Best Multi-Family Markets in 2021

Multi-Family and Apartment Investing
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Best Multi-Family Markets in 2021

Michala Vander Ploeg
Investor · Ottawa, Ontario · Member since 2017 · 35 posts · 16 votes
  • Looking for markets with:
    5+ unit buildings
    Cap rates of 10% or higher
    Low vacancy
    Low taxes
    Good Property Management (several companies to chose from)
    Landlord Friendly

    Looking to invest long distance from Canada- we will consider any area as all purchases will be considered long distance investing and its all about the numbers. Hoping we can narrow down which states/markets to start researching more. Right now we are a bit overwhelmed with where to start. 


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Brian BurkePro Member
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
5y

@Michala Vander Ploeg, if you are looking for 10%+ cap rates, you would be looking for the worst multifamily markets.  The reason cap rates would be in the 10% range is because the market is horrible and no one wants to buy there.  The best markets have a lot of buyers, and that activity forces cap rates down.

Here are two articles that may help you:

https://www.biggerpockets.com/...

https://www.biggerpockets.com/...

In response to your question about where to find the best markets:  You want to buy in places where people are moving TO, and avoid markets where people are moving FROM.  Las Vegas, Phoenix, Tucson, Boise, Salt Lake City, DFW, Austin, Atlanta, Tampa, Raleigh/Cary and several other southeastern US markets.  There are other good markets where people are moving to, but have had too much new construction, which is placing a damper on rent growth.  Great markets if you're willing to wait, or maybe buy in a couple of years:  Nashville, Orlando, Jacksonville are just a couple of examples.

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  • Harish V.
    Investor · Fremont, CA · Member since 2015 · 211 posts · 125 votes
    5y
    Originally posted by @Michala Vander Ploeg:
    • Looking for markets with:
      5+ unit buildings
      Cap rates of 10% or higher
      Low vacancy
      Low taxes
      Good Property Management (several companies to chose from)
      Landlord Friendly

      Looking to invest long distance from Canada- we will consider any area as all purchases will be considered long distance investing and its all about the numbers. Hoping we can narrow down which states/markets to start researching more. Right now we are a bit overwhelmed with where to start. 


    Cap rates 10+. I am not sure that can happen trouble free. Good luck

    5Reply
  • Arn CenedellaPro Member
    Rental Property Investor · Greenville, SC · Member since 2008 · 786 posts · 1k+ votes
    5y

    @Michala Vander Ploeg

    Respectfully, I don’t believe you will find anything that meets your criteria in a US growth market. I just bought a 43 unit deal in Greenville SC an excellent market at a 5.2% cap and feel fortunate to find it.

    [email protected]650-575-6114
    11Reply
  • Michala Vander Ploeg
    OP
    Investor · Ottawa, Ontario · Member since 2017 · 35 posts · 16 votes
    5y

    @Harish V. & @Arn Cenedella

    Thank you for your responses this is good information, I was under the impression that there are still markets in the US that provide higher cap rates. 

    Based on the other criteria, where would you suggest the healthy multi-family markets are currently?

    1Reply
  • Jeffrey Donis
    Investor · Durham, NC · Member since 2020 · 1k+ posts · 691 votes
    5y

    Hey Michala!

    10+ caps are definitely hard to find. In most markets that we are looking in we re lucky to find 5-6 caps- not to say it is impossible but sticking to that criteria will make it very difficult for you find a deal. Have you found any states/areas you are interested in? Southeast/Midwest are great areas to look in right now if you have not considered those. 

    1Reply
  • Michala Vander Ploeg
    OP
    Investor · Ottawa, Ontario · Member since 2017 · 35 posts · 16 votes
    5y
    Originally posted by @Jeffrey Donis:

    Hey Michala!

    10+ caps are definitely hard to find. In most markets that we are looking in we re lucky to find 5-6 caps- not to say it is impossible but sticking to that criteria will make it very difficult for you find a deal. Have you found any states/areas you are interested in? Southeast/Midwest are great areas to look in right now if you have not considered those. 


