Which market should I invest in first?

Question

So I have narrowed down my market search to close my first multifamily deal (rental property) and I have came up with these 4 cities. My budget is under 150K. I was wondering if I could get you guy’s input about my picks and maybe guide me to explore other markets better for my strategy and target.

Salt Lake City, UT

Phoenix, AZ

Jacksonville, FL

Seattle, WA

Salt Lake City, UT

Phoenix, AZ

Jacksonville, FL

Seattle, WA

Alex G. · Answer

A Seattle MF for under 150k?  You got to be kidding.

Michael Haas · Answer

@Kameron Holloway just to clarify - you have $150,000 cash to invest, or you are looking at properties under $150,000?

If its the former there are some great options in Seattle, Tacoma, or Renton. If its the later you need to sit down at your computer and research a few of those cities for 30 seconds to see how unrealistic this is haha.

Anthony Hurlburt · Answer

There is not one property in Salt Lake City that is under 150K that is not a mobile home.

Brian Briscoe · Answer

@Kameron Holloway

I had a SF rental in SLC for many years. It’s value went up significantly in the last 3-4 years, so I sold and made a boat load.  I considered SLC for multifamily, but I decided on other markets because it seemed like the competition in SLC was buying off of the premise that rents would continue to grow at >4% and values will continue to increase at the rate they have over the past few years. My outlook isn’t as rosy.

Bottom line, SLC is my home town (Go Utes) and I’m investing in the Carolinas (my wife’s home town).

Danny Randazzo · Answer

@Kameron Holloway invest in the city that will meet your goals. For me, I like Jacksonville out of the four markets you list because it has a lot of job and population growth. I can’t speak to the other three because I don’t invest there.

Sarah Shockley · Answer

@Kameron Holloway I don't recommend buying a MF property anywhere for less than $150k, unless you have another $150k to put into it for renovations. My experience is "You get what you pay for!" That being said, you could get a decent single-family property under $150k in Jacksonville.

Andrew Gammon · Answer

It seems to me like in most of these markets it would be really challenging to find a deal for 150k or under. What I would do is find a good agent that knows how to work with investors, and hopefully they can set you up with good lenders that may be able to help you find some room in your budget for more. I know for at least the Salt Lake City market you wouldn't be able to find even land for 150k or less. My suggestions would be to find another in state investor that can help guide you, and if they have the money, you put in the work, and time, so it is valuable to them as well. Good luck to you, and feel free to reach out if you have any questions!

John Casmon · Answer

@Kameron Holloway I'm a huge advocate of picking the right markets to invest, but nothing beats the right team. For the size of the deal you are seeking, you need a strong, trusted team. Find that first. Of the markets you mentioned, the only that concerns me at a high level is Seattle due to the tenant-friendly regulations and high prices.

JAX is a great market that we're invested in. Salt Lake is seeing phenomenal growth with strong fundamentals. Phoenix is seeing strong rent growth.

Caleb Brown · Answer

@Kameron Holloway

What made you choose those markets instead of local ones? Those seem like strong markets but price is high.

Aaron Nelson · Answer

Hi @Kameron Holloway - Are you looking to invest $150K out of pocket or is your purchase price budget $150K? If the latter, you will be hardpressed to find anything near Seattle that meets your criteria. Best of luck with your search!

Which market should I invest in first?

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