I recently moved from Panama City, Fl. to San Diego, Ca.   The real estate dynamic is completely different in Southern California so I am forcing myself to learn market research across the country. I am interested in the Top Three markets any of you are researching right now and why?  Here are my top three:

1.) Panama City, Fl. - Because I am familiar with the area and have a great team of agents, managers, cleaners, and contractors. Problem is, Panama City's market has grown exponentially over the past three years and deals are hard to come by (as I am sure is the case in most cities).

2.) Asheville, NC.  and surrounding areas - I simply love this city. One of my favorite places to visit, so therefor it is a place I would consider retiring. I have 8 years left in the Navy and want to hang up the flip flops and lace up my hiking boots. Asheville is another city that seems to have out priced itself however the surrounding areas have a decent amount of multi family homes. Asheville has a very large shortage of long term rentals, which is great for a landlord, however it has driven prices sky high any where near downtown. If I were to purchase in Asheville, I believe it would be in the surrounding area vs. downtown.

3.) Tucson, Az. - This is simply based on proximity to San Diego. Tucson seems to have ALOT of multi family and I have read articles that claim/prove that Tucson follows the Phoenix rental market. Phoenix has risen over the past three years and Tucson is showing signs of doing the same however the prices are still low. My concern with Tucson is the amount of MF I see for sale. This makes me wonder if vacancy rates are high and the Multi Family space is competitive. 

Essentially my top three are based on - A place I lived, a place I would like to live, and a place close to where I currently live. I am trying to break this mindset and invest in markets that make since financially, rather than proximity.  

Please participate in this conversation regardless of your experience, or even if you don't have three Markets.

Ramsey

I think that approach is as good as any. Familiarity with your market (assuming generally positive demographics / job growth) and really understanding it is more important than finding the 1 where all indicators perfectly.

I know panama city well too.  I actually just sold Cottages by the bay, a 70 unit community off of thomas drive in the beach area a couple months ago.  Really like the market but, agreed there is only so much supply on the MF side.  

Love Asheville too.  Also, limited supply for multifamily.  

I like the thought process of Tucson with its proximity to where you currently are.  The southwest as a whole has gotten a lot of attention with a lot of Tech support jobs moving south b/c of a size-able employee pool and much more affordability.

I don't think there is a right answer market wise but, I would say to focus on purchasing with relative value in a strong submarket.  

@Ramsey Blankenship I've lived in Asheville for 12 years and have been investing here for around 5 or 6.  I've slowly been liquidating my property here to buy elsewhere though.  You are right about prices being high around downtown, but outlying areas have also started picking up in the last few years.  I'd say there are no "deals" within 45 mins or more from Asheville.  I know a lot of investors around here, and most have moved into completely different markets, or they are buying raw land and building for resale.  I'd say this market is tapped out, unless you just have a load of cash you are looking to park somewhere.  Now that the cat is out of the bag about Asheville, most people are coming in and buying single family, multifamily, and commercial with cash as a place to park their money, enjoying some monthly income while they hope for more appreciation.

Thanks for the response guys! What are the markets you are researching outside of these? 

While I can't vouch for the accuracy, when I'm interested in vacancy rates, I look at www.BestPlaces.net.  According to them, Tucson has a 12% vacancy rate (and 44% of the population as renters).  https://www.bestplaces.net/housing/city/arizona/tu...

Places I invest in or am interested in investing in include:

1.  Auburn, AL because it's my hometown, I'm familiar with it, the university probably isn't going anywhere, if you're patient, you can find a deal, during the real estate downturn, Auburn was one of only like 15 or so cities where the property values still went up (at least one year--there was an article about it lol), nearly 50% of the population are renters, and the list goes on.  I'm buying my 4th property next week.  :-D

2.  Raleigh, NC because it has multiple draws (state capital, part of the tech triangle, and NC State), home appreciation is up nearly 20 percent in the last 10 years (is that a plus or a minus...I'm not sure lol), renters make up almost 43% of the population and vacancy is only 9%.  Most importantly, I'm in Asheville and it's not too far away.  Crime is higher than I'd like, but it's not completely insane, just higher than the national average.  I've been told it's a really tough market and there is a lot of competition, so we will see how that goes.  It's also not the cheapest market I could find, but I'm going to give it a try.  I've found a couple of agents/PMs to interview, but I'm open to suggestions for both agents and property managers, if anyone has any.

