I am trying to isolate a market to learn, and ultimately in which to specialize. My primary interest is buy and hold 10 - 50 unit multi family apartment complexes. I am looking for steady growth with a diverse economy, rather than a more cyclical market. My short list is Jacksonville, FL, Memphis, TN, Chattanooga,TN, or Dayton, OH. I welcome any advice, but more specifically, I would like to hear from anyone who has had experience with this type of investing in smaller metro areas (Dayton, Chattanooga, etc.) and whether they have been limited in finding lenders who will work in smaller markets such as these. Easy travel from the S.E. is also a consideration.
@Darren Mesibov lenders are giving out capital anywhere the numbers work. Check out @Omar Khan blog and a few other cool cats in the field to help you zero into your zones of preference.
My choices depend on a variety of factors such as market fundamentals, job growth, demographics, what can residents pay for rent based on their median income and much more.
I, for one, don't invest in areas with a population less than 250K and we're about to raise that number soon. I also look at the Starbucks map to measure the amenities factor and so much more. Study your markets thoroughly before you zero into a sub-market and property. Looking at out of state markets is a good idea . From my perspective, having access to all the tools available on the internet, it's not much more difficult than doing it in your own neighborhood. The spreadsheet needs to pencil out in both scenarios.
@Darren Mesibov , we have an apartment complex outside of Dayton, OH and also in TX.
All the markets you mentioned are relatively well known and you will not have issues finding lenders if you have a good deal and some experience, net worth and liquidity.
@Darren Mesibov lenders are giving out capital anywhere the numbers work. Check out @Omar Khan blog and a few other cool cats in the field to help you zero into your zones of preference.
My choices depend on a variety of factors such as market fundamentals, job growth, demographics, what can residents pay for rent based on their median income and much more.
I, for one, don't invest in areas with a population less than 250K and we're about to raise that number soon. I also look at the Starbucks map to measure the amenities factor and so much more. Study your markets thoroughly before you zero into a sub-market and property. Looking at out of state markets is a good idea . From my perspective, having access to all the tools available on the internet, it's not much more difficult than doing it in your own neighborhood. The spreadsheet needs to pencil out in both scenarios.
I'm in Chattanooga TN. Great market although it's gotten a lot more interest in recent years like many other markets. There is no shortage of lenders here and if the deal is good enough you'll have no trouble getting financing assuming you are experienced and have a decent enough personal financial statement. One bit of advice though. Some lenders won't touch out of market guarantors. There are plenty that will however. This is a credit risk to them more than anything else. They figure, and probably correctly so, that going after the assets of a borrower in another state is going to be costly and uncertain. Secondly, every lender I know is hungry for deposits. Expect to have a move a decent chunk of money over if you plan on getting a loan from one as more and more (at least here) are making it conditional.
Getting money from banks if you are out of state will be very hard depending on the property size. If you are buying properties for under $1.3mm (loan amount under $1mm), then you will only have a few open banks that will lend. If you are buying over $1.3mm, then your options open up to many more lenders. Dayton, OH and Memphis are 70% LTV cities for Fannie/Freddie (I think).
Not sure if there's a market that is not cyclical, but I believe you on the right track. A well diverse economy through different job categories will perform better during a downturn.