Investor · Los Angeles · Member since 2018 · 134 posts · 117 votes
Nooby question here! Does anyone know where I can find a list of or advise me on the best cities to look for investment opportunities (rental) under $100k? Ideally, I would like to start with $50k property but $50k-$100k is my threshold. I live in Los Angeles and you won't get anything in a safe area for $700k+.
@David Waddleton I moved from San Diego to St. Louis specifically for this reason. I have 7 houses here and purchased them all over the past year. I paid 22,000-34,000 and they are all rented from $895-1200. Cashflowing 50% at least after taxes and insurance and maintainence are paid. For $50,000 you can get a turnkey property that’s Cashflow positive!
Just have boots on the ground or someone you trust in the area. You could develop a relationship with someone on BIgger Pockets!
@David W. Are you looking to pay cash or finance? Either way I generally advise folks, ESPECIALLY new investors, to steer clear of anything sub-$50k. Unless you live in the market or have boots on the ground you really trust, anything under $50k is likely going to be more headache than it's worth and/or be in an area you don't really want to deal with. For new investors, sticking to solid B/B+ areas is the best plan whether you're in your own market or not.
That being said, our average price for a B/B+ SFR in Birmingham is $100k. Some are down near $75-80k, others more like $130k. These are turnkey properties (so rehab done, managed, etc) so if you have an agent or know the area you could perhaps find cheaper props in good cash flow areas, but you'd need to do the rehab on them - plus you'd be fighting with us to buy them ;)
There are plenty of markets where you can get a decent cash flow prop for $100k, mostly in the South and Midwest. You'd need to decide if you want to go the turnkey route or assemble your own team (agent, contractors, PM etc). If you go turnkey, prices will be higher because everything is done for you (though you shouldn't be paying more than market price). You can get lower prices for props that need work, but then you need to pay for that work, manage it, etc. If you do it well, and there are no pricey surprises along the way, you could end up with a rehabbed prop cheaper than if you went turnkey - so it's a trade-off, price for effort, price for time, price for consistency.
Point is, regardless of turnkey or DIY, you can find props in your price range in a few good markets. BUT don't pull the trigger on something just because it's in your price range. I'd say sit tight and save up until you find a solid investment, rather than buying something sub-par just to get in the game.
Last point: I wanted to second the comment another poster made about flying out to see the people you work with. Esp for new investors going out of state, the trip will be worth the price ten times over. Whether you go turnkey or build your own team, go out there, tour the market, take a look at their handiwork, look people in the eye. The types of people you want to work with will be more than happy to accommodate your visit. Consider it an investment in your investment.
Nooby question here! Does anyone know where I can find a list of or advise me on the best cities to look for investment opportunities (rental) under $100k? Ideally, I would like to start with $50k property but $50k-$100k is my threshold. I live in Los Angeles and you won't get anything in a safe area for $700k+.
Midwest! I like Indiana and Ohio. Indiana a tad bit more. Lots of options under 100k!
If it hasn't been posted already I would highly recommend you check out Lexington, KY. Great economic metrics with consistent population growth for the past 100 years, a large diversification of employers and lastly a local government who doesn't like development so housing is continuing to become a shortage. However, the city is still small enough (400,000 population) and overlooked by the bigger players that there are a lot of low priced high return opportunities.
Everywhere I have grown up - Vancouver, Pittsburgh (hate that city), Baton Rouge has changed so much i.e. Baton Rouge after the hurricane is SO different when I visited it. I am starting to read "Long Distance Real Estate investing" but would like to start to check out cities that would be a good place to look. A $50k house is not the end of the world where trying to save up for a 1 million dollar property here in LA will allow you no room for error and you will not be cash flowing I can pretty much guarantee you unless you found a diamond in a rough.
Let me know if anyone has any insight on cities/regions that are affordable and would be a good place to start researching!
It's great that you mentioned the book "Long distance real estate investing", because I'm reading the same book. Most successful people do a lot of reading, by the way.
Nevertheless, I live in the Dallas/Fort Worth, TX area, which has traditionally been a lower priced area, and have mostly bought locally, but even in places like this, prices have risen dramatically, and it's getting harder to get good cash flows.
So, I've started looking in other parts of the country. We started buying notes in other parts of the country back in 2013, shortly after the financial crisis. From that we've discovered several good places to invest for rental cash flow as well.
Some of the best cities we've discovered are in the Rust Belt and in the South. I'll give you an example of some of my favorites:
Midwest
1. Toledo, OH - ranked #3 on one list of places to invest for cash flow. Toledo also has a city program called "Lucas County Land Bank" where you can buy bargain properties in need of rehab.
2. Cleveland, OH - In some respects better than Toledo, because rents are higher, but can still be bought at excellent prices.
3. South Bend, IN. - Also good purchase prices, and have local program similar to the Lucas County Land Bank described above. Stable economy due to college town. I like Indiana over Ohio because property taxes are lower in Indiana.
4. Indianapolis, IN- Biggest city in Indiana with similar characteristics.
5. Columbus, OH - Also a college town with rapidly improving economy.
South
1. Montgomery, AL - Very low property prices in relation to rents. Property taxes are low in Alabama. Easy foreclosure state if you buy notes.
2. Birmingham, AL - same as above.
3. Huntsville, AL - Also has the advantages of Alabama, but seems to have more affluence overall than Montgomery or Birmingham.
4. Memphis, TN
Any of these should be good for rental cash flow. Hope this helps.
I"m obviously partial to Pittsburgh (since this is my marketplace) and I think the reason why so many investors from around the country (and internationally as well) is because of the opportunity here to invest. You can pick an A or B neighborhood with a property that needs work, renovate, lease and refinance. You can pick something turn key. You can find good deals at low prices for single family and multi-units. Pockets everywhere at 8+ caps. Lots of opportunity here!!
Craig, could you send me info as well? I probably wont be able to move until the first of the year, but we are moving back to that area as soon as we sell our current fixer upper in upstate NY. By the way our place will sell for about 70K and needs work. I have no interest in stepping on David's toes!!! First come first served and all that ..... ethics!!
I live in LA and invest out of state in the midwest. Memphis, St. Louis, Cleveland, Akron, Birmingham. These are all great markets where you can find rental properties for <$100k which have a great 1% rent to price ratio or higher.
I live in San Diego. I'm just starting out and I have been looking at Indiana. Indianapolis, Bloomington, and Evansville.
Hoping to close on my first duplex soon at around 60k
Good luck!
Which market are you finding duplexes for 60k? How much cash flow are you projecting after PITI and PM? Is it in a war zone? What class neighborhood?
I considered duplexes in the 40-50k range but decided I have no business investing an out of state war zone... but it might not be a bad strategy if you can find one in a C- neighborhood or better for under 100k....
Nooby question here! Does anyone know where I can find a list of or advise me on the best cities to look for investment opportunities (rental) under $100k? Ideally, I would like to start with $50k property but $50k-$100k is my threshold. I live in Los Angeles and you won't get anything in a safe area for $700k+.
To clarify your question - are you looking to purchase a house for a total of $50-$100k or do you have $50-100k to invest? Are you willing to take on debt?