BEST MARKET FOR A $500K MULTI FAMILY

Buying & Selling Real Estate
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BEST MARKET FOR A $500K MULTI FAMILY

Mansoor Fazel
Rental Property Investor · Fremont, CA · Member since 2015 · 67 posts · 30 votes

Hey everyone!

So I am in an exciting part of my real estate journey. I am about to sell my first property. I own over 10 doors, but have never sold one before. I have one that has appreciated substantially over the last 2 years and feel that its time to sell since I don't feel that market has much more room to grow and personally expect a crash ( in California ).  I am 1031 exchanging to a new property, but need to locate one. I have my "team" looking in the markets that I am already in, but I am sure there are other markets where there are great opportunities that I could be missing out on. I would love to hear from any of the experienced investors who are finding cash flowing properties in the multi family \ apartment arena. What markets are you buying in? What kind of returns do you expect on these deals ? Are you buying off market? Any advice on how to find the best deal is greatly appreciated.

Also, this is my first apartment purchase, so ANY advice is greatly appreaciated. Cant wait to hear from you guys! Thanks!

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Sam Newell
Real Estate Agent · Lehi, UT · Member since 2016 · 136 posts · 91 votes
9y

@Mansoor Fazel I really like the Boise market as well as the Salt Lake City area.  With thousands of new jobs, a housing shortage, and large influx of people, the Salk Lake greater metro area is a fantastic place to buy.  I have purchased two propeties this year, one in Lehi, UT and one in Saratoga Springs, UT (both 30 minutes from downtonw Salt Lake).  They are calling Lehi, Ut the "Silicone Slopes" because of all the big companies like Adobe, Amazon, Xactware, Domo etc moving there and bringing other tech companies with them.  Boise is similar, lower cost of living, lots of new jobs and a growing population.  We have a few pocket listings (I'm an agent) that are brand new and in great locations.  I'm also buying a fourplex that FIG is building in Boise, so both areas are great in my book.

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  • Mansoor Fazel
    OP
    Rental Property Investor · Fremont, CA · Member since 2015 · 67 posts · 30 votes
    9y

    SOME MARKETS I HAVE ALREADY CONSIDERED INCLUDE:

    BOISE, IDAHO

    CLEVELAND, OHIO

    KANSAS CITY, MO

    DALLAS METRO

    2Reply
  • Sam Newell
    Real Estate Agent · Lehi, UT · Member since 2016 · 136 posts · 91 votes
    9y

    @Mansoor Fazel I really like the Boise market as well as the Salt Lake City area.  With thousands of new jobs, a housing shortage, and large influx of people, the Salk Lake greater metro area is a fantastic place to buy.  I have purchased two propeties this year, one in Lehi, UT and one in Saratoga Springs, UT (both 30 minutes from downtonw Salt Lake).  They are calling Lehi, Ut the "Silicone Slopes" because of all the big companies like Adobe, Amazon, Xactware, Domo etc moving there and bringing other tech companies with them.  Boise is similar, lower cost of living, lots of new jobs and a growing population.  We have a few pocket listings (I'm an agent) that are brand new and in great locations.  I'm also buying a fourplex that FIG is building in Boise, so both areas are great in my book.

    2Reply
  • Don SpaffordPro Member
    Investor · Idaho Falls, ID · Member since 2016 · 935 posts · 629 votes
    9y

    @Mansoor Fazel East Idaho is still a good bet for me as well. Large and growing student populations between Pocatello (Idaho State U) and Rexburg (BYU-Idaho). My wife is an agent here and could help as well. I recently was looking at a few medium-large complex opportunities that I was trying to partner with an outside investor but then he just "disappeared" and stopped responding. There was an amazing opportunity recently here in downtown Idaho Falls to turn a run down hotel into a 22 unit loft building. I was trying to acquire an experienced person to help with that but in the process it got snatched up by somebody else that did exactly what I was planning. Average cap rates in this area, after expenses, are between the 7-9 range, some can get a bit higher, up to 12 I've seen but they go fast. I recently bought a 4 plex that had below market rents and since increasing rents with no problem, the cap rate is at 9%, COC at 32% because I got it with 10% down. I'd be glad to help in this area.

    0Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    Look for markets with good job growth and also housing affordability. I like: 

    Indianapolis, Oklahoma City, Tulsa, OK, Much of North and South Carolina, Savannah, Columbus, OH, Cincinnati, St Louis

    2Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    9y
    Originally posted by @Todd Dexheimer:

    Look for markets with good job growth and also housing affordability. I like: 

    Indianapolis, Oklahoma City, Tulsa, OK, Much of North and South Carolina, Savannah, Columbus, OH, Cincinnati, St Louis

     Great point, we have multifamily properties between 10 and 25 units here for $500k in columbus / central oh

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
    WebsiteView Page
    0Reply
  • Caleb Coblentz
    Real Estate Agent · Murrells Inlet, SC · Member since 2017 · 55 posts · 16 votes
    9y
    Charleston has great job growth, some of the areas outside of Charleston are still affordable. I'm in the Myrtle Beach area. Job growth is good but we also have a growing college campus.
    0Reply
  • Roland S.Pro Member
    Investor · Bethany, OK · Member since 2014 · 31 posts · 23 votes
    9y

    https://www.forbes.com/sites/samanthasharf/2017/01...

