Where to invest? Tallahassee, Jacksonville, Atlanta, Midwest?

[Patrick V.]

Hey all! 

I live in Seattle, Washington and have a small house hack here. I want to pick up some cash flowing rentals and have accepted that the region I live in does not have many properties that cash flow very well. My current full time job is full remote so I am planning on identifying an area to invest in and spending a few months out there to find, purchase, rehab and rent properties. 

I lived in Tallahassee, FL for many years and have a good friend who does quite well with college rentals out there and is a property manager I trust. I know the market, have a network and the location has good cash flow and growth prospects. The down side is college housing, so more property damage and turn over and reliance on the future prosperity of the university which I think is a pretty safe bet. 

That being said I came across the list of top locations to invest based on cashflow and appreciation forecast: 

https://www.realwealthnetwork.... and started reconsidering to look in the Atlanta or Jacksonville area instead (I like the idea of sticking around the SE since I have a network in the area).

Any thoughts on the above markets? Where would you invest if it didn't have to be local? We are moving out of Seattle into an RV so will be transient for the coming future so everything is 'out of state' investing since we will be always on the move. 

I am looking to invest around $500,000 after financing and cash flow is my main focus but of course in an area with stable growth and appreciation. Value add multifamily is generally what I am looking for but could be convinced otherwise. 

Thank you for any tips and suggestions! 

[Gregg Cohen]

@Patrick V. .  The reason investors come to Jacksonville is because you get both positive cash and above-average home price appreciation.  Most markets across the country that give you positive cash flow will be below the national average when it comes to historical appreciation.  This is especially important if you are planning to buy and hold for a full market cycle or longer (10-20 years.)  

Many investors choose to ignore home price appreciation but I think that's a mistake.  The reason is because home price appreciation rates tend to repeat themselves in a given market over a full market cycle.  If you know what your historical home price appreciation rate is and you plan to hold on for 10-20 years or more, chances are that you going to experience similar home price appreciation.

When you factor in both positive cash flow and home price appreciation, you'll find that not all markets are created equal.  For example, Cleveland, OH has appreciated at a rate of 2.3% per year on average since 1991.  Jacksonville has appreciated at a rate of 4.3% per year during that time.  The investor who purchased his/her rental properties in Cleveland missed out on hundreds of thousands of dollars in return from home price appreciation.

I'd suggest looking up the historical home price appreciation rates in the markets you're considering and factoring that into the equation (assuming you are buying and holding for a full market cycle.)  You can do this by going to the Federal Housing Finance Agency website - www.fhfa.gov.  Make sure the market offers positive cash flow first but then look into home price appreciation to make your final decision.

Hope this helps.