Cities with best ROI for SFR

8 Replies

Hello everyone. I am new to BP and joined because I love the idea behind the community. Briefly, I'm a young professional (early 30's), who currently resides in the Metro-Detroit area. I am considering moving to Las Vegas because it is a great city for a single man. However, I'd like to ask the community what their opinion is regarding the best option for me and my long term REI strategy. I am contemplating buying and holding single family homes for cash flow as a means to retire in 10 years. I'd like to make $200k in passive income from REI. I'd like to know in which areas/cities it would be the easiest to make this goal a reality. I understand that the Midwest is great for cash flow from SFR, but Las Vegas seems like a better lifestyle for me. I appreciate the input from the community.

Dave

@Dave A. full disclosures I am a multifamily investor, and I believe in apartments more than SFR. I don't think SFR's get you to the finish line because they don't allow for scale.I personally am purchasing apartments locally in my Berwyn market, because I believe they offer the best opportunities for me to acquire scale.

If i were in your shoes, I think I would focus my energy on multifamily where you can acquire a lot more scale. Obviously, there are some markets where SFR investments make more sense than others, but they are always more expensive to manage in the long run.

@Dave A. Well probably stick with what you know in Detroit. I hope you have a lot of money to get to 200k a year as that will require roughly 2M by my estimate, maybe only 1.5M. Just to give you an idea

Thank you for the responses, they are greatly appreciated.  I'm planning on leaving Detroit in a few months for Vegas, and perhaps the better question would be what type of real estate is good to invest into in Las Vegas, NV.  Thank you again,

Dave

Hi @Dave A. I echo what @John Warren said as I too am a multifamily investor. However, I just transitioned out to Las Vegas (literally last week) from Miami Beach and the market here is VERY different. This is a market where SFR is definitely a stronger asset than MFR simply because much of the multifamily assets are in 'D' neighborhoods. There are some apartment deals but they're larger (150+ units) and my sweet spot is 10-30 units.

I am just starting to find a couple good realtors and so far my immediate strategy (specifically here in Vegas) is BRRRR of SFR's. I'm going to go for the $200k-$250k houses, light rehab, and rent (furnished and short-term [30 days]). There are some other strategies to be had here but that is likely going to be my first strategy in Vegas.

Originally posted by @Dave A. :

Also, does Las Vegas have as good a ROI when buying and holding RE for cash flow?

 rents in vegas are cheap and houses are high. I won't say cash flow is impossible, but it's low enough that B&H out of state would be far more lucrative and easier.

short term appreciation is a good play here though

A year ago, I was at LV. One can purchase a 1-2 br condo/apt for ~$80K each. I can see you buy a block of 4, 8, or a building generating cash. You can work math backwards see how much you need to meet that goal. 

Property values in Vegas has gone up a lot esp last 2 years. But downtown area where housing is still cheap is nothing to brag about. Vacancy, transients, break ins. Many Californians flock over there bought the whole block and are unloading.....