Flipper/Rehabber · Bardstown, KY · Member since 2019 · 5 posts · 0 votes
hey guys and gals! This is my first form post here on bigger pockets so forgive me if my terminology isn't fully correct or If I seem to ask questions already answered on another forum. My families company, Thompson Legacy LLC, is based out central Kentucky and at the moment we oporate in pretty rual areas. And we have been having trouble finding some good deals. It seems like the compition is very fierce and the supply of houses is quite low. Our main sources of gaining properties has been the courthouse steps for forclosures, and our realtor who brings us the occasional home to look at. So my main question is, is there anyone on BP who has had success in rual markets? If so, what striatiges did you use to get good deals? Thanks in advance!
I've focused my investment in North Central Florida which I'd classify as 'rural' even though it has seen steady growth over the years. I've concentrated in SFHs and now looking into small MF (less than 10 units) in this same area.
I've seen decent success, but it isn't what you would see in areas with stronger industry or in costal areas. There are a few key guidelines I watch out for:
Check the demographics and make sure you keep your rents in the right zone. Too low and you have a lot of headaches with tenants, too high and you get priced out of the market. That zone has steadily creeped up, but just be mindful of where the boundaries are. In a rural market, the available tenants are much thinner when you get out of that zone. There simply isn't the economic base to fuel higher rents, but you can do well in the upper middle rent zone.
Invest in decent areas. This is obvious, but even in smaller rural towns, there are good neighborhoods and bad ones. I buy good houses in the good areas, often rehab them, and rent them for premium rents (premium in this market). My philosophy is that I rent quality houses to good people and my rents are fair.
I find better deals in off market sales. I have bought a lot of homes from the MLS, but I get a lot of referrals from word of mouth.
Be very clear on your estimates. The smaller markets leave a lot less room for mistakes, so use the deal calculators on this site and be very clear on your expense estimates. Don't be afraid to walk away when the margins are too thin - and in a small market it is easy to get desperate for a deal and underestimate the expenses. Thankfully, I haven't made this mistake yet, but I have definitely done better on some deals than others.
There is a lot more I've learned, but these are probably the major lessons. Good luck!