Market Analysis Help

24 Replies

Hi everyone,

I’m currently doing an analysis on what market to begin investing in. I have four and obviously I want to pick just one to invest in (at least to start). My options I’ve narrowed down are:

Oklahoma City

Lansing, MI

Davenport, IA (Quad Cities)

Milwaukee

Any input on any of these markets would be greatly appreciated. If you are currently in one of these markets, I’d love to connect and hear your thoughts on your market!

Like most of the country, Oklahoma City is a hot market right now. But there are still deals in SFH and MFH that will meet that 1% rule. They are just more rare now than a few years ago. Oklahoma City, historically, is a stable, linear market. Economy runs primarily on oil and gas but is much more diverse now than a generation ago

@Nick Meland Congrats on starting in Real Estate! Lansing is a great spot for affordability and cash flow. Rents are steadily going up and the market here is very easy for new investors to get started in. Out-of-State investing is MUCH easier than most think. 

I'd love to chat with you and maybe even run through some real world examples of current listings. 

If you go into Lansing I can hook you up with a great guy. I went to school at MSU. It's a growing area!

@Nick Meland I own properties in Milwaukee (3x SFH) and OKC (1x duplex). I purchased the 3 Milwaukee properties from a trusted turnkey provider (@Stuart Grazier with Storehouse 3:10 Ventures) and the OKC duplex was my first BRRRR.

Both markets are hot for investors and non-investors alike right now, so finding deals will likely be your biggest challenge. I'm happy to chat more if you'd like.

@Nick Meland I’m a quad cities-focused investor. Davenport has high rent demand thanks to a lot of blue-collar jobs (Purina is a big one, Amazon is also building a new distribution center) and students (Palmer College - top chiropractic school in the country). There are a lot of older homes that you can buy relatively cheaply with high rent, but you won’t get a lot of appreciation (figure 2% or less per year). On the other hand, it’s fairly recession-proof, so you’re unlikely to get wild swings down, too. 


if cash flow is your primary goal (which is mine), it’s a great place with a lot of possibilities. If you’re after appreciation, it’s best to look elsewhere. 

I've had a duplex in Lansing for 3.5 years. It was my first property and it has worked out well. I did the rehab myself and also self managed, which made it a success. Had I contracted out the rehab and hired a PM, it still would have been OK, but not great. Two things to really vet if you're going into Lansing are property age/deferred maintenance, and the quality of the neighborhood. The housing stock is old and tired and may need significant cap ex, including plumbing or electrical upgrades. And there are definite pockets that are better neighborhoods than others. I don't have a good feel for evaluating that aspect, other than drive and walk the neighborhood day and night and on weekdays and weekends to see what the activity is like. The neighborhood characteristics will dictate the quality of tenant you can attract and rents you can command. If you do your homework, Lansing can be good for cash flow with fairly low initial investment. That being said, I'm selling my duplex and buying a 4 plex in a different area where I already have a 10 plex, consolidating into one area. There don't seem to be as many larger MF asset opportunities in Lansing.

@Steve Majors I appreciate all the advice on the Lansing area, Steve! Sounds like if a strong due diligence and careful selection take place, there’s some solid cash flow to be had. Have you heard of anyone doing student rentals near MSU? I’m curious as I see that as a big factor if I will choose Lansing or not.

I don't know anyone doing student rentals. MSU is in East Lansing, which is a different municipality than the City of Lansing. The City of Lansing is where the majority of the lower entry deals are. I've heard East Lansing is very stringent on rentals and prices are certainly higher. These are definitely two different markets even though they are right next to each other.

In lansing, taxes are high and code compliance is a bear. Neighborhoods change block by block and there really isn't a bad side of town. Don't be discouraged, you can do well here. 

I have student rentals on the east side of Lansing, but I'm scared of East Lansing. 

I probably choose a different market, but I am here and so is my crew. We are actively Brrr-ing. 

I'd be happy to share more with you. 

Lansing and easy lansing have code compliance, which makes this business more difficult and costs more up front and over time.  If I had to start over, I wouldn't touch either one for rentals.  Lansing is a good city overall, but the costs and headaches often associated with this particular business are something to really consider, especially since you're not currently tied to it in any way.  I researched OKC many years ago and recommended it, and I'd stick by that, unless of course they've instituted their own restrictive rental code

True code compliance exists, and can be a hurdle. Inspections are every 2-3 years but the past 2 inspections I had on my property were pretty easy. If you keep up on maintenance and cap ex it's not bad. The old housing stock in Lansing can make predicting cap ex tricky. Watch out for outdated electrical and plumbing. As for higher taxes, that's one reason values are low. You just need to factor it into your OpEx. I can connect you with a great realtor if you're interested. 

Originally posted by @Nick Meland :

Hi everyone,

I’m currently doing an analysis on what market to begin investing in. I have four and obviously I want to pick just one to invest in (at least to start). My options I’ve narrowed down are:

Oklahoma City

Lansing, MI

Davenport, IA (Quad Cities)

Milwaukee

Any input on any of these markets would be greatly appreciated. If you are currently in one of these markets, I’d love to connect and hear your thoughts on your market!

Curious ... what are your thoughts on your local market (M/SP)?

Less travel, easily viewable / accessible, ... Public records are mostly on-line now. So, you can research properties easily, relatively speaking ...

@David Dachtera the MSP market is hot just like every other market across the country. I have done a lot of research into the areas and know what the neighborhoods are like here. For me and my goals, the MSP market is just a little too expensive and it's not a landlord friendly as some other markets I'm exploring. It's not to say I won't ever invest here but starting out I think I will look elsewhere.

I think new investors get way too caught up in this market vs that market. What really matters is WHAT you and HOW you buy in a particular market.