Money Moving to the Midwest!

23 Replies

There is no doubt in anybody's mind that 2020 has been one heck of a year so far. I'll be the first to admit I don't think it is done messing with us just yet. 

Through everything that has been happening, lock-downs, elections, protests, and much more- real estate investors are moving their money here to the Midwest! I am here in Sioux Falls and have had more than a few individuals reach out looking to invest in Sioux Falls more with the rising concerns, taxes, and worry along the coasts ( primarily for me the west coast).

The Midwest has remanded (MOSTLY) stable through everything going on all around us during the crazy year we have all been through.

Has anyone else experienced this explosion of out of state money coming in or has anyone started to look for different market here in the Midwest to invest in during this recent "mini real estate boom" we have been having? 

Would love to hear everyone else experiences on this!

The explosion of money coming into the midwest from the coasts is not new here.  There seems to have been more Californian's investing in Indianapolis than Hoosiers since 2016.  For investment properties of course.

With that, I do agree there will be a net migration from the coasts. Mostly to the south but some to the midwest (due to how relatively cheap it is here).  That will benefit the midwest retail market and home prices will rise.  

@Brady Aman Hey Brady! I go to college in Brookings SD and I am trying to get into RE investing. I’d love to help you out with any of your properties some time. Just let me know if you need anything in the future.

@Paul Shannon Has Hoosier nation taken a step back in recent months from typical investing trends? I know here in Sioux Falls, SD we had a brief hesitation when everything broke out back in April or so. But for the most part things have been trending up on all fronts here!  

@Brock Heppner Stay Hungry man! Starting to understand the investment world at a young age was one of the best decisions I have made in my young life! I am no stranger to Brookings and am alumni myself- lots of opportunity there,even for someone your age. Don't let peers push you in a different direction if you are passionate about real estate- you are never to young to begin building your domination! Would love to collab in some way- PM me. 

Originally posted by @Brady Aman :

@Paul Shannon Has Hoosier nation taken a step back in recent months from typical investing trends? I know here in Sioux Falls, SD we had a brief hesitation when everything broke out back in April or so. But for the most part things have been trending up on all fronts here!  

Same here....brief panic freeze and then demand rose.  However, listings are way down, as specially on investment properties.  Buyer/seller expectations are not aligned.  Prices remain strong due to very low inventory.  Not a lot of volume moving subsequently.  

 

@Paul Shannon Exact same- inventory is way down here as well. With the interest rates being so low people were quick to jump on what was available and it seems like now (and from what I have heard this is almost nationwide) demand and cash offers are dominating the sales of available homes.

Yes a lot of people from California invest in Indy and Lafayette.  It is increasing costs on investment properties, but honestly the bad ones are the ones they scope up first.  If you live here you normally try to get them before they even hit the market.

@Brady Aman nothing new, here in Ohio we have been competing with out of state money consistently since about 2010 or so! Inventory is down right now, but being local give you the off market advantage so you have to use it.

I actually met one of my partners through out of state money. He was investing and bought a property from me and a bunch of others, but started losing quickly and having issues with PM’s. I stepped in to help, turned it around and we started partnering on deals and are great friends now!

Originally posted by @Brady Aman :

There is no doubt in anybody's mind that 2020 has been one heck of a year so far. I'll be the first to admit I don't think it is done messing with us just yet. 

Through everything that has been happening, lock-downs, elections, protests, and much more- real estate investors are moving their money  here to the Midwest! I am here in Sioux Falls and have had more than a few individuals reach out looking to invest in Sioux Falls more with the rising concerns, taxes, and worry along the coasts ( primarily for me the west coast). 

The Midwest has remanded (MOSTLY) stable through everything going on all around us during the crazy year we have all been through.

Has anyone else experienced this explosion of out of state money coming in or has anyone started to look for different market here in the Midwest to invest in during this recent "mini real estate boom" we have been having? 

Would love to hear everyone else experiences on this!

OOS investors investing in Mid-market cities in the Midwest has been going on for years. The Midwest is a great place for investments due to the low prices. However, I have seen an uptick in investors looking to buy in the last few months. Inventory has dropped though so it is becoming pretty crazy. We will see what happens in a few months. 

 

Originally posted by @Brady Aman :

There is no doubt in anybody's mind that 2020 has been one heck of a year so far. I'll be the first to admit I don't think it is done messing with us just yet. 

Through everything that has been happening, lock-downs, elections, protests, and much more- real estate investors are moving their money  here to the Midwest! I am here in Sioux Falls and have had more than a few individuals reach out looking to invest in Sioux Falls more with the rising concerns, taxes, and worry along the coasts ( primarily for me the west coast). 

The Midwest has remanded (MOSTLY) stable through everything going on all around us during the crazy year we have all been through.

Has anyone else experienced this explosion of out of state money coming in or has anyone started to look for different market here in the Midwest to invest in during this recent "mini real estate boom" we have been having? 

Would love to hear everyone else experiences on this!

