Looking for markets that cashflow for Multi family apartments

Investor · Jacksonville, FL · Member since 2008 · 61 posts · 12 votes

Hello Everyone

I am Working on our goals for the next 12 weeks in order to come up with strategies and a market to buy properties in. I am located in Florida and own some smaller multi family properties here. But market is super hot still in Florida and not seeing too many deals on MLS. I have not yet started marketing anywhere else yet considering the very high prices.

I wanted to ask for market suggestions where there is good cashflow. Open to NC,GA, SC and TN. Looked on MLS for some GA and NC properties but prices still high and no positive cashflow. I would be an out of state investor and would need a good property management company too if I buy outside Florida.

Please share your thoughts.

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Tim Debronsky

Full-Time Investor & Agent · Amherst, OH · Member since 2014 · 149 posts · 50 votes

I agree with @Simon Ashbaugh there are still cash flowing deals in Ohio, especially Cleveland. Let me know if how I can help you.

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Chris Vargas
San Diego · Member since 2021 · 16 posts · 11 votes
4y
Perhaps should pívot into looking for an off market deal. Yes, it's more work but it will definitely be worth it. I would also suggest to find a good legit wholesaler that can find the deal and you just pay the assignment fee. You can also look for value adds! Properties that the numbers may not make sense as they are now but if you added sq ft, ADU, bathroom, etc can make the numbers better. Good luck
2 Reply
Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
Agreed with Chris, off-market is the place you need to be looking. Day 1 cash flow deals aren't hanging out on the MLS.
0 Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
4y
If only it was as easy as posting here to find screaming deals!
It will take hard work and networking - lots of both:)
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Anna Sam
OP
Investor · Jacksonville, FL · Member since 2008 · 61 posts · 12 votes
4y
Thanks Chris, Taylor and Drew. Appreciate your suggestions.
0 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
4y
Generally speaking in the Midwest. But finding a good deal takes a lot of digging. Most of what I have bought over the last years did not look like a home run deal. Typically you have to look harder, ask a lot of how could I make this work type questions and then invest the time and money to do what needs to be done to make it a deal worth owning.
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Sam McCormackBusiness Member
Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
3y
@Anna Sam
Hi Anna, like others have said, you likely won't find day 1 cash flow apartments, but putting some work into it and going from there I believe will go a long way because a lot of people don't want that. They want that immediate cash. Cincinnati I would say has a lot of these opportunities. I also have contractors if you are willing to put work in like that. Let me know if you are interested in Greater Cincinnati!
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Killeen Texas is a cash flowing market
0 Reply
Mike TerryPro Member
Investor · Fort Myers, FL · Member since 2015 · 293 posts · 278 votes
3y
Try small communities in Southern GA. It's close enough to you that you can get there and purchase prices are not like Florida 's. Macon, Thomasville, Warner Robins, Valdosta. All are affordable markets to look at.
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Simon Ashbaugh
Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
3y
I would start cold calling in the areas you want. you could also consider looking out of state, there's a tone of cashflowing properties in Ohio!
1 Reply
Eric Boshart
Lender · Fort Worth, TX · Member since 2016 · 77 posts · 20 votes
3y
I've seen a lot of investors in the DFW metroplex move to Oklahoma to look for deals as Oklahoma is still generally affordable. Places like Lawton, etc.
1 Reply
Nate Sanow
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
3y
Quote from @Eric Boshart:

I've seen a lot of investors in the DFW metroplex move to Oklahoma to look for deals as Oklahoma is still generally affordable. Places like Lawton, etc.

That’s definitely true, but I’ll say anything multifamily in Tulsa and probably OKC too typically tends to move privately. It’s more of a who do you know market in that regard
1 Reply
Tim Debronsky
Full-Time Investor & Agent · Amherst, OH · Member since 2014 · 149 posts · 50 votes
3y
I agree with @Simon Ashbaugh there are still cash flowing deals in Ohio, especially Cleveland. Let me know if how I can help you.
2 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Anna Sam:

Hello Everyone
I am Working on our goals for the next 12 weeks in order to come up with strategies and a market to buy properties in. I am located in Florida and own some smaller multi family properties here. But market is super hot still in Florida and not seeing too many deals on MLS. I have not yet started marketing anywhere else yet considering the very high prices.
I wanted to ask for market suggestions where there is good cashflow. Open to NC,GA, SC and TN. Looked on MLS for some GA and NC properties but prices still high and no positive cashflow. I would be an out of state investor and would need a good property management company too if I buy outside Florida.
Please share your thoughts.

