little tricky.

Good Luck!

-Solo

@Solomon Morris

Thanks Solomon, I appreciate the insight. Baltimore is near the top of my list. I will definitely move to the market I choose. I plan on doing something similar to your driving with a map.

The idea of one block to the next being so different make me want to research more.

Thanks

Originally posted by @George Lambrakis :

I am Single, I work from home on the computer, and I want to start investing.  I want to pick up and move to a great market for a year to learn it well.

So how do I find and identify good markets?

I discovered that Indiana has a great combination of affordable homes\taxes\and landlord laws, but I heard that Baltimore has a high rent/value ratio ( ~2% rule as of last year ). These are my top choices as of now, but I really don't know where else I might look. I don't even know how to determine where to look.

I'm hoping someone can make some suggestions for good markets. My primary interest is cashflow.

Also, I'm hoping someone can advise me.. : How do I find markets?  - Please share: how do you identify and research markets?

Thanks you

 Tons of turnkey markets out there. Many are well represented by sellers & turnkey operators here on BiggerPockets. The most popular markets are

  • Cleveland
  • Toledo
  • Memphis
  • Birmingham
  • KC
  • Indy
  • Detroit

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.

One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • 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, Thank you for that. It was the reply I was hoping for!

Yes, I am considering out of state investing, I am in the middle of David Greene's book at the moment.

I appreciate your advice on long distance investing! I will definitely heed the advice.  I think the solid B-class as a first home is probably good advice for someone getting started.

Thank you!

Been in Baltimore now for 77 years --- I know people who have made a ton of equity profits here --- but you need to be selective on the properties you make offers on --- you should always ask for seller assisted financing - you should be positively sure of how much equity you are buying - and don't be shy about saying "NO WAY! If the deal ain't right for you walk away - don't be influenced by anyone ---- if it is NOT a good deal - walk - skip or run -----  there will be plenty more deals coming your way.

Oh! On seller financing -

  • always ask for a principal mortgage (that is a mortgage without interest)
  • build in a first right of refusal in the event the seller wants to sell the mortgage at a discount - mortgagee needs to offer it to you.
  • Build in a mortgage discount in the event you sell or re-fi
  • always know the seller's mortgage balance - "possible to buy subject to", why pay off a good mortgage when you can take over the existing mortgage.
  • Be definitely sure of what your exit strategy is - to flip/assign. fit and flip, to hold
  • you need to know this before you make an offer - mortgage balance, current or in the arrears, payments, housing code violations, who is on the deed, what are the issues (needed repairs) - how long has the tenant been there, a copy of their rental ledger.
  • how long has the building been on the market ? Why hasn't it sold?
  • Always offer below what you were going to offer and less than the asking price.
  • Ask for cash back at settlement
  • Ask for grantees that will survive closing  (like the heating systems and roof).
  • Ask for a study period in your offer - this will give you time to find reason to do a second stage negotiations.
  • Talk to someone with more experience than yourself - ask for help
  • Be conservative - the seller is NOT your friend - you are in this game to make money, not to help a seller feel good!
  • You are a buyer - you can make the seller's problems go away - don't sell yourself - be firm in your thinking and your negotiating.
  • Use a "skinny Contract of sale"
  • You are the CEO of your company - it is up to you to make the right decisions or regret the ones you've made.

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