Seeking new opportunities

33 Replies

I am still in the process of evaluating locations to move to further my real estate investing career. I have tentatively narrowed down locations and am currently leaning towards the Fayetteville / Northwest Arkansas area or towards Asheville, NC or a similar town in North Carolina.

The following criteria is what I have been using to narrow my choices:

1. The location must have a lake nearby for fishing.

2. A fairly temperate climate where I can fish and work year-round. Temperate for me, is not Gulf Coast hot and no ice fishing in the winter.

3. A growing population so that I can continue to implement a BRRRR strategy without concern for long term depreciation, or even stagnant appreciation.

4. Property must be able to cash flow after everything is accounted for.

5. Highly prefer an area that has live music and local farm fresh foods. I feel like not only am I looking for these things but most young people are also looking for these items which could potentially impact future growth.

6. Must also have good health care in a reasonable vicinity for a family member that will be moving to the area with us.

I will be traveling through Northwest Arkansas, Eastern Tennessee, and throughout North Carolina around the end of August to early September and would love to find out about any real estate meet ups that are scheduled during that time period. Finding an active investment community would be beneficial during my evaluation period, because I could use every ounce of local knowledge that I can get. I will also be looking for a new real estate team in whichever area that I choose to invest so if there are any real estate agents or hard money lenders that I could start to build a relationship with now, that could possibly sway my decision. If you know a few good fishing spots in addition to some of the best and worst areas to invest, that sounds even better.

The types of investment properties that I will be looking for are those that are run down with the type of issues that most sane investors avoid, and if it is in one of those time consuming work stopping historical districts, even better. I feel that those are the types of neighborhoods that seem to be more likely to still be in great shape in the future. I want to renovate poorly cared for homes in great neighborhoods in top-rated school districts, because I want to rent to people who are willing to do whatever it takes to make sure that their kid(s) grow up with the advantages and benefits that they never had. I don’t want low rent properties in the roughest neighborhood in town or in poor performing school districts for that very same reason.

Hey @Mike Castellow - I'm located in the Triangle region of NC. 

Areas of the Triangle would certainly meet most of your criteria. The only questionable criteria would be the weather... while the summers get hot and the winters are mild, we still experience all 4 seasons. Though, towards the mountainous (western) part of the state (Asheville) that you mentioned in your post, it does not get as hot, but the winters have more snow (skiing opportunities). 

If you want to talk about real estate and the investing community in our area - just let me know. 

Hi @Mike Castellow . I moved to Asheville 3 years ago from Texas. Joined the local REIA when I first got here and that was a huge help in getting up to speed. Saw a lot of interesting properties at first, but things cleaned up quickly. Wish I would have bought a lot more back then. There are still a good number of deals getting done, but a lot of competition. The local REIA had about 30 people attending the main meetings when I first arrived - now it is usually 100+ attending.

The easy rehabs have been pretty well cleaned up.  Now we need to go out and find deals.  Having rehab skills is really helpful as Good Contractors are pretty busy.  Asheville is an amazing place and I think you are right, it will just grow in popularity as people have more options to work from places they like. Four mild seasons, lots of outdoor activities, good restaurants, plentiful drinking holes, and vibrant downtown and W. AVL districts.  Afraid it is not much of a secret anymore.

@Eric Weireter I am really interested in the Triangle region as I feel that would be a similar lifestyle as to what I am used to in the Austin area. I'll definitely be passing through the area and doing some more evaluations to see how my numbers would work out there.

@Michael Tierney Wow. I knew the prices weren't going to be cheap, but that's a lot of investors at a REIA meetup in such a relatively small town. To come into a market like that, I would definitely have to find a niche that not many others are exploring. I appreciate the information, because it will help me evaluate my strategies to see if they align with the current market conditions.

I've also seen some interesting old homes in some of the small towns throughout the region, but all small towns nationwide seem to be shrinking in size while larger cities grow so I'm not sure how that looks for long term growth. This is a trend that I believe could eventually reverse just as it has in the past, but I'm not sure if my investment timeline is that long or well suited to what is basically speculation.

I believe there are a lot of opportunities outside of Asheville, as well.  I own rentals in Hendersonville and have been looking at Brevard as well.  It may be worth looking at some of these towns in your search.  The prices are less inflated in my opinion compared to Asheville.