Cleveland of course. You missed the boat for the 20- 25% net caps (based on cash buys ) but you can still get 10% net caps. Its all about knowledge and your team
1 Reply
Alyssa Dyer
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
3y
Quote from @Nate Sanow:

Quote from @Eric Boshart:

I've seen a lot of investors in the DFW metroplex move to Oklahoma to look for deals as Oklahoma is still generally affordable. Places like Lawton, etc.

That’s definitely true, but I’ll say anything multifamily in Tulsa and probably OKC too typically tends to move privately. It’s more of a who do you know market in that regard

100% agree with you on this
0 Reply
Kyle Scully
Member since 2020 · 9 posts · 5 votes
3y
Quote from @Eliott Elias:

Killeen Texas is a cash flowing market

How is the apartment complex situation in Killeen? Are there many? New ones? I like Texas as a state to invest in…wondering how Killeen is with apartment bldgs etc.
1 Reply
Drew C Grossman
Investor · Jacksonville, FL · Member since 2019 · 135 posts · 106 votes
3y
Hi @Anna Sam,
Have you looked into Ocala, FL on your goal to find some cash flowing Multifamily/ Apartments? I have worked and analyzed deals, on and off market in virtually every part of Florida and have not come across a sub market with existing cash flow/equity upside as Ocala. There are certainly areas you want to be and areas you don't however the target markets we are operating in have a need for entry level "affordable housing" and small multi family fills this demand. I've been investing here for the past few years and have built a little over a dozen new construction single family homes and acquired a Self Storage building so am very familiar with the dynamics/management/renter quality ect and have been very pleased. Currently building a handful of 2,000SqFt Duplex(s) for under 250k all in project cost with a market value of $425k when built (comps). Why is this opportunity so good? We have a builder relationship that we have previously worked with has presented opportunity to build block properties at a very reasonable price per SqFt. The materials and labor side of the equation has cooled off tremendously since last year which is why the price to build makes sense. What is the catch....the biggest hurdle is having to pay cash in a draw schedule up front compared to using tradition financing which we have previously capitalized on. Essentially the builder is using our money to build vs there own which is why we are able to build for 60% of market value. Typically most people that do these deals are middle man flippers but in this case for us, we are keeping as long term rentals because the cash flow is great however this may be a great market to house hack or Brrrr with the amount of forced equity day 1 or potential finance down the road when rates cool off. You will find a handful of New Construction and even decent resale Multi Family deals on the MLS and will pay between $150-$180 a sqft for the older resales and $185-$225 a sqft for new construction depending on size, specific location, finishes ect. With this builder, we are building all in (with land) at $125aSqFt. These 2,000 SqFt 4/4 models rent out for $1500+ a side / over $3000+ of gross monthly income per duplex. For reference, annual Taxes and Insurance are $3,400 and $1,100 respectively for each Duplex.
Hope this helps and best of luck with your goal! I am curious to see other markets out there that may have this same type of potential as I have only invested and have experience for the most part in Florida.
1 Reply
Jewel B.Pro Member
New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 121 votes
3y
Quote from @Chris Vargas:

Perhaps should pívot into looking for an off market deal. Yes, it's more work but it will definitely be worth it. I would also suggest to find a good legit wholesaler that can find the deal and you just pay the assignment fee. You can also look for value adds! Properties that the numbers may not make sense as they are now but if you added sq ft, ADU, bathroom, etc can make the numbers better. Good luck

Hey Chris,
How would someone find out if that's even a possibility (legally or practically)? Would you need to contact the local government?
0 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
3y
Quote from @Drew C Grossman:

Hi @Anna Sam,
Have you looked into Ocala, FL on your goal to find some cash flowing Multifamily/ Apartments? I have worked and analyzed deals, on and off market in virtually every part of Florida and have not come across a sub market with existing cash flow/equity upside as Ocala. There are certainly areas you want to be and areas you don't however the target markets we are operating in have a need for entry level "affordable housing" and small multi family fills this demand. I've been investing here for the past few years and have built a little over a dozen new construction single family homes and acquired a Self Storage building so am very familiar with the dynamics/management/renter quality ect and have been very pleased. Currently building a handful of 2,000SqFt Duplex(s) for under 250k all in project cost with a market value of $425k when built (comps). Why is this opportunity so good? We have a builder relationship that we have previously worked with has presented opportunity to build block properties at a very reasonable price per SqFt. The materials and labor side of the equation has cooled off tremendously since last year which is why the price to build makes sense. What is the catch....the biggest hurdle is having to pay cash in a draw schedule up front compared to using tradition financing which we have previously capitalized on. Essentially the builder is using our money to build vs there own which is why we are able to build for 60% of market value. Typically most people that do these deals are middle man flippers but in this case for us, we are keeping as long term rentals because the cash flow is great however this may be a great market to house hack or Brrrr with the amount of forced equity day 1 or potential finance down the road when rates cool off. You will find a handful of New Construction and even decent resale Multi Family deals on the MLS and will pay between $150-$180 a sqft for the older resales and $185-$225 a sqft for new construction depending on size, specific location, finishes ect. With this builder, we are building all in (with land) at $125aSqFt. These 2,000 SqFt 4/4 models rent out for $1500+ a side / over $3000+ of gross monthly income per duplex. For reference, annual Taxes and Insurance are $3,400 and $1,100 respectively for each Duplex.
Hope this helps and best of luck with your goal! I am curious to see other markets out there that may have this same type of potential as I have only invested and have experience for the most part in Florida.

What's the upside in Ocala, what's the industry there, demographic, what big cities is it near? Is it going to demand the population versus other competing Florida cities?
0 Reply
Mitchlyn D.
Rental Property Investor · Jacksonville, FL · Member since 2015 · 343 posts · 142 votes
3y
Quote from @Drew C Grossman:

Hi @Anna Sam,
Have you looked into Ocala, FL on your goal to find some cash flowing Multifamily/ Apartments? I have worked and analyzed deals, on and off market in virtually every part of Florida and have not come across a sub market with existing cash flow/equity upside as Ocala. There are certainly areas you want to be and areas you don't however the target markets we are operating in have a need for entry level "affordable housing" and small multi family fills this demand. I've been investing here for the past few years and have built a little over a dozen new construction single family homes and acquired a Self Storage building so am very familiar with the dynamics/management/renter quality ect and have been very pleased. Currently building a handful of 2,000SqFt Duplex(s) for under 250k all in project cost with a market value of $425k when built (comps). Why is this opportunity so good? We have a builder relationship that we have previously worked with has presented opportunity to build block properties at a very reasonable price per SqFt. The materials and labor side of the equation has cooled off tremendously since last year which is why the price to build makes sense. What is the catch....the biggest hurdle is having to pay cash in a draw schedule up front compared to using tradition financing which we have previously capitalized on. Essentially the builder is using our money to build vs there own which is why we are able to build for 60% of market value. Typically most people that do these deals are middle man flippers but in this case for us, we are keeping as long term rentals because the cash flow is great however this may be a great market to house hack or Brrrr with the amount of forced equity day 1 or potential finance down the road when rates cool off. You will find a handful of New Construction and even decent resale Multi Family deals on the MLS and will pay between $150-$180 a sqft for the older resales and $185-$225 a sqft for new construction depending on size, specific location, finishes ect. With this builder, we are building all in (with land) at $125aSqFt. These 2,000 SqFt 4/4 models rent out for $1500+ a side / over $3000+ of gross monthly income per duplex. For reference, annual Taxes and Insurance are $3,400 and $1,100 respectively for each Duplex.
Hope this helps and best of luck with your goal! I am curious to see other markets out there that may have this same type of potential as I have only invested and have experience for the most part in Florida.

@Drew C Grossman With the build to rent model, in this Market, are you concerned that you 'may' not get the appraised value you are hoping for? Or is that Market essentially hot overall so you don't have the appraised value issue?
0 Reply
Drew C Grossman
Investor · Jacksonville, FL · Member since 2019 · 135 posts · 106 votes
3y
Quote from @V.G Jason:

Quote from @Drew C Grossman:

Hi @Anna Sam,
Have you looked into Ocala, FL on your goal to find some cash flowing Multifamily/ Apartments? I have worked and analyzed deals, on and off market in virtually every part of Florida and have not come across a sub market with existing cash flow/equity upside as Ocala. There are certainly areas you want to be and areas you don't however the target markets we are operating in have a need for entry level "affordable housing" and small multi family fills this demand. I've been investing here for the past few years and have built a little over a dozen new construction single family homes and acquired a Self Storage building so am very familiar with the dynamics/management/renter quality ect and have been very pleased. Currently building a handful of 2,000SqFt Duplex(s) for under 250k all in project cost with a market value of $425k when built (comps). Why is this opportunity so good? We have a builder relationship that we have previously worked with has presented opportunity to build block properties at a very reasonable price per SqFt. The materials and labor side of the equation has cooled off tremendously since last year which is why the price to build makes sense. What is the catch....the biggest hurdle is having to pay cash in a draw schedule up front compared to using tradition financing which we have previously capitalized on. Essentially the builder is using our money to build vs there own which is why we are able to build for 60% of market value. Typically most people that do these deals are middle man flippers but in this case for us, we are keeping as long term rentals because the cash flow is great however this may be a great market to house hack or Brrrr with the amount of forced equity day 1 or potential finance down the road when rates cool off. You will find a handful of New Construction and even decent resale Multi Family deals on the MLS and will pay between $150-$180 a sqft for the older resales and $185-$225 a sqft for new construction depending on size, specific location, finishes ect. With this builder, we are building all in (with land) at $125aSqFt. These 2,000 SqFt 4/4 models rent out for $1500+ a side / over $3000+ of gross monthly income per duplex. For reference, annual Taxes and Insurance are $3,400 and $1,100 respectively for each Duplex.
Hope this helps and best of luck with your goal! I am curious to see other markets out there that may have this same type of potential as I have only invested and have experience for the most part in Florida.

What's the upside in Ocala, what's the industry there, demographic, what big cities is it near? Is it going to demand the population versus other competing Florida cities?
The industry is made up of a mix of Distribution, Manufacturing, Healthcare, Construction, Government and the Thoroughbred industry. Marion County, where Ocala sits as the main city and county seat, is the horse capital of the world.
Marion County has a population just shy of 400,000 and is the 19th largest County in Florida out of 67 total. Geographically it is strategically positioned reaching 34 million people.... 40% greater reach than the I-4 corridor which spans from Tampa, through Lake Land, Orlando and then ending in Daytona (coast to coast). With lower operating costs and a better labor market dynamic, it has attracted many large companies to the area and serves as a major distribution Hub to the Southeast United States.
Amazon, FedEx, Orlando Health Care, Lockheed Martin, Dollar Tree/Family/General, Autozone, AT&T, Chewies are some of the companies that have all moved major operations here and continue to invest in the area. The completion of the Florida Crossroads Commerce Park on Hwy 484 in Marion Oaks will provide over 3 million square feet and 6500 jobs alone. Dollar Tree also has an additional 1 million square sqft in development at the moment and will be one of the tallest structures in Marion County at 145ft.
The Villages, a master planned community with a population around 100,000 is a major anchor to the area for the healthcare, retail, service and the hospitality sectors of employment. It is a newly developed community for mostly 55+ and is located in Central Florida with over 60,000 homes (most built in the last few years) encompassing 80+ sq miles from Marion County in the North, through Sumter County to the South and West and into Lake County to the East. The Villages is located 60 miles Northwest of Orlando off the turnpike.... and 20 miles South of Ocala off I-75. Since most of the workforce that works in this community is under 55+, they have no choice but to find housing in the surrounding areas like Marion Oak, Belleview, and Silver Springs Shores in Marion County.
Marion County remains under the Florida median home value of $410,000 sitting at $270,000 however that dynamic is shifting as the Ocala market matures. There are certain areas of Marion County that are growing much faster than others, therefore appreciating more and having more upside. I included a picture below to show what some of the growth pockets look like.
The rent /price point ratio is much higher compared to many markets in Florida and you can typically find 1% deals if you are diligent. With high yield, you do not sacrifice growth, this has caused a large investor interest in the area with a high percentage of the sales being cash. On the renter/ owner side, because of its strategic position, attractive prices and a lot of new construction options, this market has grown tremendously from areas like Orlando, Tampa and Jacksonville which are all less than 2hrs away. They have all expanded outwards and the next best option is Ocala. The workforce trends from COVID has also given people the opportunity to work remotely/from home and this area has seen a lot of growth from other areas of Florida and out of state where cost of living is much higher. People can get a new construction house with a bigger yard, work from home and save a lot of money by doing so but not sacrifice their quality of living. This has added to the demand for good quality affordable housing for people to purchase or rent. With cheaper and more accessible buildable land compared to other markets (which have run out of room) new construction fills this need in the market.
The infrastructure is already established in Ocala, with Interstate 75 running from Tampa, through Ocala and then running into the Southeastern states. The turnpike runs from South Florida, through Orlando and then into Ocala connecting on I-75. The turnpike is also scheduled for a road expansion in the next few years which will continue west through I-75 opening up the Southwestern quadrant of Ocala .
1 Reply
Drew C Grossman
Investor · Jacksonville, FL · Member since 2019 · 135 posts · 106 votes
3y
@V.G Jason
Here is a whats going on in the first phase of crossroads commerce park.
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Drew C Grossman
Investor · Jacksonville, FL · Member since 2019 · 135 posts · 106 votes
3y
Quote from @Mitchlyn D.:

Quote from @Drew C Grossman:

Hi @Anna Sam,
Have you looked into Ocala, FL on your goal to find some cash flowing Multifamily/ Apartments? I have worked and analyzed deals, on and off market in virtually every part of Florida and have not come across a sub market with existing cash flow/equity upside as Ocala. There are certainly areas you want to be and areas you don't however the target markets we are operating in have a need for entry level "affordable housing" and small multi family fills this demand. I've been investing here for the past few years and have built a little over a dozen new construction single family homes and acquired a Self Storage building so am very familiar with the dynamics/management/renter quality ect and have been very pleased. Currently building a handful of 2,000SqFt Duplex(s) for under 250k all in project cost with a market value of $425k when built (comps). Why is this opportunity so good? We have a builder relationship that we have previously worked with has presented opportunity to build block properties at a very reasonable price per SqFt. The materials and labor side of the equation has cooled off tremendously since last year which is why the price to build makes sense. What is the catch....the biggest hurdle is having to pay cash in a draw schedule up front compared to using tradition financing which we have previously capitalized on. Essentially the builder is using our money to build vs there own which is why we are able to build for 60% of market value. Typically most people that do these deals are middle man flippers but in this case for us, we are keeping as long term rentals because the cash flow is great however this may be a great market to house hack or Brrrr with the amount of forced equity day 1 or potential finance down the road when rates cool off. You will find a handful of New Construction and even decent resale Multi Family deals on the MLS and will pay between $150-$180 a sqft for the older resales and $185-$225 a sqft for new construction depending on size, specific location, finishes ect. With this builder, we are building all in (with land) at $125aSqFt. These 2,000 SqFt 4/4 models rent out for $1500+ a side / over $3000+ of gross monthly income per duplex. For reference, annual Taxes and Insurance are $3,400 and $1,100 respectively for each Duplex.
Hope this helps and best of luck with your goal! I am curious to see other markets out there that may have this same type of potential as I have only invested and have experience for the most part in Florida.

@Drew C Grossman With the build to rent model, in this Market, are you concerned that you 'may' not get the appraised value you are hoping for? Or is that Market essentially hot overall so you don't have the appraised value issue?
The pockets you would want to invest in have a large volume of of recent and past new construction sales which support appraisals. It’s certainly worth noting that 6months ago some of the properties we work with were selling for around $225 / sqft and now selling for $210 / sqft. You definitely want to consider an overall softening economy but for many reasons i believe this market is a little more shielded from a declining economy than let’s say Orlando or South Florida. You still need to be conservative in your ARV based on comps however I have not delt with any appraisal issues.
0 Reply
Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Cleveland of course, 10% or better NET caps based on cash purchases are to be had,
All the best
1 Reply
Patrick DruryBusiness Member
Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
3y
@Anna Sam
If you are looking for markets with strong cashflow you should look into the Cleveland OH market. As mentioned previously on this thread, the best opportunities will be off-market deals. So it would be advantageous to find agents that source off-market deals or try to source them yourself if you have time.
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Mitchlyn D.
Rental Property Investor · Jacksonville, FL · Member since 2015 · 343 posts · 142 votes
3y
Quote from @Drew C Grossman:

Quote from @Mitchlyn D.:

Ok, that makes sense. My main concern is if the appraisal does not come back as expected. But to your point, due diligence and adding padding around the construction cost when analyzing will effectively reduce the appraisal risk.
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