3.  Fort Collins, CO is actually my  #1 choice, except for the distance from me (and to some extent, the cost).  Unemployment is only 3.3%.  Nearly 44% of the population rents and the vacancy rate is less than 4%.  Home appreciation is over 31%...again, is that good or bad?  It's also just beautiful there.  While property crime is slightly above average, the violent crime is significantly below average.  (And property crime in Ft. Collins is the lowest of the 3 locations.)  I just love Fort Collins.  Perhaps I'll move there one of these days.  :-)

@Jody Schnurrenberger I am also looking in the Raleigh NC area. Great renters and high cash flow potential!

Though I haven't met them in person, @Tiffany Alexy and @Dawn Brenengen both seem cool online if you need an agent, @David Carbajal .

Amazing research, @Jody Schnurrenberger . Well done.  :)

@Ramsey Blankenship

You should look at the 2018 Realtor.com top 100 cities forecast............... based on sales and price growth.

https://www.biggerpockets.com/forums/48/topics/513...

Terry

https://research.realtor.com/2018-national-housing...

@David Carbajal where did you get high cash flow potential in raleigh from?! I guess compared to a lot of CA it may be, but most investors pass on by when they see .7-.8 of purchase for rents unless in the rougher areas. Of course there is always the potential for more, but it’s not everyday. We picked up 2 this year, but they were flip potential (our main business) and need 80-120k rehabs. most out-of-area/state investors don’t want to pull off that kind of rehab to rent a place out just to get to 1-1.2% 

@Ramsey Blankenship

Since you are in San Diego now, which is ranked #47, you need to consider locally.

However, starting with top 3 is not that bad.

Terry

Top 100 Largest U.S. Metros Ranked by Forecasted 2018 Sales and Price Growth

@Jody Schnurrenberger Thank you for answering the question. It sounds like your reasoning is very similar to mine. One place because a familiarity, another because of proximity, and the last out of love for the area. 

@Terry Lao Thank you for that list. I am investing for cash-flow and I know many of the cities on that list are near impossible to find a decent cashflow. I Invest in Multi-Family properties and I am assuming this list from Realtor is describing sales and prices projected to be driven upwards because of an influx of home buyers. 

Thanks for the posts guys! please, if you have commented on this thread, I would love to hear the markets you are researching.

I think its important to identify/understand what you want to accomplish with your investment. Are you simply trying to make a few $$ from a future retirement home, are you wanting to create passive income or are you looking to flip properties. If you are looking to buy and hold for passive income then there are a number of things you should consider. Unemployment, what is driving the employment in the area (big industry is key), what is the income to affordability ratio, how does the single family market look (strong, higher value SFR means more people have to rent), what are the current/future rent forecast in the area, what is the crime in the area, vacancy rate and the building industry/growth (saturation in your property class can be an issue). These are a pretty decent start to helping you determine if the demographic will support your overall goal/strategy. Unless you are looking for a future retirement home for yourself, try not to let emotion drive your decisions. Determine what you want to accomplish, gather the tools and data you need and let the information/numbers guide you to success. Learn everything you can; there are a tremendous number of resources here on BP, reach out, they will help you. Good luck, enjoy the process and let me know if you need help with finding the information you need.

Currently researching

1) Memphis TN 

2) Kansas City, MO

3) Columbus, OH

I feel all 3 markets will make for good cash flow OOS rental properties.