@Mike Castellow I'll throw in 2 cents on the Fayetteville/NWA area. This area has exploded and is currently facing a housing shortage so prices are going up, up, and up. Same as someone mentioned about Asheville, all the easy deals are gone and the REIA meetings are packed with people that have more money than sense. Forget about finding anything on the MLS that you can make money on. Bidding wars are common and often places are going for well over asking. All the historic, need a lot of work districts are gobbled up and selling for a premium. If you want to plant in the NWA region, you will certainly need to find a niche and have a strong network...

As far as suggestions, just 45 minutes to the south is Ft.Smith. If the city council and planning folks ever get their head on straight, and start promoting job growth, it is poised to blow up. It sits on 2 major transportation arteries, with a river along one side, not to mention a university in the middle of it.  Inventory is plentiful, competition minimal, and deals can be had all day long... Problem is finding someone with a job to occupy or buy those deals. There also may be some opportunity in Mountain Home (central AR) and some of the small towns around it but I don't know that market very well so would only suggest that you look into it closer. 

Last thing, I typically run the local BP Meetup for Fayetteville. Our next one is tomorrow night but we typically have then once a month and it's generally in the 3rd or 4th week. Feel free to join if you're in town!

Hit me up if you have any questions about the area... I'll tag a few more folks to see if they have more to add.

@Henry Washington @Ryan Blackstone @Diane Stinebaugh @Jonathan Boyd  

thanks, Dustin,

yes, houses are flying off the shelves in NWA right now.  If you find something you have to be ready to move on it.  One house I wanted was on the market for 24 hours and had 8 offers (I didn't get it) People are trying to get above the comps, but then the bank has trouble lending. The other side of the coin is that when you do buy something you will have it rented immediately.  You will have many people call to rent and if they can't have the one they are calling for they will ask you if you have another.  I have people show up to house showings with deposits and/or all kinds of supporting paper work in hand. 

I have 2 houses in Springdale.  the second one was rented 6 days after I closed on it. 

Thanks for the mention Dustin. @Mike Castellow Dustin is right, the place is exploding here. Even the few off-market deals I’ve tried to negotiate want top dollar. But @Diane Stinebaugh is correct, too. I bought a duplex to house hack. The former tenants were gone and we were fixing it up (not living there yet) and we got inquiries as to when it would be ready nearly every time I was there. And this was in Farmington, not the hot beds of Fayetteville and Bentonville. I’m still hopeful of finding good deals here, though. 

@Ryan Howell I am just starting to researching some of the other towns in that region so I appreciate the advice. I haven't spent hardly any time in that area, but I was doing a little research on properties in the Hickory area last night. I'm planning to spend the next month researching employment trends and other pertinent information so that I'm at least somewhat prepared when I arrive for a visit next month.

This is why I use national lenders (conventional, commercial, and hard money).  Normally better terms than the local guys, and I don't have to keep calling around every new market I go into.  National insurance brokers too, and any other vendor that can be nationalized.  If only there were national contractors... that would remove the biggest headache.

@Mike Castellow I'm a realtor in Fort Smith and Northwest Arkansas but I'm not going to mention anything about the real estate because it's already been said in this thread. But I'm also a fisherman and have traveled the country fishing tournaments and Northwest Arkansas is a great place to be if you love to fish. You have Beaver Lake in Rogers, a short drive to the west will put you on one of my favorites Grand Lake, Fort Gibson, or Lake Tenkiller, at the Arkansas/Missouri state line you have Table Rock Lake, Bull Shoals, and Norfork, and a couple hours south you have Dardanelle. 

@Dustin Davis I think the growth explosion is the same in almost every town that I am considering living in or near and people paying over market values seems to be way too common for my tastes, unless of course I'm the one selling. If you could let me know what the meetup date is for August, I would love to see if I can schedule my trip around the meetup so that I can meet and talk with some people that already working in the area. 

@Diane Stinebaugh & @Jonathan Boyd I'm currently located between Austin and San Antonio and the growth throughout this area has also been incredible with the exact same issues of finding deals over a much larger area. Having people stop by and try to rent a property before you've even fixed it up is a really good problem to have. I've had both buyers and renters stop by a property that I'm currently renovating in San Marcos, and I know the house across the street is supposed to be listed in a couple of months so I'm trying to pick it up at a reasonable price before it hits the market. It's almost certain that no matter where I or anyone else chooses to invest, you have to be extremely diligent, have a niche that other's aren't fulfilling, be prepared, and patient enough to remember to not take a bad deal just to take a deal.

