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!
I would go where the best team is. I work in Indianapolis with investors all over the world. I can't tell you how many investors that I've talked to that have had problems in other cities... not usually because the deal was bad, but the boots on the ground were bad. While I'm not a fan of turn-key overall, it's a very valid consideration when you are starting out.
My recommendation would be to reach out to you top 5-10 cities and start exploring the realtors, property managers, contractors, local real estate investors, wholesalers, etc. Find out what others are doing successfully. Cleveland and Detroit are too risky for me, but a lot of that risk is mitigated when you have a local team that understand the nuances of the different neighborhoods. The wrong team turn a "cash cow" in to a "money pit."
In my experience, I am doing well in Indianapolis and most of our clients are also doing well, but I have clients that are also doing well in Dallas, TX and Pueblo, CO and I don't think anyone mentioned those markets. Deals exist in most markets. Pick a few and understand that market.
Has anyone had experience investing out in Saint Francis, WI or South Milwaukee, WI? They may be great places to invest too.
Did some research into these properties and there seem to be quite a few SFR and MFR around the 100k range. Seems to be a healthy local economy with 3% unemployment to boot from looking at census data. Also, crime websites show hardly any criminal activity there, so seems pretty safe. Rents seem to be around the 1% range. Would love to connect with anyone investing or local to these markets.
I know this doesn't answer your question directly, but consider low-barrier niches in Southern CA, that isn't exactly the traditional rental and flip industry that 90% of BP members talk about, like mobile home flipping or land flipping. I'm in SoCal as well, and I do both and each require a very low amount to enter and have high returns (and passive returns as well).
@David W. - It depends on your metrics and short to long term plan.
Are you simply looking for cash flow?
What are your absolute minimum metrics to make you happy with a deal? Some basic metrics to start with are cash on cash return, cash flow. I usually do not count on appreciation for rentals.
Do you plan to buy with cash and BRRR?
Do you feel comfortable with SFR, 2-4 Unit multi-family, or larger?
With 100K cash, in your position I would diversify my money into two pots - one for SFR or duplexes purchase with cash / refi and use other pot for a down payment on a larger multifamily.
For markets, I would recommend looking into Indianapolis, Dayton, and Milwaukee.
@Brian Garlington How have your Cleveland investments played out? I grew up in the suburbs there and went to high school downtown (in Ohio City). Ohio City was practically a war zone when I was going to school there and now it’s filled with nice restaurants, bars, etc. Sure has changed for the better.
@Janett Lewis Hi Janet, if you don’t mInd in which areas of St. Louis are you investing. I’m interested on buying something but I don’t know in which neighborhood start looking. Thanks
@Rachel Sharp Cleveland also has one of the worst population declines over the last two decades and property values do not even keep up with inflation. There are almost always underlying reasons why certain markets are great for cash flow and I think it's wise to consider them when looking at the entirety of your investment. Happy Hunting!!
@David Waddleton
Hi David, just outside of Pittsburgh....the Tri-State area just recently figured out that there is more natural gas there than in the Middle East, and Shell Oil Co just opened a HUGE cracking plant. I’m about to close on my first multi family property here in two weeks. It’s a 3 family for $135K, but right now on the market there are multiple 2-3 families for less than $100k.
There’s a reason it’s been the most popular answer on your thread.
I’ve bought 34 units there in the last 12 months.
It won’t last long.
Those who keep talking about “population decline” in relation to Cleveland probably know nothing about the market.
Do yourself a favor and visit.Talk to operators on the ground,not some data wonks on BP who just simply regurgitate what they’ve read on some blog article (probably also written by some paid author who hasn’t visited Cleveland in 10 years).
It is also slowly but surely changing from a strict “cash-flowing market” and is sure to be seeing some crazy appreciation soon.
It’s the law of demand and supply.Investor interest (especially OOS) is just manic at this time!...again just check out responses on this thread alone.
Once it completes this cycle like Dallas,it will be clear who missed the boat.
Then they’ll be saying how they should have bought in Cleveland “when prices were still affordable “.
**Just avoid EAST CLEVELAND no matter how good the deal looks on paper.
Oh last but not least:
I live in Jacksonville.
Ignore anyone telling you they have properties less than 100k.
The one city I know that is the worst is Kansas City. You should all stay far, far away from KC. : )
What part of KC is to be avoided, Westport is red hot, North of the river hot, down towards Bartle Hall booming. Having said that I avoid that area because I do not need to go there.
Know folks who go to this area and do fine. The ones that get burned trying to make C, D areas with too much risk and they get burned. Hell, you can say this about any big city in the USA
I stay in the burbs do just fine I wait for the deal then try to move on it mainly B to A areas.
I agree with you. I was just joking because there's too much competition right now.
@David Waddleton
Hi David! I am just starting out too! Maybe it would be helpful to see what ratings look like locally, like a 3 vs a 7 on greatschools, or how areas you know locally look like, given their own crime data. I cant say for sure that it would correlate perfectly, but it might be a good experience. Other than that, I would try Integra realty resources and other market sites to try and find a city that isn't peaking in its cycle (but the report is months old at this point, just a warning...I dont know if they release them more than once a year). I cant say thay my advice will work, since, like I said, Im also just starting out, but they are some ideas for you to maybe try (and they don't cost money).
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+.
As a retired Certified Financial Planner, I look for investments, not focused on Capital Gains, but cash flow. A lot depends on your personal investment objectives, stage of life and what and when (if) you will need the money you are investing.
Northwest Arkansas. Land prices are super cheap. There is incredible growth. Fayetteville and Springdale are at 1% an occupancy for multi family. Bentonville is at 5% unoccupancy for multi family.
Fayetville is always in the top cities in the US to live.
Hi @David Waddleton
Like the other members, I recommend OH and IN. We buy, hold, and wholesale in both states. Excellent cashflowIng markets. We actually have a few fully occupied duplexes available now in Akron, Oh. Both under $100k.
The one city I know that is the worst is Kansas City. You should all stay far, far away from KC. : )
What part of KC is to be avoided, Westport is red hot, North of the river hot, down towards Bartle Hall booming. Having said that I avoid that area because I do not need to go there.
Know folks who go to this area and do fine. The ones that get burned trying to make C, D areas with too much risk and they get burned. Hell, you can say this about any big city in the USA
I stay in the burbs do just fine I wait for the deal then try to move on it mainly B to A areas.
I agree with you. I was just joking because there's too much competition right now.