Which is better to invest in 4-plex Phoenix or Austin?

Multi-Family and Apartment Investing
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Which is better to invest in 4-plex Phoenix or Austin?

Tracie J.
Denver, CO · Member since 2017 · 23 posts · 4 votes

Hi there, I'm looking at purchasing a quadplex. I'm trying to figure out which is the best, market PHX or Austin. Any opinions on which is the better market to invest in, pls?  Thank you, Tracie

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Brandon L.
Real Estate Agent · Falls Church · Member since 2012 · 2k+ posts · 1k+ votes
7y

@Tracie J. I would pick the market where the deal fits your goals. You will get every answer you can imagine on the forum. If you have clear goals the choice will become easy

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  • Chase Louderback
    Real Estate Agent · Luray, VA · Member since 2016 · 459 posts · 293 votes
    7y

    What are you looking for specifically in your market?  What are your goals?  What is best for one individual may not be for another.  

    This research report on Multifamily markets should help: https://www.berkadia.com/wp-content/uploads/2018/12/Berkadia-2019-National-Apartment-Forecast.pdf

    1Reply
  • Tracie J.
    OP
    Denver, CO · Member since 2017 · 23 posts · 4 votes
    7y

    Thank you for sharing the article, Chase, I appreciate.

    0Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    7y

    @Tracie Janoska Austin

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  • Wes Blackwell
    Real Estate Agent · Phoenix, AZ · Member since 2016 · 738 posts · 1k+ votes
    7y

    @Tracie J.

    Totally going to depend on exactly what you're looking at and what your goals are. Don't know much about Austin but here's what I can say for Phoenix:

    Arizona had the fourth highest percentage of job creation in the country last year, just behind Nevada, Utah and Idaho. Jobs = Demand = Appreciation & Steadier Markets

    Arizona was also the fourth fastest state for population growth last year. Big part of that reason is California is a crazy state that's exporting their middle class like crazy for affordable housing, and we're the #2 retirement destination in the US second only to Florida. 

    And no offense, but what will the boomers bring? More jobs in healthcare. Phoenix already has a physician shortage due to the high demand, and millennial nurses are just now having kids and buying their first homes. 

    There's all sort of other factors too (if you have family in each state or another reason to visit, landlord laws, etc.) but primarily I would focus on the economies of the two states and projections for the future over the next 5-10 years. 

    1Reply
  • Greg Scully
    Rental Property Investor · Johnson City TN · Member since 2016 · 386 posts · 271 votes
    7y

    @Tracie J. - Both markets have strong fundamentals. So generally speaking you might do fine in either market.  

    If you've identified two distinct properties, the specifics of those sub-markets, the property specifics and the financials associated with each should be what drives your decision.

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  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    7y

    Well a fourplex in either of those markets isn't going to cash flow. So is it appreciation you're going to be banking on? I'd compare which market has the least negative cash flow and which one has the best appreciation potential and go off of that.

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  • Brandon L.
    Real Estate Agent · Falls Church · Member since 2012 · 2k+ posts · 1k+ votes
    7y

    @Tracie J. I would pick the market where the deal fits your goals. You will get every answer you can imagine on the forum. If you have clear goals the choice will become easy

    1Reply
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    7y

    I have invested in both markets during my career and you have certainly selected to very good areas to compare. I have invested in Arizona from Flagstaff to Casa grande and everything in between.I have also invested in multiple areas in Texas and am not as familiar with Austin. When I did my research, it was the most expensive area in the state for single-family residences , strictly going by median price.

    I agree with most of the other posts. It depends on what your goals, strategies, plans, reserves, and what each for Plex is actually bringing to the table for you.

    0Reply
  • Tracie J.
    OP
    Denver, CO · Member since 2017 · 23 posts · 4 votes
    7y

    Your feedback has been has been helpful. Thank you all for your insight, I greatly appreciate!  

    0Reply
  • Michael DangPro Member
    Rental Property Investor · Houston, TX · Member since 2015 · 454 posts · 273 votes
    7y

    There are other great markets besides those two.  

    0Reply
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    7y

    I agree with Michael. I have often said, take a map of Texas and hang it on your wall. Step two – throw a dart. Step three – buy property wherever your dart landed!

    1Reply
  • Tracie J.
    OP
    Denver, CO · Member since 2017 · 23 posts · 4 votes
    7y

    LOl, will do!

    0Reply
  • Gina SternPro Member
    Investor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes
    7y

    @Tracie J. I here Austin is a great place to invest.

    [email protected]561-430-2616
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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    7y

    @Ali Boone I guarantee that people have bought fourplexes in both of those markets over the past year that cashflow. That's a pretty bold blanket statement. I bought a two unit in Austin last year that cashflows well, didn't look at fourplexes but I doubt theres a 0% chance you can find one with positive cashflow after a decent rehab. There are plenty of fourplexes in North Austin.

    [email protected]512-888-9122
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  • Aaron Gordy
    Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
    7y

    @Jordan Moorhead@Ali Boone There are fourplexes that cash flow in Austin on the market currently. Fyi

    1Reply
  • Mark Lenning
    Specialist · Laguna Niguel, CA · Member since 2017 · 6 posts · 2 votes
    7y

    From an overall multifamily standpoint, I would say that Austin is a solid market, but I wouldn't expect above average returns. Phoenix has very strong rent growth, is also attracting a lot of businesses and is far behind Austin in this economic cycle. Meaning there is more room for ROI.

    0Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    7y

    @Aaron Gordy @Jordan Moorhead Cool if they cash flow. Austin is great. Either of you have a sample property that shows one that does?

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  • Aaron Gordy
    Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
    7y

    @Ali Boone 501 hardin ct 78753 closed recently. Purchase price: $404k.  Rent: $3425. Property tax $6753, for example. 

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  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    7y
    Originally posted by @Aaron Gordy:

    @Ali Boone 501 hardin ct 78753 closed recently. Purchase price: $404k.  Rent: $3425. Property tax $6753, for example. 

    How in the world does that property cash flow?

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  • Aaron Gordy
    Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
    7y

    @Ali Boone What are your inputs? I am using real market driven info. That investor went conventional on that property which means 25% down. 30 year amort int rates on investment mortgages nowadays are 5%. There is significant added value play to be had with that property as well which is why it was bid up by $5k over asking price. 

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  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    7y
    Originally posted by @Aaron Gordy:

    @Ali Boone What are your inputs? I am using real market driven info. That investor went conventional on that property which means 25% down. 30 year amort int rates on investment mortgages nowadays are 5%. There is significant added value play to be had with that property as well which is why it was bid up by $5k over asking price. 

    I'd have to know all the numbers to run an actual cash flow analysis

    0Reply
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