@Chris Hosier I like your style. My plan is to pass through the area and hopefully spend a little time fishing as well as driving neighborhoods to learn a lot more about the area. Beaver Lake is really tempting for my home so that I have equal access to Eureka Springs and the Fayetteville / Rogers area. It looks like I also need to do a little more research on the Fort Smith area since I've seen it mentioned a couple of times.

@Nghi Le That's a good point, but my question is, why couldn't there be a national contractor??? There are nationwide electrical, plumbing, pest control, oil change shops, and just about anything else you can imagine. It's only a scaling issue that shouldn't be any more difficult than any other business. I've actually thought about it myself and have a little different take on how it could be accomplished since my background is mainly in the inspection, construction, and maintenance of equipment in the refining and petrochemical industries. With the right partners this should be a somewhat reasonable goal.

@Mike Castellow

Even if you could create a national GC company, your experience would just be different in each location.  I definitely saw this when I was working in IT consulting at a big company called Avanade/Accenture.  I loved working with west coast teams and hated working with east coast folks.  That's just the nature of a people-centric business.  Each one has its own culture and governed by different rules.

For example, if a state requires that contractors actually take pass a test to get their license, you're going to get a different kind of contractor than states where you can simply pay for a license (like mine), even if you don't know how to swing a hammer.

@Nghi Le You're absolutely right but that doesn't stop many insurance companies, lenders, healthcare facilities, or food establishments from offering their products nationwide. Right now we all know that every state, county, city, and even HOA can have their own rules and regulations, but we deal with that as just another cost of doing business.

You might want to try and make some of the Commissioner of State Land's tax auctions while you are traveling through Arkansas. He has some scheduled for the end of August that are in the northern part of the state. I don't know about fishing...but it is beautiful up there!

http://www.cosl.org/catalog.aspx

@Mike Castellow

Products are different than services.  Much easier to scale products than services.  Again, the more dependence there is on people, the harder it is.  McDonald's is heavily reliant on systems and processes, and even so, your experience (and Yelp reviews) of each one can be vastly different because it matters who the person is you're interacting with in front of you.

@Nghi Le While I don't necessarily have the desire to build a nationwide remodeling company, your off handed comment has really got me thinking. While I completely agree that scaling products is far easier than scaling services, at the end of the day residential remodeling is just another task that should be broke down into systems and processes so that it's manageable. That should be true regardless if you're doing a bathroom remodel at your personal home, a complete gut and renovation, if you're a general contractor handling multiple properties at a time, or if you're one of the national residential construction companies. 

@Mike Castellow & @Nghi Le

National GCs exist. Just not at a "smaller" level. Why that's the case gets complicated but it's true. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

I find it unusual that almost all of your criteria are for personal preferences vs which markets have strong appreciation, land lord friendly laws, least natural disasters, etc...

@Jack B. That's mainly because if I'm not willing to live and rent in the area then I'm less likely to understand the wants and needs of the tenant so I personally feel that I would be less successful. There are a lot of very successful and wealthy investors out there that invest in everything from high cash flow cities with high crime rates and zero appreciation to housing with zero or negative cash flow but high appreciation. It's my personal preference to not participate in that type of investing, and I feel that catering to people with similar tastes as myself will make me happier and more successful in the long run.

I have spent the majority of my W-2 career travelling and spending an extensive amount of time in the vast majority of the states so I have a fairly decent idea as to my likes and dislikes about each region. I've also yet to find a location that is not susceptible to some type of natural disaster. Almost everywhere has the potential for flooding. West coast including Alaska and Hawaii has Earthquakes, Tsunamis, Volcanoes, and potential wildfires... My home state of Texas has hurricanes, floods, and drought often at the same time. Central US tends to be Tornado alley. They worry in the Great Plains about the aquifers going dry. So no, I'm not worried about a natural disaster, because I know that my neighbors will be in the same condition and it's just a part of life that you learn to deal with when you've personally been through a few of them.

I also didn't bother to ask anyone about population growth, appreciation, or landlord laws , because I have been doing that as part of my due diligence before I ever narrowed down my choices to just a select few areas.

@Jamie Rose Come up to Alaska... I'm typing this from my office in Kenai, and I've had a company rented garage apartment on the Kenai River in Soldotna for the last 2 years. The 2 weeks of summer are great but the winters tend to be a little long and dark for me.