Investor · Manhattan · Member since 2018 · 55 posts · 35 votes
I have about 49k from a cash-out refi and I wanted to find out which markets would be good for a brand new investor to get started. I am currently looking to invest in a single-family home with a price range between 80-125k in a C+ neighborhood.
@Nathan Roberts is right, lots of ppl talk about Kansas City.
@Jonathan Beaumont I would suggest not taking anyones opinion or going on word of mouth, but instead investigating what makes a strong market, & identifying where to invest based upon those criteria. 2 good places to start would be Milken Institute best performing cities 2018 (look for best performing large & mid sized cities), & markus & millichap 2019 multifamily North American investment forecast (chart of city cap rates).
I have about 49k from a cash-out refi and I wanted to find out which markets would be good for a brand new investor to get started. I am currently looking to invest in a single-family home with a price range between 80-125k in a C+ neighborhood.
http://worldpopulationreview.com is a great resource for finding out market demographics or statistics. With that said I am going to sell you on Kansas City haha. The information below is either provided by World Population Review, the Kansas City Regional Association of Realtors (KCRAR), or Zillow.
Population: 492k
Population Growth: Year 2015-2016 was 1.38%%; Year 2016-2017 was 1.38%; Year 2017-2018 was 0.75%. KC is the largest city by population in Missouri
Median Household Income: $52k
Median Rent Price: $1,025
Median Sales Price: $200k up 5.3% (KC Metropolitan Statistical Area; Includes 15 counties)
Median Home Value: $157k (Up 4.4% from the previous year according to Zillow)
These statistics showcase a viable market for real estate investors. Out of state investors flock to the Midwest for cash flow, great returns, and appreciation depending on the neighborhood. Areas that have high demand with little supply are likely to appreciate a lot faster than an area that is seeing superb demand. Great areas for rentals include South KC, Grandview, Raytown, core of the city in certain neighborhoods. Obviously the lower the class of real estate you want to invest in, the higher the risk, therefore you expect higher returns. Let me know if I can help out in anyway.
@Nathan Roberts is right, lots of ppl talk about Kansas City.
@Jonathan Beaumont I would suggest not taking anyones opinion or going on word of mouth, but instead investigating what makes a strong market, & identifying where to invest based upon those criteria. 2 good places to start would be Milken Institute best performing cities 2018 (look for best performing large & mid sized cities), & markus & millichap 2019 multifamily North American investment forecast (chart of city cap rates).
Kansas City metro is great, but be very careful and do a lot of extra homework. I would say use part of that 49 as a downpayment on something in a B class KC area: older Johnson County kansas, blue springs, Lee's summint, gladstone.
Our C class areas have bad schools, high crime, are hard to find good management, are way harder to find and keep quality paying renters, and quite often when the go vacant are vandalized costing tens of thousands.
Plus be sure to factor in licensing and rental inspections in evert city, even if it does not do it yet.
@Jonathan Beaumont Your money could go a long way as 20% down payments in the Memphis market. You could easily get two solid rental properties at 70-80k a piece that would bring in significant cash flow.
Thank you, everyone, for the help. I will take all of your advice into consideration when I move forward with a purchase. I have been working with a Roofstock advisor, and a lot of the properties that we have seen in decent areas with higher cash flow have either been in Indianapolis or parts of Alabama. I am a little hesitant to invest in those areas because I don't really hear a lot of people talking about single-family investing in those parts. I was looking to invest in either Kansas City or Memphis, but a lot of the properties that I am finding on Roofstock tend to be in bad neighborhoods.