Where should I buy?
Real Estate Investor · Seattle, WA · Member since 2015 · 11 posts · 3 votes
Hi all,
I am an entry level investor (own my house with a mother-in-law) and am looking to buy my first true rental property. Since I live in Seattle, where prices are crazy, I am looking out of state.
Currently, I have about $50k for a down payment and have been looking in Atlanta, Indianapolis and Philadelphia. It seems all the good deals in Philly are in bad areas, Atlanta is not as good as it was a year ago, but Indy looks pretty good.
Would appreciate any input from others who are investing out of state or who have an idea as to what markets are safe but will still cash flow. This is a pretty big step for me, but I am ready to take the plunge. Also interested if people have input on how to manage out of state property - figure I need property management/yard maintenance. Thanks!
Peter
Welcome Peter.
A caveat: I'm new to this myself having just bought my first property in Philadelphia. I'm a New Yorker and moved here a month ago, but I feel I got to know some areas pretty well through my house search. I was also considering just being a passive out of state investor.
As to the question of where to buy, I second the endorsement for South Philly close to Broad. The deals are better on the west side but the neighborhoods are more of a mixed bag. Very much a block by block situation as described above. I'm bullish on this area mostly because I think it's such a great neighborhood myself, and just expect people to realize that as prices push them farther south. That said, I'm a little daunted by the successive, seemingly eternal 'For rent' signs on some of my neighbors houses.
I think Port Richmond is another good spot for buy and hold investing. The property value won't appreciate as fast as some other areas, but the buy in prices are reasonable and it's a pretty safe, stable area. It's less block by block than South Philly. The area from Aramingo to the river is safe. I haven't made an exhaustive study, but I think you could get solid returns there and its adjacent to Fishtown, where people are getting priced out.
For speculative buying, Brewerytown seems like a good bet especially if you find a deal along Girard Ave.
As to investing remotely, all the cities you mentioned have plentiful offerings through turnkey companies. The site Hipster Investments aggregates deals from different companies. They like Chicago a lot, but feature several offerings in Philly and Indianapolis. The prices seem competitive and you don't have to worry as much about the quality of the neighborhood because when you buy from a turnkey company you also buy a management company.
To get a feel for an area without visiting it, I find the maps on Trulia really useful regarding crime, commuting times and area businesses.
I'm probably way to new to this to be offering this much advice and welcome corrections from more seasoned investors.
Notice @Steven Gesis didn't mention the Cleveland Indians or Cleveland Browns.
Alex, you are correct, they are not notable at this time, hey, we cannot have it all, however we do have (3) major sports teams. As you did notice I am certain I did mention the Cavs.
I am true Clevelander and it has been absolutely amazing to be a part of this Renaissance, I can take a few on the chin when it pertains to our sports teams. We have them and we are proud of what we have :)
If you happened to watch the Monday night Football game you would have seen something, I think no one has ever see before, is watching the Cleveland Browns have a blocked field goal, with a return to the house by Baltimore (the former Cleveland Browns) for a loss with 0.00 seconds to play, this was not notable in-fact embracing.
Come tour us and come check out our awesome spaces, I think even though the some of our teams were not notable still a great time at any one of those stadiums.
#TeamTurnkey
As mentioned @Peter Nierman by @Justin Ericsson flying out to those markets and finding some reputable turn-key providers can go along way.
When looking for a market to invest in its best to look for:
1) Landlord/business friendly
2) Job Growth
3) Population Growth
4) Steady appreciation in property values
5) Affordability(personal preference)
6) Macroeconomics
Hope that helps
Peter
i would recommend flying out to meet 3 turkey operators in the markets you like. This will give you a wealth of information to narrow down your decision.
Peter-
Excellent recommendation, I think meeting the people / operators in the respected markets half the battle, this way you can get a real feel for who they are and their operation. Not only meet but see what they do and how they do it, check out the city, learn about the local history and economic conditions.
Hi Peter
I closed recently on my first out of state property. When I first started looking I was focusing on what were the areas I may want to invest in. What it turned out to be for me was not where to invest but with who to invest. It is truly about being comfortable with your turnkey provider and trusting that they know what the good and not so good areas are. If you are going to go the turnkey route talk to different providers but make sure you have a conversation with Alex and Jeremy at Memphis Turnkey Properties. So far I'm very pleased with this partnership.
Marty, first and foremost congratulations on taking the plunge! Im certain if you have a good experience now, you will continue building your wealth and portfolio. Great advice, eating the operator is hyper critical, you want to see these people, the office they have, the support staff in place, physically see the area and the homes. We have experience with clients that never visit us during their first acquisition, but eventually travel to see us. On the other hand I would say over 70% of our clients do come and visit and want to see the physical home, the process form A-Z, we encourage it and I encourage investors on BP especially first time investors, put boots on the ground, visit the operator and be intrusive.
