Tulsa vs Oklahoma city vs Wichita?

Question

I am just starting out and researching areas to invest in SFHs with the BRRR method. I am located in the Denver Metro area and I have narrowed down my search to Wichita, Tulsa and Oklahoma city.  From my research, Oklahoma City seems to have the highest potential for growth and also has the highest rent along with the highest home values.  Tulsa and Wichita seem to have some good deals as well. I am new to real estate investing and obviously looking for a good area that would provide the highest cash flow and the highest forecasted appreciation would be a bonus.  I am starting to analyze deals in these areas but would also like input from anyone familiar with these markets.

Will Fraser · Answer

@Jason Selle to echo a few other contributors here . .  be exceedingly careful in each of these markets.  I refer to OKC as a "pocket city" because you can be on a street of $550k-750k houses (3-5 times the average sale price in the OKC metro) and go ONE STREET in either direction and find only $50k houses.  It's one of the more confusing aspects of buying in our growing markets for outsiders and it is the number one value I can see in having boots on the ground.

I would recommend this: Don't start with the ideal purchase price in mind as your priority when looking in a particular market (like OKC, Tulsa, or Wichita), but rather start with the type of asset (location, tenant type, investment strategy (i.e. appreciation, cash flow, or blended) and then ask, "in light of my strategy and my budget constraint, where is the best location in this market to accomplish those?

Good luck in the journey!

Tracy Streich · Answer

Jason

I am partial to OKC and Tulsa.   They are very close to some other Metro areas like NW Arkansas and Dallas/FT Worth.   Really depends on the class of property you are interested in buying and how much you want to spend.   Suburbs of both OKC and Tulsa area great for A/B properties.   OKC metro and Tulsa Metro have a strong mix of B/C properties.   One of the biggest problems I find with out of state investors wanting to BRRR is they don't really have a reliable option for the renovation portion.   If you are not here making sure it is done right all the time you will likely spend more than you plan.   Plan on adding another 20% to what you think it will cost.  If you are not here you will need to pay someone to make sure they are on it for you and this will eat up that 20% as well.   Good luck

Wanda Wilkinson · Answer

Jason, I’m not familiar with Oklahoma City or Tulsa, but I do invest in Wichita. You definitely have a lot to choose from in the 100.000$ all-in price range. In my opinion you have to be very careful in Wichita with your purchase price and costs of renovation, because a fully renovated small house in a c neighborhood may only sell for 65,000.  WICHITANS LOVE GARAGES!  And fenced yards.

Jason Selle · Answer

Thank you for the information @Tracy Streich.  I am interested in B/C properties and would like to spend a max of $100k including rehab.  Good point regarding managing the rehab remotely.  I will plan to budget extra for the reasons you mention.

Sydney Tiffany · Answer

Hey Jason,

Just coming across your post. Let dont be afraid to reach out if you have any questions about Tulsa. I have a few good connections around town depending on what your investment methods are. Shoot me a message any time :)

Michael Slockers · Answer

@Jason Selle I'm not sure what all your goals are but I think each of those 3 markets could meet a general cash flow and BRRRRR goal....

.... But so could hundreds of other metros...

One suggestion is to either build a team on the ground, spend some time on the ground, or purchase in rent-ready condition. I think managing a purchase/rehab from a distance could be quite a challenge (as a newbie in an unfamiliar market). I do wish you best of luck, feel free to reach out if you need help in Tulsa!

Jason Selle · Answer

@Matt M. Thank you for the feedback.  I did not realize opportunities with that level of cash flow are available here.  I will definitely do more research before writing off this area.  Everything on the MLS seems super high priced and was not working with my analysis but I guess I need to find better off market deals or find a wholesaler.

Matt M. · Answer

I'm from Tulsa and would not invest there. I'm not too excited about the town long term. They are PAYING people to move there... You can still find CF in Denver.

I'm closing on a SFR in Littleton next week. It will CF around $600 per month. I'm using hard money to finance it 100%. I'll fix it up and refi out via a rate and term. My total cash into the deal will be about $20k.

Kiera Underwood · Answer

@Jason Selle then you're in a good place! I can only speak to OKC but with all cash buy and rehab it's doable here with the right people!

Jason Selle · Answer

@Joe Massey The reason I am looking out of state is for cash flow.  I may be wrong but I have been under the impression that decent cash flow in a SFH is not realistic in the Front Range due to high house prices.  The other reason I am looking out of state is that I can pay all cash for the purchase price and rehab up to $100k and that $100K would not get me far near Denver.  I am new to this so definitely open to taking advice.

I checked out @Chris Lopez website and lots of great info there.  I will look into the classes and webinars.  Thanks for the suggestion!

Tulsa vs Oklahoma city vs Wichita?

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