Rental Property Investor · Long Beach, CA · Member since 2018 · 28 posts · 6 votes
Hi BP,
My name is Brandon and I am about to invest in the mid west from LA. If you don't mind sharing, I would love to get your advice on where I should invest in. Maybe some spots on good schools, malls, big companies, etc. I plan to invest with around 100k so maybe that can help show me the way. If you know if any multi family (2-4 units) areas that would be a great help to me. I have been struggling to find places to invest in because there are so many opportunities and I want to choose a good market. Maybe some insight on what markets you already are investing in. Thinking about Kansas City.
PS, I would love some city recommendations in any states if you don't mind. Maybe places you are currently investing and maybe want to invest in. Looking for Low-150k multifamily areas with high rent vs buy ratios.
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
7y
There are a lot of good markets to consider. The most important thing in my opinion is making sure you can find good property management. That will make or break your deal. Here are a few articles on top performing markets and research on how to pick a market
Realtor · Pasadena, CA · Member since 2017 · 27 posts · 16 votes
7y
I'm in a very similar situation. When I run the #'s on buying either a couple higher end SF's or 2-4 units OOS in one of the markets already mentioned here or similar, the chunk of cash I have to invest will be gone quickly and the small returns of $200 ish per month each property won't make a dent in my financial goals. I like the idea of partnering with a more experienced investor on a larger multi fam but I'm unsure where to start that process. I've done so much research and feel like I've ended up at a dead end unsure which way to proceed. I certainly don't want to jump in just because I'm getting an itchy trigger finger.
Apartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
7y
@Brandon McLendon you can do it alone but make sure it fits with your goals and unit size. You can probably only handle one 100 unit+ property at a time because you will be doing every task from finding the deal, building relationships, negotiating with the broker, finding investors, working with the lender, working with your attorney, communicating to everyone, raising money, more communication, more raising money, completing due diligence, completing unit walks, raising more money, having more investor conversations because an investor can't invest now, then finding more money, then closing the deal, then on boarding your management team, doing asset management, fixing a problem, more communication, and the list goes on while you still only have one property and limited new deal flow since you've been busy doing all tasks previously stated. (@Dan Handford did i miss any tasks?) Good Luck!
@Jennifer Perich I have some previous but not recent experience with single-family and small multi family properties. I agree with you about the Cash flow from smaller deals being rather insignificant for the time invested, but I may take the plunge anyway. I view the smaller investments as a lower risk way to take action and get involved as I continue to gain experience and network. The real value in these sized investments may not be the actual cash flow from the property so much as the experience gained on the path to larger investments. Think of it as an entry level job in a new career.
Realtor · Pasadena, CA · Member since 2017 · 27 posts · 16 votes
7y
@Darren Mesibov that's a good way to look at it. I also have previous experience with SFR and small multis which I owned before the crash (not OOS). If you can start small with lower risk to gain experience, test a market and a team etc then I think you're right about it being a step in the right direction. What I'm getting hung up on primarily is the ability to scale quickly after those first few properties are purchased. That's where BRRRR would come in handy.
@Jennifer Perich I have the same concern about not being able to scale quickly in the beginning. I ultimately concluded that the time to build slowly in the beginning might be worth it. Once I know the market, have the team, and make some early mistakes I believe I will be able to combine those experiences along with my network, some creativity and income from my W2 to make things happen very quickly. I agree that some people are able to do well with BRRR, but for me it's not a good fit due to the shear amount of time and work involved. I think that time can be spent in a more efficient way. I'm also looking at areas away from my home market, which can complicate the BRRR process. I'd rather come up with a bit more cash up front and spend my time networking, learning the market, and finding deals.
Rental Property Investor · Elk Grove Village, IL · Member since 2014 · 31 posts · 25 votes
7y
A good book on researching potential investment growth areas is "Emerging Real Estate Markets" by David Lindahl. I agree with the earlier posts regarding some of the commercial real estate brokerage firms research like Marcus & Millichap, IRR, etc., which are great sources for annual, semi-annual & quarterly analysis. In addition to those sources some of the area monthly & weekly business publications, & the business sections of local newspapers can provide solid current information.
Realtor · Pasadena, CA · Member since 2017 · 27 posts · 16 votes
7y
@Darren Mesibov Jacksonville FL is at the top of my list. There are things I like about Atlanta, Chattanooga TN and Huntsville AL too. Have you read Long-Distance Real Estate Investing By @David Greene yet? I'm about 3/4 way through, and I would recommend it.
There's a free 90 min course on Udemy by Neal Bawa called Best Cities and Neighborhoods for Real Estate Investing.
@Jennifer Perich, I have not read it yet, thanks for the recommendation. I just ordered it.
I am in the Southeast, so I have considered some of the same markets.
I thought briefly about Chattanooga and Jacksonville. In the right part of the market cycle, I think there are some very good arguments for Jacksonville or St. Pete.
I wouldn't consider myself very educated on Atlanta, although it's easy to get to from where I live. Would you mind sharing your thoughts on pros vs cons in that market?
Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes
7y
It may not be a bad idea to do a joint venture with a few locals just to scale things up and track the process. It’ll be good education for everyone involved.
My name is Brandon and I am about to invest in the mid west from LA. If you don't mind sharing, I would love to get your advice on where I should invest in. Maybe some spots on good schools, malls, big companies, etc. I plan to invest with around 100k so maybe that can help show me the way. If you know if any multi family (2-4 units) areas that would be a great help to me. I have been struggling to find places to invest in because there are so many opportunities and I want to choose a good market. Maybe some insight on what markets you already are investing in. Thinking about Kansas City.
PS, I would love some city recommendations in any states if you don't mind. Maybe places you are currently investing and maybe want to invest in. Looking for Low-150k multifamily areas with high rent vs buy ratios.
Thank you for your consideration,
B
Brandon,
Look for the top cities with high population growth, employment growth, and income growth. There are several metrics that you can use to narrow down your search. Eventually, you want to narrow it down to a couple of cities that you are affiliated with - having friends or families living in that city, experience living there, or simply somewhere that's driving distance from you.
If you like, I can share my market study report with you. It has metrics for 20-30 cities, and I narrowed it down to (4) cities that I really liked. I ultimately chose Phoenix because it's driving distance from LA.
Lastly, where do you live in LA? Perhaps we can meet up for a coffee or sometime.
Msg me on biggerpockets if you are interested in the market study :)