There is a lot of out of state money coming into Columbus, Ohio right now

 

@Brady Aman some credit for SD up-market needs to go to your Governor, truly, she has really represented SD very well as of recent and done an amazing job at using national exposure to convert into opportunity to promote SD opportunities and investing in SD.

As for investment $ coming to Midwest, you only about 40 years late on that news, it's just been a well kept insider note of the fund level investors not eager to shout from the hills. The Midwest has long been viewed as the "safe & steady" investment geography because when you look at all the market historical data, it is. Recessions are felt lighter, recoveries are quicker to materialize if not originate, unemployment is lower, acquisitions cost much lower in proportion to returns AND whole $'s, and the social make-up is ideal for performance.

Minnesota, I wouldn't say a "mini-boom" unless you define that as nearly a decade long strong growth and appreciation with a trajectory that not even covid or riots has been able to derail a "mini-boom".

Minnesota has: -in-land sea port, -Federal Reserve, -agriculture main hub, -financial main hub, -insurance industry hub, -medical industry main hub, -major military manufacturing hub and on and on and on and on. Minnesota is about as recession proof as a state can possibly get aside from Texas which is the only 100% independent state in the union. With the numerous unique industry features MN has, it will continue to out perform many if not most markets during stagflation or recession cycles.

The downside of the stable midwest markets is that they equally don't have the explosive boom's that others can have, for example the Florida RE boom, San Francisco, Denver etc.. 

I’ll add my 2 cents regarding in the suburbs of Milwaukee, Wisconsin market. There is little to no supply and everything that gets listed is under contract within a few days. With low rates and high demand, I’m not sure this changes any time soon. People I talk to tell me they are getting tons of action on anything that becomes available and a lot of it appears to be coming from out of state investors. 

Seems there has been more out of state money coming into the Milwaukee, WI market.  The low prices attract many OOS investors.  Like any other market, investors need to do their research.  Because those low price areas usually aren't the greatest.  That being said, I invest quite a bit in the Milwaukee area.  I tend to like the Milwaukee suburbs better though.

@Brady Aman Kansas City is continuing to surge in most all asset classes in particular industrial and multifamily. We are seeing money from CA, Denver, TX, Chicago, Omaha, and Boston as investors understand stable affordable market. As the multifamily inventory remains low, I think there is opporutunity to get better returns on retail shopping centers that provide recession resistant services (Salon, auto fix it, grocery, etc...) and industrial warehousing for all of the ecommerce that is bringing in loads of trucking and distribution. 

@Brady Aman I can't speak for the entire Midwest from personal experience, but Milwaukee has always received a fair amount of attention over the last years. I get a lot of messages on BP, but I would say the amount has been about the same this year as in previous years.

We have seen prices go up quite a bit over the last years, 8% in 2019 and from what it looks like at least as much this year. If you want to look at the data, go on my BP profile page and watch my market update video - you can go back in time as well. In August the median SF sales price has reached 188k, so the allure of really cheap properties reduced; anything that sells for a fraction of that is really junk.

The one thing I have noticed is that we are getting a lot more relocation buyers. Milwaukee has seen about 6 billion invested downtown over the last few years and it shows; construction is also booming in the suburbs and we are seeing a very active and diverse job market. Milwaukee has not seen a grwoth spurt like this since the 1960s.

Originally posted by @Brady Aman :

There is no doubt in anybody's mind that 2020 has been one heck of a year so far. I'll be the first to admit I don't think it is done messing with us just yet. 

Through everything that has been happening, lock-downs, elections, protests, and much more- real estate investors are moving their money  here to the Midwest! I am here in Sioux Falls and have had more than a few individuals reach out looking to invest in Sioux Falls more with the rising concerns, taxes, and worry along the coasts ( primarily for me the west coast). 

The Midwest has remanded (MOSTLY) stable through everything going on all around us during the crazy year we have all been through.

Has anyone else experienced this explosion of out of state money coming in or has anyone started to look for different market here in the Midwest to invest in during this recent "mini real estate boom" we have been having? 

Would love to hear everyone else experiences on this!

as others mentioned this has been going on for decades out of area investors prop up mid west markets if it was not for the out of area investor many of these cities would just be withering away like what happened in detroit..  out of area investors ARE market makers.

A lot of these investors will take on the C class or worse landlord risks that the locals simply learned years ago to avoid unless its your business.

 

Updated about 1 month ago

I started financing investors in the BRRR strategy in 2002 in Detroit. West coast marketing company does sales I did the HML local team did the BRRR and prop management. And i probably was not the first but I suspect one of the first to put it all together like this..

I work with a ton of clients from all around the country who have the same goals and plan. The midwest has been booming as of late and we are in one the hottest markets in a long time here in the Rock County, Wisconsin market. I work primarily in Janesville and Beloit. The growth and Amazon, ABC Supply and Dollar General is showing the vast value and potential in this market. I highly recommend any investor look into it. I would love to share more information if you are curious to learn more!