#TeamTurnkey
@Steven Gesis I was just yanking your chain; no I didn't see that. I simple could not bring myself to watch that game, but I did see it on Sports Center. Looks like it is Manziel back to being the stater...what a knucklehead he is. I have been to Cleveland before, saw the Indians play the Yankees; great town.
Hi Steve, Thank you! You are right and I know it's important to go visit and interview the different providers and the areas. I did not for my first purchase but I will before what I hope is many more.
@Steven Gesis I was just yanking your chain; no I didn't see that. I simple could not bring myself to watch that game, but I did see it on Sports Center. Looks like it is Manziel back to being the stater...what a knucklehead he is. I have been to Cleveland before, saw the Indians play the Yankees; great town.
Lol, I know, I was just giving Cleveland some moral support :)
Looks like Johnny is back, hope he keeps his nose clean, we will see , I think he will be our 25+ QB in the past 10 yrs. its sick! Happy to hear that, I don't know when you were here last, I would say its worth checking us out now and seeing all the amazing things going on around town, we are a whole new city in every corner and every aspect.
Hi Steve, Thank you! You are right and I know it's important to go visit and interview the different providers and the areas. I did not for my first purchase but I will before what I hope is many more.
Yes, sounds like you have a descent experience not a stellar one, sometimes you need to crawl before you can walk and with experience you begin to see how important the operator is to the sustainability and viability of your asset. I truly believe the management is the glue that keeps it together, so you want an operator who can give you that in one package. We hear the horror stories everyday here. We actually existed our retail property division in April to a national vendor, this department would take on any homeowner but not any property we were selective, but we were constantly battling massive overhead cost due to the unique qualities and building found at every site, being scattered site with over 700+ doors under management was super complex and required a lot of staff. Now, we do things differently after we exited this company, we exclusively manage assets for our investors that acquire direct from us, we will not take on any outside portfolios, the reason why we do this is that we can control the entire process and place systems that allow us to reduce the administrative burdens commonly associated with management companies. Through our uniform construction material and methodology process, we are able to mitigate lots of risk to the owners, ourselves and tenants, plus we know and the investor knows exactly what goes into the property and why, we can control materials and implement resilient products throughout, everything from paint, flooring, sinks, light fixtures, tile, furnace to hot water heater. Not only are we bringing the homes to a specific high quality standard, which allows us to provide a warranty with the property for maintenance, but the long term and short term maintenance is mitigated by/through the implementation of uniform resilient product lines. I think actually seeing and meeting the operator you intend on working with and seeing the product goes along way in building/forging good long term relationships.
@Marty Bosse and@Justin Ericsson - are there any turnkey providers you would suggest?
I suggest that you give Alex Craig a call at Memphis Turnkey Properties. Of coarse do your due diligence and talk to others as well. They are full service if that is a proper term for what they do. They buy, rehab and provide the property management. My experience with them so far has been as good as I hoped it could be. If I can say one more thing...I lurked around BP for a good 8 or 9 months and was suffering big time with analysis paralysis. If your ready to go talk to some providers and get started. Good luck!!
Also interested if people have input on how to manage out of state property - figure I need property management/yard maintenance. Thanks!
We invest in & out of state. Consider establishing relationships w/ local Property preservation companies along w/ property management as you explore investing out of state.
Notice @Steven Gesis didn't mention the Cleveland Indians or Cleveland Browns.
Didn't mention the NHL Barons ... oh, they folded, maybe that's why ;)
http://mweb.cbssports.com/nhl/eye-on-hockey/228142...
I work at Temple University regularly. I can say first hand that properties around the university and the hospital are only blocks apart, but might as well be worlds apart. I would never leave my car parked around the hospital, but I park on the main campus all of the time and feel totally safe in that area.
Notice @Steven Gesis didn't mention the Cleveland Indians or Cleveland Browns.
Didn't mention the NHL Barons ... oh, they folded, maybe that's why ;)
http://mweb.cbssports.com/nhl/eye-on-hockey/228142...
Steve, do not have a lot of 1970's NHL Hickey knowledge, however, looks to me like we had at one point (4) major sports teams :) The article references cult like followings of major Hockey Teams and Cleveland got a little beat up in this 2013 article.
Do not forgot about our Arena Football League - Cleveland Gladiators
Why not throw in our current American Hockey League - Lake Erie Monster
So much for 2013 and the 70's, the next frontier in Cleveland is something unlike anything else before. We welcome you and look forward to hosting you in the remarkable space, come relax, live, laugh and enjoy the renaissance for yourself.
CLE