First Multifamily Property - Where would you buy?

Question

Hi all! I am looking to purchase a 2-4 unit multifamily property. I am from CA and just moved to CO but both of those areas are super expensive to get started in. I am wording what cities have a relatively low entry cost ($100K-250K) but yield good rental returns. I'm not super worried about appreciation (I know for example Cleavland OH has pretty cheap houses, relatively high rents but not much appreciation). I am going to start a direct mail marketing campaign/ cold calling in some areas in an effort to locate an off-market property, I just need ideas on some cities I should target. Any ideas? Also, any general advice for a newbie who only has 1 door is welcomed! :-)

Stephen Brown · Answer

Indy, Columbus, Cleveland, Toledo, Dayton, Grand Rapids, Fort Wayne. All great options to consider!

Reece Iovine · Answer

Columbus is my go to, but it is getting competitive like most areas with strong fundamentals. For your price range you're looking C class in columbus.

Peter Nikic · Answer

memphis is cheap, yet rentals seem to be growing in income and demand. Although I've never been there, I'm just going by the data I've seen. I'm working on Chattanooga.

Jeffrey Donis · Answer

Hey Michelle!

I am from NC so my answer is biased- full disclosure- however with all of the migration from up north the southeast region continues to grow and flourish.

Evan Polaski · Answer

@Michelle Jones, generally you are going to be in lower end neighborhoods in secondary markets or tertiary markets.  Clearly, the closer to bigger cities, the easier time you will have with both rental demand and access to managers.

Particularly in the small multifamily space, I don't put much credence to the "must be in the best cities".  At the end of the day Cleveland, Chicago, Cincinnati, Dayton, OH, Indy are not going anywhere and your exit is going to be to local investor.

Jackson Babcock · Answer

@Michelle Jones

Are you planning on self managing this property or hiring third party management? If self managing I would be looking for something within close driving distance for when problems arise you can take care of them easier.

Remington Lyman · Answer

I would check out Columbus, Ohio

Darryl Matthews · Answer

@Michelle Jones the Mid Michigan market has an average price range of $220k for 2-4 multifamily properties.

Spencer Gray · Answer

I would take a look at Indianapolis.

Michelle Jones · Answer

Ummm that's a little out of my price range... Even the hood is going to cost at least $500K for a duplex.

First Multifamily Property - Where would you buy?

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