 @Bo Kim , 

What specifically do you like about those areas? low vacancies rates? affordable real estate? high equity? ect.   

Thanks for the post

@Kelly Zimmerman , were do you go to find your information. Also, what market/s do you find yourself researching?

Check out the blog that I wrote about the top markets through 2020. This is more for mid-sized to large multi-family, but would be applicable to all sectors

https://www.biggerpockets.com/blogs/10145/68178-to...

 OHHHH SNAP!  Did I just get a comment from a BP Podcast Guest?!  I will check it out for sure!

@Todd Dexheimer

@Bo Kim

Your choices ranked by Realtor.com 

78. Columbus, OH

81. Memphis, TN

98. Kansas City, MO

Top 100 cities for 2018 Forecast by Realtor.com

Realtor.com’s model-based forecast uses data on the housing market and overall economy to estimate values for these variables for the year ahead. The forecast result is a projection for annual total sales increase (total 2018 existing-home sales vs. 2017) and annual median price increase (2018 median existing-home sales price vs. 2017).

.

@Ramsey Blankenship Hey Ramsey, I like the price point at 70-110K for B class neighborhoods the most for a full on turnkey company. Also, from what i've seen its a linear market so its good for someone like me looking mainly for cashflow and expand my portfolio. For example, I am currently looking at a house in Memphis 3/2 bd SFR 2 garage in a great part of town for around 105K. When I did my research so far, I like how they are doing a full on GUT job and rehabing the roof, new floors, hvac, water heater, etc.

@Terry Lao Hey Terry, great to hear from a neighbor. Thanks for pasting the stats in, I think I saw your post on the Vegas market. Woulda been excellent if I got in 2 years ago. My real estate goals are less appreciation and more cash flow, and I think these markets fit my goals better than vegas. Also seems to have a higher entrance point for a solid B neighborhood.

I'm currently looking at Detroit, Atlanta & Salt Lake City but will continue to keep the Phoenix area on my radar because I have multi-families there and am well-established with a great support team. I like the Yardi Matrix for their monthly and national outlooks, IRR's Viewpoint, Milken Institute, CoreLogic, City-Data & Freddie Mac. I know that seems like a lot but they all provide great information to help you decide if a particular demographic will meet your needs and more importantly perform/cashflow. Also for long distance ownership its important to ensure you have a great support team (real estate agent & property management). Another thing I failed to mention is finding a landlord friendly state. Problem tenants can erode cashflow fast so keep that in mind. Good luck.

Originally posted by @Ramsey Blankenship :

Essentially my top three are based on - A place I lived, a place I would like to live, and a place close to where I currently live. I am trying to break this mindset and invest in markets that make since financially, rather than proximity.  

Please participate in this conversation regardless of your experience, or even if you don't have three Markets.

Ramsey

It's good you're trying to break that mindset. None of those reasons are the basis for choosing a market. Figure out what your objective is and then identify the markets that best achieve that objective. I suspect one you do that, your top markets might look much different.

@Kelly Zimmerman i am headed to Salt Lake City next week for work. Hadn’t considered it. What should I check out while I am there? 

@Mike D'Arrigo I am currently under contract for what will put me at 30 units.  I became self aware that I was simply wanting to have more units when i chose to invest in a market I knew nothing about (Shreveport, La). I invested with a partner who lives there.  My Panama City properties pay very good cashflow however we are struggling in Shreveport due to vacancies. This lesson has taught me to take market research much more seriously, and to stop worrying about the quantity of units I own, and focus on the quality of the investments I make.

Ramsey

An interesting place I just stumbled across when talking to someone else who is looking to invest in CA is Bakersfield.  They have over 40% of their population as renters and only a 6.7% vacancy rate.  That's a great vacancy rate.  (I get my numbers off www.BestPlaces.net but I can't say exactly how accurate they are.)  No place I'm looking at investing has that low a vacancy rate!  Their crime is higher than average, but I guess you can't have everything.  :-D