Best states for Multifamily 50+ units! Share your experiences

Multi-Family and Apartment Investing
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Best states for Multifamily 50+ units! Share your experiences

Zaid Bender
Rental Property Investor · Member since 2020 · 36 posts · 20 votes

Investing in higher job growing states is smart and important. With what is happening with the online companies and remotely controlled businesses, many companies are leaving the expensive cities such as San Francisco, NYC and LA and moving to other states where their employees can afford a better living as their living expenses (including rent) is way more affordable.

Share your success experiences.

Thanks,

Dr. Bender

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Manny Cirino
Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
6y

  Anywhere in Central Florida you can do very well. The job growth is through the roof with many large company's stationed threw out the area. And people are steady migrating to FL everyday. The majority of my business in FL was people who where transfer/retiring in Florida because there are no state taxes only federal. And property taxes are extremely low.

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  • Manny Cirino
    Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
    6y

      Anywhere in Central Florida you can do very well. The job growth is through the roof with many large company's stationed threw out the area. And people are steady migrating to FL everyday. The majority of my business in FL was people who where transfer/retiring in Florida because there are no state taxes only federal. And property taxes are extremely low.

    3Reply
  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    6y

    Lots of great high growth markets, but obviously cap rates will be much lower in those markets.  I invest in the Milwaukee, WI area, not the greatest growth market but good yield.  Eventually I'd like to expand into the growth markets though. 

    0Reply
  • Mark Allen Kenny
    Investor · New York City, NY · Member since 2016 · 155 posts · 105 votes
    6y

    I agree.  I live in NYC and have built up a portfolio in Philadelphia.  There has been strong growth in Philly and also a lot of money leaving New York.  Especially after the landlord laws changed last year, it just makes sense to go with other markets.  I'm also looking at markets in the South East.  The population and job growth in those markets are very strong (Florida and the Carolinas are great examples of that).  You just can't find a 50-unit building with attractive cap rates in NYC or even Philly these days.

    0Reply
  • Shannon Robnett
    Developer · Boise, ID · Member since 2020 · 173 posts · 198 votes
    6y

    We are seeing explosive growth here in Idaho as the rest of the nations starts to figure out what you guys are saying about larger cities. We are also seeing job growth that many of the other areas that are "affordable" for investors just are not seeing. Lack of job growth makes for a scary situation when the music stops and this economy cools down. So while we may not have 8 CAP's we have 11-14% rent growths that are the star of the show right now.

    https://www.ktvb.com/article/n...

    https://www.idahostatesman.com...

    3Reply
  • Adam Fleck
    Rental Property Investor · Boise, ID · Member since 2010 · 67 posts · 30 votes
    6y

    Agreed @Shannon Robnett, anyone who is only comparing cap rates is missing out!  I got a triplex last year that was sitting at 4.5%, and today it's just below 9!  Appreciated 18% yoy too!

    1Reply
  • Eric Johnson
    Lender · Chicago, IL · Member since 2016 · 653 posts · 313 votes
    6y

    @Adam Fleck why would they be comparing cap rates on a 3 unit building and not market value?? Interesting. The standard of valuation changes from residential to commercial. 


    I've been seeing a lot of investors be successful in Detroit, actually. It's a matter of knowing Sec 8 and having solid PM. If you can do that, I know my clients have been seeing success there (I funded two 24 unit buildings for one client, bought them both within months of each other).

    0Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes
    6y

    @NA Bender

    Kansas City has been exploding over the last few years. Large multi is a hot commodity but cap rates depending on neighborhood is 7%-15% on average. Cerner is our largest employer and they have been growing rapidly. Many out of state money is being poured in.

    1Reply
  • Scott Morongell
    Investor · Charlotte, NC · Member since 2017 · 791 posts · 479 votes
    6y

    @Zaid Bender the best market is the one you know or have boots on the ground in already. It's also important for the market to be semi-close or easily accessible for you by plane. Real estate is hyperlocal and every growing market has good and bad pockets. If you invest in a market where jobs are moving to, so will the people. I'd look for larger MSA's and landlord-friendly states. 

