Las Vegas, NV · Member since 2016 · 25 posts · 8 votes
Up until this point I’ve bought and held residential properties, all cash. I’m ready to start expanding into multi family and wanting to hear recommendations for what cities long term, buy and hold, investors look at?
What is the criteria to determine a city is viable and what resources do you use to research and confirm?
To take this thread to the next step, these are the cities to research.
Little Rock -- hot right now, we have had 4 other Memphis TK providers follow us here. Well not really follow since we are locally owned
Memphis -- a household name for investments -- several TK providers operating here
Birmingham, AL -- cash flows good--seems like this market has come on strong the past 5 years
Jackson, MS -- I hear a lot of investors going here and getting good cash flow. Personally, not a big fan of the city in general, but that is just my opinion of the state of MS. I am sure this will get me scolded by the MS faithful here
Columbus, OH -- I see good TK providers operating here
Houston/Dallas -- I see these on a lot of the affiliate websites, but my feedback is property taxes are high and cash flows are not good.
Indianapolis -- this one has been around for a while
Cleveland -- I know zero about this market, but James Wise is active on BP. He would be the resource for you
There are quite a few multi-market 3rd party providers who can present several other markets. If you are on the fence, they could help you find the market that is right for you.
@Trent Lee Always best to start in your own back yard, per se. So I would look at opportunities in Las Vegas and Henderson first, as close by is always better in my opinion on a real estate investment for the first timer.
Landlord friendly would be my first criteria as the last thing you want is for your tenant to have the upper hand when they decide to default on their lease. Second would be picking a city where renters in the market are increasing and making sure the homes in these areas are desirable areas for people to live. The key here is "desirable" area, which in most Mid-West, Southern markets will be around (in most cases) a price point of $80,000 for a 3 bed 2 bath home. Just don't fall for the trap that all big cities have and that is the $60,000 home that someone is saying is a good area--all big cities have these types of homes and more often then not are not C class, but D class. Often over looked is low property taxes. If your property is vacant, low overhead will help with that vacancy cost. As Chase Louderback mentioned, avoid declining cites; simply make sure something positive is happening economically.
Trent, just noticed you were asking for recommended cities. I was going off your first post which was talking about criteria. Sorry about that, but that stuff is good to know too. The cities I own in. Memphis, Little Rock and Knoxville. All have treated me well. Of course, those cities are easy for me because I live in one and own businesses in the other 2.
Hi @Alex Craig I actually have a couple properties from you guys and they are treating me well in LR. When you say Knoxville your talking about TN or Knoxville, AR ? Cheers and thanks for all the good work @ Memphis Turnkey.
@Alex Craig what do you think about c class multi family? I’m looking mostly in the mid west market. That’s where most of my properties are as I can’t get a decent return on the west coast as easily as mid west.
@Trent Lee I am fine with C class MF. But you want to avoid D class. More often then not, local sellers will tell you, "solid C class" when the reality is the unit is a solid D class. A solid C class will attract individuals who have the same underwriting profile as an individual looking to move into a C class home, the only difference, for one reason or another, they do not want a SF home. Did you ever see the movie Lean on Me with Morgan Freeman? If not, google "Lean on Me opening scene." That is what you are getting with D class. Huge fine line between the 2--and I would make absolutely sure that the MF you are looking for is C class.
@Dan Ruiz Dan, good to hear from you. I am referring to Knoxville, TN. I own a restaurant and figured I would own RE up there too. Eventually I came to the conclusion that it took up to much of my time and only bought 2, one of which I sold to a waitress who works for us. The other I rent to another waitress on section 8. I will say, section 8 works great up there.
@Dan Ruiz. So I was not aware there was a Knoxville, Arkansas. You will have to google it and see the house that comes up...pretty funny. Doesn't look like a great place to invest and a little far from our Little Rock office to invest.
@Alex Craig HEHE, the only reason I knew Knoxville, AR was that I drove on the I40 from Oklahoma to Memphis and remember stopping there... funny. I will look up Knoxville TN to see the SFH there. thanks again :)
@Trent Lee I look for cities that have the best combination of cash flow and good economic/demographic trends. Don't look exclusively at CoC return. There are a lot of markets with good cash flow but don't have a strong economic outlook which is important to long term investing. Look for the following:
1, Good population growth with positive net migration 2. Job growth in divers, modern industries 3. Positive cash flow and CoC return 4. Favorable landlord/tenant laws 5. Low to moderate property taxes and insurance 6. Business friendly state and local government that is investing in economic development
I'm OKC loyal all day long. 1% rent to value ratio is easy to find with the right connections off-market. 1% taxes, 60-80k for C class which pretty consistently provides 8%+ cap rates. It is all single family though. Under 10% of residential properties are above one unit
To take this thread to the next step, these are the cities to research.
Little Rock -- hot right now, we have had 4 other Memphis TK providers follow us here. Well not really follow since we are locally owned
Memphis -- a household name for investments -- several TK providers operating here
Birmingham, AL -- cash flows good--seems like this market has come on strong the past 5 years
Jackson, MS -- I hear a lot of investors going here and getting good cash flow. Personally, not a big fan of the city in general, but that is just my opinion of the state of MS. I am sure this will get me scolded by the MS faithful here
Columbus, OH -- I see good TK providers operating here
Houston/Dallas -- I see these on a lot of the affiliate websites, but my feedback is property taxes are high and cash flows are not good.
Indianapolis -- this one has been around for a while
Cleveland -- I know zero about this market, but James Wise is active on BP. He would be the resource for you
There are quite a few multi-market 3rd party providers who can present several other markets. If you are on the fence, they could help you find the market that is right for you.
To take this thread to the next step, these are the cities to research.
Little Rock -- hot right now, we have had 4 other Memphis TK providers follow us here. Well not really follow since we are locally owned
Memphis -- a household name for investments -- several TK providers operating here
Birmingham, AL -- cash flows good--seems like this market has come on strong the past 5 years
Jackson, MS -- I hear a lot of investors going here and getting good cash flow. Personally, not a big fan of the city in general, but that is just my opinion of the state of MS. I am sure this will get me scolded by the MS faithful here
Columbus, OH -- I see good TK providers operating here
Houston/Dallas -- I see these on a lot of the affiliate websites, but my feedback is property taxes are high and cash flows are not good.
Indianapolis -- this one has been around for a while
Cleveland -- I know zero about this market, but James Wise is active on BP. He would be the resource for you
There are quite a few multi-market 3rd party providers who can present several other markets. If you are on the fence, they could help you find the market that is right for you.
Alex, good list. The only one that I would add is Kansas City,
@Mike D'Arrigo I thought about KC, but have not heard a lot about that market in a while and really do not know of anyone to refer out. But noted. Thanks!