Markets seeing success atm?

Member since 2023 · 9 posts · 9 votes

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!

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Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

Quote from @Maytal Hess:

I have about $300k to put down so I wanted to get the max number of units possible. The lender I am working with only requires 20% down so price point is around $1.5M bc I have a brother in law who will go in on the deal if I find something worthwhile.

The elephant in this room is changing the vesting.

While everyone is trying to get you to their market, you're potentially blowing up your entire exchange. If you solely own the relinquished, ya better solely own the replacement.

All these 'cash-flow ' markets are the same. Deploy your advantages. Where you know. Who you have. And keep your BIL off title for cripes sakes.

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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
2y
Depends where you are. We're having success in Texas's major markets. Where are you located? How much equity will you be deploying and what type of assets are you looking for?
2 Reply
Bradley Jernigan
Investor · Member since 2018 · 53 posts · 52 votes
2y
Hello @Maytal Hess, are you interested in investing in the South? Texas, Georgia, and Florida’s major markets are having tremendous success with a lot of population growth.
1 Reply
Maytal Hess
OP
Member since 2023 · 9 posts · 9 votes
2y
Quote from @Taylor L.:

Depends where you are. We're having success in Texas's major markets. Where are you located? How much equity will you be deploying and what type of assets are you looking for?

I am in Denver. Really hard to make anything pencil here which is why I am looking in other states. I'd consider TX but anything I looked at there the taxes were insane, don't want to deal with insurance in FL. Guess I have to pick my poison! Lol. Haven't dove deep in Atl but would consider anything that makes sense.
0 Reply
Mark H. Porter
Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
2y
Maytal- you say you’re in the process already, have you already sold your downleg? Do you already have a broker and QI working for you on this stuff?
0 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
2y
Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!

I have only been investing in Ohio. I have been having success
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2 Reply
Anthony L Amos Jr
Real Estate Agent · Columbus | Toledo · Member since 2019 · 607 posts · 768 votes
2y
Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!
Stay in Ohio and check out Toledo.
3 Reply
Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
2y
Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!

I'm not sure what criteria you are looking for but I make a lot of posts in the Columbus forum. We are seeing strong appreciation and "1% rule" cash flow. New construction is strong. National interest from build to rent communities. All the trends of a great market.
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Maytal Hess
OP
Member since 2023 · 9 posts · 9 votes
2y
Thanks Everyone! Yes, I'm closing on my duplex Monday so I have to identify something quickly now. I really had my heart on doing a bigger deal but I might end up in some duplexes and triplexes I guess. I have about $300k to put down so I wanted to get the max number of units possible. The lender I am working with only requires 20% down so price point is around $1.5M bc I have a brother in law who will go in on the deal if I find something worthwhile.
1 Reply
Mason WeissBusiness Member
Realtor · Phoenix, AZ · Member since 2021 · 523 posts · 239 votes
2y
Hey Maytal, I am seeing decent 5-10 unit properties pop up in Kansas City which is promising for both cash flow and appreciation. I would say Phoenix is always a strong market but cap rates are difficult so you would need to focus on appreciation over the next 3-7 years. Have you considered any STR's because I know many investors buying recently who are generating strong cash flow in the AZ market.
[email protected]480-818-7745
1 Reply
Zachary Inman
Real Estate Broker · Indianapolis · Member since 2023 · 11 posts · 9 votes
2y
First off, I'm so sorry to hear about the buyer that screwed you over. That genuinely sucks.

As for markets... INDIANA. It's not like it was the past few years, but I'm seeing deals that pencil all the time for clients. Don't take my word for it, google "top multifamily markets 2023," and you'll find report after report talking about central Indiana's strong fundamentals.

The gist is this: high population growth due to low cost of living and strong business environment is bringing in a steady stream of renters. This combined with a relatively low supply creates a very respectable multifamily sub-market.
1 Reply
Evan HoppleBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
2y
@Maytal Hess

I invest in Columbus OH real estate, tons of growth ahead for the market

[email protected]614-924-8151
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Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
2y
Invest in a market that you understand; better yet - one where you have an unfair advantage. The biggest messes that I have seen in any investing - not just RE - is investing in something because you heard a smart person say that it was a good idea.
4 Reply
Zachary Inman
Real Estate Broker · Indianapolis · Member since 2023 · 11 posts · 9 votes
2y
Quote from @Travis Timmons:

Invest in a market that you understand; better yet - one where you have an unfair advantage. The biggest messes that I have seen in any investing - not just RE - is investing in something because you heard a smart person say that it was a good idea.

This is the ideal scenario. Finding your unfair advantage is crucial, I've made a career out of tapping into mine.
0 Reply
Zachary Inman
Real Estate Broker · Indianapolis · Member since 2023 · 11 posts · 9 votes
2y
Quote from @Evan Hopple:

@Maytal Hess

I invest in Columbus OH real estate, tons of growth ahead for the market

I'm based in Indianapolis, and we have a lot of crossover with Columbus. I can second this. Similar fundamentals, Indy and Columbus are kind of sister markets.
1 Reply
Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
2y
Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!
Hi Maytal, I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!
[email protected]614-300-7535
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Maytal Hess
OP
Member since 2023 · 9 posts · 9 votes
2y
You are all amazing and I sincerely appreciate all this feedback. Not sure how to reply to each o you individually, LOL. Feeling a little special on the technology front. But again thank you so much!
1 Reply
Amy Jones
Member since 2023 · 10 posts · 3 votes
2y
I have an 8 unit in Texas on Lake Conroe, recently renovated and ready to go! STR potential in Neighborhood. Great area, lots of amenities, located inside a lakefront community.
2 Reply
Travis Biziorek
Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
2y
Hi Maytal, it's getting increasingly harder to find markets and deals that actually cash flow.
I'm extremely active in Detroit and deals are still working there. I know everyone is nuts about Ohio right now, but I'd argue Detroit is more stable and offers more upside than something like Cleveland.
3 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
2y
Quote from @Maytal Hess:

I have about $300k to put down so I wanted to get the max number of units possible. The lender I am working with only requires 20% down so price point is around $1.5M bc I have a brother in law who will go in on the deal if I find something worthwhile.

