Investing in a Smaller Market

6 Replies

Alright BP so I live in area with a population just around 40k. Most of the mentors that I have seen or spoke with, or even successful investors are doing so in a bigger city. My question is, is it smart to invest in a smaller city like the one I'm in? It doesn't seem like there are many investors, so as a wholesaler I might have a difficult time finding cash buyers. I'm too far away from big cities to really jump in there but in this city the prices of houses is much lower than the national average. Also, there is an abundance of opportunities for implementing the BRRRR method too.

It's smart to invest wherever the #'s make sense. I suggest finding your niche that you like, understand and will make the most $ in. 

If the numbers don't make sense in your area, you're going to have to go looking closer to the big cities, sort of like out of state investing but instead- hours away from you. It's totally doable! 

Thanks for the reply! The numbers really do work here, on some properties you would be able to get over a 50% return on your investment in the first year! There are just very little investors here. 

I'd say go for it. I am investing near my hometown of Lancaster, PA and the numbers make a ton of sense there. Eventually I may plan to scale up into bigger cities, but I am satisfied with starting in a smaller city. Sometimes less competition is good, especially when starting out.

@Joshua Randall as @Julio Garcia stated. If the numbers make sense then go for it. There is nothing wrong with being a big fish in a small pond as long as you can be profitable. Thats the easy part. Becoming experienced enough and having the right resources and capital is the hard part. Making important decisions quickly and knowing the pros and cons of each deal is invaluable. I have 30 years experience in the Pittsburgh market with thousands of transactions under my belt and I am still learning something new every day.

Originally posted by @Joshua Randall :

Alright BP so I live in area with a population just around 40k. Most of the mentors that I have seen or spoke with, or even successful investors are doing so in a bigger city. My question is, is it smart to invest in a smaller city like the one I'm in? It doesn't seem like there are many investors, so as a wholesaler I might have a difficult time finding cash buyers. I'm too far away from big cities to really jump in there but in this city the prices of houses is much lower than the national average. Also, there is an abundance of opportunities for implementing the BRRRR method too.

If there are places that work for BRRRR, but not many people then I would focus more on that strategy than wholesaling. There's a strategy that works everywhere, but you have to work with what you have.

There are so many advantages to investing in your own backyard that I would definitely work it out where you are. However I would shift focus from wholesaling since it doesn't seem like a very viable business model based on what you said. 

 

That is what I call opportunity.

Fewer investors means more opportunities for you. Just ensure that the population is growing and you aren't buying into a declining market. 

That being said, if you are in an area with few investors, use that to your advantage. Leverage that, you will have more homes to choose from, more opportunities and more ways to make that $$$