    0Reply
  • Zaid Bender
    OP
    Rental Property Investor · Member since 2020 · 36 posts · 20 votes
    6y

    @Manny Cirino what cities in Florida you like to invest in?

    Thanks,

    0Reply
  • Manny Cirino
    Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
    6y
    Originally posted by @Zaid Bender:

    @Manny Cirino what cities in Florida you like to invest in?

    Thanks,

    Lakeland, Winter Haven, Davenport, Plant City, Tampa, Brandon, Orlando, Winter Park, Winter Garden

    This is pretty much Central Florida with main 3 large cities being Lakeland, Tampa and Orlando.

    0Reply
  • Zaid Bender
    OP
    Rental Property Investor · Member since 2020 · 36 posts · 20 votes
    6y

    @Manny Cirino very nice, it seems that Jacksonville is getting better too.

    0Reply
  • Manny Cirino
    Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
    6y

    It very well could be. I lived in Lakeland and worked the surrounding areas, so I could speak to that very well. Jacksonville was about a 3 hour drive for me so rarely did I  go out there far. But when I did I notice it is a split city have. Has it's good parts, but the majority seemed to be run down. I guess that means more room for value add opportunities.

    0Reply
  • Zaid Bender
    OP
    Rental Property Investor · Member since 2020 · 36 posts · 20 votes
    6y

    Do you have any properties for sale, we are looking to purchase in FL. Thanks very much Manny. 

    0Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    6y

    Don't focus so much on a state, but on an exact market and sub markets within. I can tell you to invest in Ohio, but there is a big difference between Toledo, Cleveland, Cincinnati and Columbus. I can even tell you to invest in Cincinnati, but there is a massive difference between Westwood, Walnut hills and Hyde park. 

    Get to know the city that you prefer, then figure out the best sub markets within

    2Reply
  • Zaid Bender
    OP
    Rental Property Investor · Member since 2020 · 36 posts · 20 votes
    6y

    @Todd Dexheimer Thank you, that is true. However, there is a certain migrations and job growth in some states more than others. On the microlevel though, definitely cities varies. Do you invest in Ohaio only? 

    0Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    6y
    Originally posted by @Zaid Bender:

    @Todd Dexheimer Thank you, that is true. However, there is a certain migrations and job growth in some states more than others. On the microlevel though, definitely cities varies. Do you invest in Ohaio only? 

    I used Ohio as an example. I could have used any state and the same holds true. I get net migration, but that tells us very little. You can have a state that has very little or negative growth, yet a few cities within that have very healthy growth. You can also have states with good population growth, yet cities losing population. Look at Alabama. The state is gaining population, Huntsville is seeing great growth, but Montgomery is losing population. 

    1Reply
  • Alex Olson
    Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
    6y

    @Zaid Bender It depends entirely on long term strategy. Do you want to keep buying in one market or be spread out across multiple? Do you want appreciation or cash flow or both? I would select a growing but affordable city like KC, Indianapolis, Raleigh area, or Fort Worth. It is steady, nice, increasing and still affordable.

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @Zaid Bender I have not gotten that large yet. The largest property I have is a 6 unit in Columbus, Ohio. Hopefully, one day I will grow to doing 50+ units

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    0Reply
  • Michael Ealy
    Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
    6y
    Originally posted by @Todd Dexheimer:

    Don't focus so much on a state, but on an exact market and sub markets within. I can tell you to invest in Ohio, but there is a big difference between Toledo, Cleveland, Cincinnati and Columbus. I can even tell you to invest in Cincinnati, but there is a massive difference between Westwood, Walnut hills and Hyde park. 

    Get to know the city that you prefer, then figure out the best sub markets within

     I totally agree with Todd. Investing is down to the sub-market and even down to the neighborhood level.

    One of my staff members asked me why I was not interested in a 22-unit building that is only selling for $30K/door. There is a $100/month/u upside with probably a $5,000/unit property improvement. I said "NO" because the neighborhood is a bordeline D+/C- and the $100/mo/u is pretty much all the upside. With better deals I can find in better markets, why be satisfied with that?

