$30k to play with, looking for cashflow. Where do you go?

34 Replies

Subject pretty much covers it. I've picked up a few rentals in Denver in the past 2 years but I bought them as primaries, moved in, then moved onto the next one. Now I'm in a primary that I'm not going to leave for a few years, so I'm looking at picking up a rental the old fashioned way. But I'm priced out of the Denver market when it comes to 25% down rentals. So let's say I have $30k to play with, any markets you would suggest with good renter pool, good demographics, good job market, and decent cash flow? Been looking at parts of Michigan, Indy, Columbus and KC

Originally posted by @Alex Johnson :

Subject pretty much covers it. I've picked up a few rentals in Denver in the past 2 years but I bought them as primaries, moved in, then moved onto the next one. Now I'm in a primary that I'm not going to leave for a few years, so I'm looking at picking up a rental the old fashioned way. But I'm priced out of the Denver market when it comes to 25% down rentals. So let's say I have $30k to play with, any markets you would suggest with good renter pool, good demographics, good job market, and decent cash flow? Been looking at parts of Michigan, Indy, Columbus and KC

 Hi Alex, Columbus is a fantastic place to invest. As a state capitol, with OSU graduating 6000+ students a year and with the tax incentives that are bringing new business to Columbus, there is no shortage of need for multifamily housing.  

Robert Ellis, Real Estate Agent in OH (#2014002724)

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Hey @Alex Johnson you could consider buying a short term rental property if cash flow is your goal.  If you're willing to do you homework you can make much more than a long term rental.  Just a thought! 

Hey @Alex Johnson I am in a similar boat.  40k to invest and looking for cash flow.  I am starting to analyze KC for potential cash flow.  The key for me is I have contacts in Kansas City that can help me understand the different neighborhoods.

@Tyler Work we are also looking at potential short term rentals either in Denver area or KC.  Do you know if the Westminster, Arvada, etc. have the same restrictions on Airbnb that Denver has?  (Must be primary residence etc?)

@Zac Newell check out @James Carlson 's website, he has a pretty comprehensive list of regulations in the Denver area.  From what I gather, rentals of < 30 days is illegal in Arvada and Westminster.  You could go through the list of every city in the metro area, but in my opinion the point is moot since there is little travel demand that far outside the city.  I ran a test property in Castle Rock and it was a complete failure.  On the other hand, Colorado Springs has zero regulation and welcomes short term rentals with open arms, so you could consider looking south.  

Even if STRs were legal in Denver for investors, if you are open to investing anywhere, I would look elsewhere.  There are plenty of other cities that have much lower real estate prices and healthy travel demand.  Just my 2 cents, hope that helps! 

@Alex Johnson $30K is not enough to really work with, even out of state. You should drop it on your consumer debt to increase your cash flow in your personal finances.

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@Alex Johnson you can invest in notes. You can get a performing note that will give you good cash flow and double digit returns

Chris Seveney

    @Alex Johnson check out the South!  Alabama has some great returns, particularly Huntsville and Montgomery.  Fully renovated properties with tenants in place typically run $85,000-$100,000 (in these markets) for rents of $900-$1,200 so that would work with the down payment amounts you have and allow you to save some cash reserves for maintenance/vacancy/rainy days.

    • Mazda just announced that they are going to build a 3.6 billion dollar plant not far from Huntsville.  
    • The FBI Langley offices are in the process of relocating 4,000-5,000 employees to a new location on Redstone Aresnal (which already employs 35,000).  
    • Huntsville is #2 for P.h.d's per capita due to the Cummings Research Park.  
    • Remmington Arms and Polaris also just opened plants, and Boeing already had a huge presence there as well as Toyota.  
    • Huntsville is expected to grow from 500,000 in the MSA to more than 1,200,000 in the next 20 years, and it's only 1.5 hours South of Nashville.  
    • Alabama is #49 for property taxes, so that's less burden on your cash flow.
    • Crime is very low compared to most cities of the same size and educational levels are great!

