Best multi-family locations???

Question

Where are the best cities/towns to invest in duplex, triplex, or fourplex right now?

Travis Watts · Answer

@Taylor Kochenderfer Good question. I invest in slighter larger multifamily deals (200-600 units) and I have been investing in Jacksonville, Tampa and the suburbs of Dallas...lately. Best of luck!

Danny Randazzo · Answer

@Taylor Kochenderfer our group buys 150 unit plus multi family properties in the southeast US in markets such as Charleston SC, Greenville SC, Raleigh NC, Charlotte NC and select cities in Florida. We like these markets because of the job growth, population growth, and projected rent demand/increases for the upcoming five years. You’d probably have great opportunities finding your size deals in these markets. Good luck.

Dan Handford · Answer

I just wrote an article on my BP blog about top and bottom markets for rent growth and this would be a good place to start: https://www.biggerpockets.com/member-blogs/10864/87166-top-and-bottom-us-multifamily-rent-growth-trends-as-of-sept-2019

Matthew Meikle · Answer

@Taylor Kochenderfer This depends on your access to capital and level of credit, whether you're after long term appreciation over short term cash flow, and your risk tolerance. There is no one size fits all answer.

Will you be living there? (ie House hacking) If so, you can narrow your search to cities/neighborhoods you'd feel comfortable living in.

If you're not living there, how will you manage the property? For example, if we look at Peoria, Milwuakee, or Chicago, the prices are low, but the management could be difficult from a distance without a good team.

But, to better answer your question, search for "price to rent ratio" as that will likely help narrow your search. Also, look into the owner occupied FHA loan option for up to four units if this is going to be your route.

Good luck!

Matthew Meikle

Tj Hines · Answer

@Taylor Kochenderfer there are a ton of great performing markets out there. But for something this small I would concentrate in my own backyard and focus my marketing efforts to score a deal in the path of progress. You can easily locate the path of progress by contacting the local economic development committee to get localized opinion on where the current paths of progress are located

Jonathan Greene · Answer

Makes sense @Taylor Kochenderfer, thanks for the extra info. If you go where population growth will increase steadily, the market will usually respond to that. A lot of the hot markets are past so I like to look at adjacent markets that haven't hit yet that border those better markets, but it is so state-dependent. Some people focus hard on the numbers, but if I were in your shoes I would be researching those up and coming towns that get featured as best small towns. A nice uptick usually comes a year or so after a small town in an affordable area gets a spotlight like that.

Taylor Kochenderfer · Answer

@Jonathan Greene

Thanks for the reply! I left this post vague hoping for some diverse responses.

I intend to sell my home and leave my job soon. Assuming the housing market holds, I will have cash in my pocket that I'm prepared to invest in real estate. I live in a relatively expensive market that doesn't match well with my goals. I plan to move to a new city, put together a team of the "core four" and start investing. Once I get the ball rolling, I will likely move back to my home state but plan to continue investing long distance.

I'm focused on buy and hold investing in small multi-family (duplex, triplex & fourplex). Overall, I'm looking for an area that will provide a reasonable cap rate, decent population growth, and affordability. Economic growth and job creation are also a plus. I'm not focused on gaining appreciation on the property, although that is always a bonus.

I'm prepared to move anywhere in the country. Therefore, I'm looking for the best town/city to start my real estate portfolio. I have a few places in mind, but before I start zeroing in on the exact area and start making contacts, I'd appreciate the input of fellow investors with experience!

Taylor Kochenderfer · Answer

@Dan Handford

Great information! Thanks for the reply!

Matt Castle · Answer

I'm biased, so please that into account, but I'm seeing great #s in Knoxville, TN. One of the few places with a strong economy, growing population and can still buy under 100k/door.

The one issue is the Class A & Class B rentals need to look the part. Can't be some 20yrs old interior design to get top $$ b/c we do have good inventory for renters to select from.

Scott Morongell · Answer

@Taylor Kochenderfer real estate is hyper-local. Start investing where you know the market very well because it will allow you to buy right. The "grass" isn't always "greener" elsewhere.

Best multi-family locations???

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