    What you want to invest in is a growing community. I like to buy at the border of a good community and a bad community and knowing the market intimately, allows me to know where the good part is growing into and that's where I buy.

    1Reply
  • Tom De Napoli
    Investor · New York, NY · Member since 2019 · 31 posts · 20 votes
    6y

    Not all job and population growth is created equal.  A city or submarket that is growing fast on paper, may not be creating diverse or high paying jobs that are needed to help the region to endure the next drop in the economic cycle, or even a disruption to a specific industry sector.  A region's population and job growth is a great initial indicator to look at as a first step, but then you need to drill down deeper by examining other local variables such as HHIs, GMPs, diversity of economy and other factors that will provide perspective on the vitality of the area's economy.  

    For example, the bottom 10 metros for GMP/capita (measurement of a metro area's output based on national prices for the goods and services) of the largest 53 metro areas in the US, include a few Rustbelt cities, but surprisingly the list over indexes in superstar growth metros in the Sunbelt.  So, while many of these cities have impressive job and population growth on paper, the local economies are more fragile than they appear on the surface, which is a risk you'd need to factor into your underwriting both in terms of rent loss and loss of asset value during a downturn.  It's smart to look for growth, but you need to make sure that growth is sustainable over time.


    Bottom 10 Metros for GMP/capita (lowest first)

    1. Riverside, CA
    2. Tucson, AZ
    3. Tampa - St. Petersburg, FL
    4. Las Vegas
    5. Jacksonville, FL
    6. Providence, RI
    7. Phoenix, AZ
    8. Buffalo, NY
    9. Rochester, NY
    10. Orlando, NY




    Originally posted by @Zaid Bender:

    Investing in higher job growing states is smart and important. With what is happening with the online companies and remotely controlled businesses, many companies are leaving the expensive cities such as San Francisco, NYC and LA and moving to other states where their employees can afford a better living as their living expenses (including rent) is way more affordable.

    Share your success experiences.

    Thanks,

    Dr. Bender

    0Reply
  • Jennifer T.
    Member since 2020 · 31 posts · 10 votes
    6y

    @Mark Allen Kenny what changes in landlord laws were you referring to?

    Thanks

    0Reply
  • Vincent Catanzaro
    Medford, NY · Member since 2018 · 25 posts · 3 votes
    6y

    Could someone please recommend a good or very reliable property management company in the Indianapolis Indiana area. A company that does small commercial real estate such as duplexes, triplexes, quads and any multifamily up to 20 units. Thanks.

    0Reply
  • Zaid Bender
    OP
    Rental Property Investor · Member since 2020 · 36 posts · 20 votes
    6y

    @Vincent Catanzaro the best way to do that, is to ask brokers and lenders. Sometimes google is not the best source to find such things!

    0Reply
  • Vincent Catanzaro
    Medford, NY · Member since 2018 · 25 posts · 3 votes
    6y

    Thank You Zaid. I just thought that investors already doing deals in that area are more reliable than brokers and lenders.

    0Reply
  • Shannon Robnett
    Developer · Boise, ID · Member since 2020 · 173 posts · 198 votes
    6y

    @Zaid Bender

    Here in Idaho we are experiencing the  second largest influx of former west coasters only surpassed by Texas.  We are seeing a ton of telecommuters and satellite contract employees moving into our market place for our cost of living differential and great way of life.  This has created a growing economy where the ancillary jobs are robust but we are not always seeing the office building match the employee count, if that makes sense.  We are seeing our rents and housing cost driven up by the better paying remote workers coming to our area.

    It is definitely creating a supply and demand imbalance which has greatly effected rents and housing costs which is in turn driving more development.  We are seeing 12%+ growth for the 3rd year in a row and do not see this trend stopping.  We are getting national recognition for out growth and that brings national players.

    Interesting times for sure.  Good thing I have a pipeline of equity and syndication deals for the new players coming to our market.

    1Reply
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