    I would also look at Indianapolis, Tulsa, OK City.  We've done 250+ properties in AL and more in Atlanta and a few in Kansas CIty, so glad to answer questions on those markets.  Inbox me or send me a friend invite and I'll share some podcasts that cover a lot about market selection.

    Jared Garfield

    @Jared Garfield The numbers I'm seeing are considerably less: $1.6B plant.  Do you have a different source?

    From Reuters: "Toyota, Mazda announce $1.6 billion plant for Huntsville, Alabama... The plant will produce 300,000 vehicles a year and should open on a 2,500-acre former cotton field in 2021, about 14 miles from Toyota’s engine plant in Huntsville."

    Still excellent news for Huntsville area.

    Brian Reynolds

      @Brian Reynolds , you are absolutely right, I remembered the investment in the plant incorrectly.  I got back from a trip managing some of our rehabs in Atlanta at 2:30 AM this morning and was operating on about 4 hours sleep when I skimmed the article.  Thanks for catching that.  The important thing here is the jobs and the long term impact on the economy.  $1.6 B sounds great, but much of that investment will go to the global and national economy in the form of equipment purchases for the assembly line, construction costs (also very unlikely to be awarded to a local construction company in Limestone or Madison Counties) and perhaps infrastructure (some of which will go to the local municipalities).  Certainly much to be excited about for an MSA with a population around 500,000 or less.  Brian, do you do some investing in Northern Alabama?  It sounds like you follow the economic news really well (one of the best indicators of where to invest I think).

      Jared Garfield

      My wife and I have our sights on Huntsville area later this year, preferably multi-family 5+ units. Been following news for ~7 months now. May get an SFR to test out market first, or dive right in. Just gotta stop being distracted by the crypto markets!

      Brian Reynolds

        @Brian Reynolds  Crypto currency can be pretty distracting haha. What cryptos you looking at? I'm not hardcore, but I have some Bitcoin and Ethereum.

        $30k can get you some decent properties in the Memphis market. Feel to pm me if interested.

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        @Brian Reynolds Prices have been going up quite a bit in Huntsville for quite a while now, and inventory is becoming pretty depleted.  We've done over 125 properties in Huntsville and have resources for property management, construction and whatnot, so if you need anything, don't hesitate to reach out.  There are some really good focus spots that have the right price points as well as great schools.  Multifamily is pretty competitive at the moment.

        Jared Garfield

        Originally posted by @Jared Garfield :

        @Brian Reynolds Prices have been going up quite a bit in Huntsville for quite a while now, and inventory is becoming pretty depleted.  We've done over 125 properties in Huntsville and have resources for property management, construction and whatnot, so if you need anything, don't hesitate to reach out.  There are some really good focus spots that have the right price points as well as great schools.  Multifamily is pretty competitive at the moment.

         This is SHOCKING to me to hear.  My husband's mother and grandmother live in Hartselle, AL, and we have to fly into either Nashville and make the drive, or Huntsville and it's about 30-40 min drive.  My memory of Huntsville was that it wasn't that big, and didn't have much to offer.  How quickly do units get rented out or how long do they sit?  What is the rental inventory demand right now (how many days/months on market average)?

        Getting a cheap property is great, but having it sit because there are too many available units and not enough people to rent them is not good.

        Atlanta, on the other hand.....have you heard about AhaBNB Housing?  What is your take on their business model?

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        Look at the Grand Junction MLS since you have access. $30K won't get you into a clean rental house but it will get you into decent condos and townhouses - you pick some properties and I can tell you about the areas and steer you... We have a 1% vacancy rate on rentals locally. No problem finding tenants. And you are only 3-4 hours away via I-70.

        Teri S.

          @Alex Johnson Based on where the Denver market is at, find a lender that will allow you to take a line of credit off of your rentals because of the amount of the appreciation and also find a lender that will allow you to use the current income off the rental for DTI calculations. You should be able to go up to 75% LTV for both. Getting ideal financing is the life blood of our business so we are constantly calling financial institutions and private lenders to get the best financing possible. We have lenders that will do both in West Michigan under 5%.

          Follow the jobs. People move to cities with jobs. People need a place to live. Invest where the jobs are going and you can't go wrong.

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