    405-455-8320
    0Reply
  • David Faulkner
    Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
    9y
    Originally posted by @Mansoor Fazel:

    SOME MARKETS I HAVE ALREADY CONSIDERED INCLUDE:

    BOISE, IDAHO

    CLEVELAND, OHIO

    KANSAS CITY, MO

    DALLAS METRO

    If you expect CA to crash, then what makes you think the above markets won't also crash? Have not investor dollars been flowing into them at an accelerated pace as well? Because they are cheaper? Have they not always been cheaper? Why are they cheaper? How well do you know these markets? If you don't know them very well, then how will you realistically expect to learn them well when they are so far away? Google? Opinions on BP, many from people trying to sell product or services in these markets? Some random articles? Just a few questions that come to my mind ...

    0Reply
  • Mansoor Fazel
    OP
    Rental Property Investor · Fremont, CA · Member since 2015 · 67 posts · 30 votes
    9y
    David Faulkner well there are so many things I can say to answer your questions. Let me do my best but I am on my phone on the way to the airport so bare with me. 1. My investment is into multi family property. In the past, when the housing market dips, the rental market will see an increase, so a crash would result in more people who need to rent, since they can't buy ( can't get loans or values for their home have gone down ) 2. He crashes don't affect markets equally. If we see a crash in the tech industry, how bad do you think that will affect Kansas ? Also, because the prices are so low, if we see a 30% dip in prices across America. That means a $300,000 loss in the Bay Area where old mom and pop homes are $1,000,000 or more. But for a home that's only $50k or $100k that's only a $15/30k loss. 3. I own property now in Dallas and Kansas. I have taken time to study the area, the markets the job growth and demographics. I have flown out there and am comfortably familiar with the housing markets there. I wouldn't buy blind just cause everyone else is doing it. I justify my investments by my research. I don't have to live in a community to understand why the prices are what they are 4. Buying in lower markets is a form of loss mitigation. I reduce my risk by buying homes I can offer for rent for as low as $700 a month. When I am paying more than 4-5 times that for my own place. But in the end it's a numbers game. I still cash flow very well in these markets, and that's why I make the investments I make. "Live where you want, but where the numbers make sense" Ultimately, even the crash I expect to happen will only be a blip in the grand scale and as a long term investor I am aware of that. But I want to be in a position to maximize my opportunity based on my research. I hope this helps explain my ideology.
    3Reply
  • Troy GandeeBusiness Member
    Real Estate Broker · Charleston, SC · Member since 2013 · 795 posts · 454 votes
    9y

    The commercial multifamily market here is pretty tough in Charleston SC. Prices are quite high for anything in the immediate Charleston Metro area. They can be found, but they sell very quickly.

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    9y
    Originally posted by @Mansoor Fazel:

    David Faulkner well there are so many things I can say to answer your questions. Let me do my best but I am on my phone on the way to the airport so bare with me.

    1. My investment is into multi family property. In the past, when the housing market dips, the rental market will see an increase, so a crash would result in more people who need to rent, since they can't buy ( can't get loans or values for their home have gone down )

    2. He crashes don't affect markets equally. If we see a crash in the tech industry, how bad do you think that will affect Kansas ? Also, because the prices are so low, if we see a 30% dip in prices across America. That means a $300,000 loss in the Bay Area where old mom and pop homes are $1,000,000 or more. But for a home that's only $50k or $100k that's only a $15/30k loss.

    3. I own property now in Dallas and Kansas. I have taken time to study the area, the markets the job growth and demographics. I have flown out there and am comfortably familiar with the housing markets there. I wouldn't buy blind just cause everyone else is doing it. I justify my investments by my research. I don't have to live in a community to understand why the prices are what they are

    4. Buying in lower markets is a form of loss mitigation. I reduce my risk by buying homes I can offer for rent for as low as $700 a month. When I am paying more than 4-5 times that for my own place. But in the end it's a numbers game. I still cash flow very well in these markets, and that's why I make the investments I make. "Live where you want, but where the numbers make sense"

    Ultimately, even the crash I expect to happen will only be a blip in the grand scale and as a long term investor I am aware of that. But I want to be in a position to maximize my opportunity based on my research.

    I hope this helps explain my ideology.

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    9y

    That sounds reasonable. Bakersfield seems to have some multi opps whenever I check.

    Here is a good video of Grant Cardone shopping for multis in Houston. 

    https://youtu.be/aF-1iyaj6AQ

    0Reply
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