The elephant in this room is changing the vesting.
While everyone is trying to get you to their market, you're potentially blowing up your entire exchange. If you solely own the relinquished, ya better solely own the replacement.

All these 'cash-flow ' markets are the same. Deploy your advantages. Where you know. Who you have. And keep your BIL off title for cripes sakes.

4 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!

sometimes 1031 is a process of headache transfer, you had headache before in left brain, now you are trying to move it to the right brain.

I would look at it from strategic perspective anyway. For example :
1. If you 1031 from market that has cap rate of 5% to market with 7% cap rate, is this what you want ?
2. If you 1031 from market that has 6% appreciation year over year to market that has 2% cap rate, is this what you want ?
3. If you 1031 from housing market hat has $1000 PSF to a mere $250 PSF, is this what you want ?
4. what is your entire strategy anyway ? do you enjoy money ? moving headache ? tenant issue ? or what

Lot of these comes from subjective experience. So changing one investment from Kansas City to Detroit or to Ohio, would not give solution.
Thing 1031 just like delaying headache.
In my own very subjective poor opinion, 1031 is only useful when at later day, the house would be converted to primary, but again that's my personal subjective opinion, moving from A to B to C without clear needs of your objective, would go nowhere.

I can also say , just 1031 to Maine or South Dakota, without having understand of what lies in South Dakota LOL
0 Reply
Jacob Stevenson
Insurance Agent · Sioux City · Member since 2020 · 83 posts · 41 votes
2y
Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!
You can buy some great properties that clash flow really well in Sioux City with that price point. You do have to be quick with an offer though as obviously cash flow deals don't last in any market!
0 Reply
Maytal Hess
OP
Member since 2023 · 9 posts · 9 votes
2y
Quote from @Jacob Stevenson:

Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!
You can buy some great properties that clash flow really well in Sioux City with that price point. You do have to be quick with an offer though as obviously cash flow deals don't last in any market!

Appreciate you input!
1 Reply
Maytal Hess
OP
Member since 2023 · 9 posts · 9 votes
2y
Quote from @Carlos Ptriawan:

Quote from @Maytal Hess:

Hi BP Fam! I am in the process of my first 1031 exchange. I had a buyer over the summer that totally screwed me. He led me on and then ghosted which put me in a totally new environment. I'm finally closing but the new interest rate is 75 bps higher than before. Story of the year, I know... Now I'm experiencing it firsthand. I have been looking in Columbus and Cleveland primarily. I was recently pointed towards Sioux City, IO which I don't know much about. I'm having a hard time making anything pencil. Curious if there are any other markets you guys are having better success in? Please help! THANK YOU, THAKN YOU, THANK YOU!!!

sometimes 1031 is a process of headache transfer, you had headache before in left brain, now you are trying to move it to the right brain.

I would look at it from strategic perspective anyway. For example :
1. If you 1031 from market that has cap rate of 5% to market with 7% cap rate, is this what you want ?
2. If you 1031 from market that has 6% appreciation year over year to market that has 2% cap rate, is this what you want ?
3. If you 1031 from housing market hat has $1000 PSF to a mere $250 PSF, is this what you want ?
4. what is your entire strategy anyway ? do you enjoy money ? moving headache ? tenant issue ? or what

Lot of these comes from subjective experience. So changing one investment from Kansas City to Detroit or to Ohio, would not give solution.
Thing 1031 just like delaying headache.
In my own very subjective poor opinion, 1031 is only useful when at later day, the house would be converted to primary, but again that's my personal subjective opinion, moving from A to B to C without clear needs of your objective, would go nowhere.

I can also say , just 1031 to Maine or South Dakota, without having understand of what lies in South Dakota LOL

I want it all! Can't I just have it all?! :-) I did need the reminder to stay in the markets that I know so thanks for that. Trying not to get desperate!
0 Reply
Maytal Hess
OP
Member since 2023 · 9 posts · 9 votes
2y
Quote from @Amy Jones:

I have an 8 unit in Texas on Lake Conroe, recently renovated and ready to go! STR potential in Neighborhood. Great area, lots of amenities, located inside a lakefront community.

Thank you! I don't know that market at all so I'm going to stick with what I know for the time being. Appreciate you!
0 Reply
Joe HammelBusiness Member
Real Estate Agent · Metro Detroit, MI · Member since 2018 · 612 posts · 666 votes
2y
Metro Detroit has what 99% of Real Estate Investors want.
Couple hundred bucks a door monthly cash flow, double digit ROI, and yes the prices appreciate and you build equity.

I cash flow $100k a year off 20 doors and have built a ton of equity in a short amount of time. Happy to send a screen shot of the portfolio to anyone who wants to see, it just won’t allow me to attach pics to a reply.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: 1%-1.4% rule deals

ROI: 10-14%

Cash flow: $250-$350/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties. We don’t buy those. We have found what works and repeat it as much as funds allow. Detroit is known as the highest rent to price ratio in the country…and we’ve found the perfect balance of price/location within the area.
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