    Hi Jeffrey,

    We've considered Indiana more specifically Indianapolis and Ohio, Cleveland, Cincinnati, Columbus

    2Reply
  • Jeffrey Donis
    Investor · Durham, NC · Member since 2020 · 1k+ posts · 691 votes
    5y
    Originally posted by @Michala Vander Ploeg:
    Originally posted by @Jeffrey Donis:

    Hey Michala!

    10+ caps are definitely hard to find. In most markets that we are looking in we re lucky to find 5-6 caps- not to say it is impossible but sticking to that criteria will make it very difficult for you find a deal. Have you found any states/areas you are interested in? Southeast/Midwest are great areas to look in right now if you have not considered those. 


    Hi Jeffrey,

    We've considered Indiana more specifically Indianapolis and Ohio, Cleveland, Cincinnati, Columbus

    Awesome! I have heard great things about all of those however none are near me/I have looked in before. If you ever need any incite on the Southeast feel free to reach out! Wish you the best of luck :)

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Michala Vander Ploeg:
    Originally posted by @Jeffrey Donis:

    Hey Michala!

    10+ caps are definitely hard to find. In most markets that we are looking in we re lucky to find 5-6 caps- not to say it is impossible but sticking to that criteria will make it very difficult for you find a deal. Have you found any states/areas you are interested in? Southeast/Midwest are great areas to look in right now if you have not considered those. 


    Hi Jeffrey,

    We've considered Indiana more specifically Indianapolis and Ohio, Cleveland, Cincinnati, Columbus

     Ohio, Cleveland, Cincinnati, Columbus are the best markets

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  • Blake ParkBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 126 posts · 121 votes
    5y

    I would look into Columbus Ohio. Finding a deal above 7% cap is not uncommon.

    [email protected]614-762-9232
    3Reply
  • Brian BurkePro Member
    Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
    5y

    @Michala Vander Ploeg, if you are looking for 10%+ cap rates, you would be looking for the worst multifamily markets.  The reason cap rates would be in the 10% range is because the market is horrible and no one wants to buy there.  The best markets have a lot of buyers, and that activity forces cap rates down.

    Here are two articles that may help you:

    https://www.biggerpockets.com/...

    https://www.biggerpockets.com/...

    In response to your question about where to find the best markets:  You want to buy in places where people are moving TO, and avoid markets where people are moving FROM.  Las Vegas, Phoenix, Tucson, Boise, Salt Lake City, DFW, Austin, Atlanta, Tampa, Raleigh/Cary and several other southeastern US markets.  There are other good markets where people are moving to, but have had too much new construction, which is placing a damper on rent growth.  Great markets if you're willing to wait, or maybe buy in a couple of years:  Nashville, Orlando, Jacksonville are just a couple of examples.

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    27Reply
  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    @Brian Burke one of the best responses I've read in several months. Well said. If you want quality, you have to pay for it.

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  • Michala Vander Ploeg
    OP
    Investor · Ottawa, Ontario · Member since 2017 · 35 posts · 16 votes
    5y

    Thanks for the great info @Brian Burke. This is very helpful solid advice. I will look into those markets!

    0Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    As some of the others said, there is a lot of opportunity in Ohio. It really just comes down to how well of a team you build out when investing in another market. @Michala Vander Ploeg

    [email protected]614-963-3340
    2Reply
  • Dillon Cook
    Realtor · Greater Tampa Bay · Member since 2014 · 219 posts · 130 votes
    5y

    Tagging off what Brian said, folks are moving TO Florida.

    2Reply
  • Corey Frank
    Gillette, WY · Member since 2017 · 149 posts · 68 votes
    5y

    @Michala Vander Ploeg be incredibly careful when looking into the Ohio market. Lots of people will try to talk you into that market… (mostly realtors from that area) from my own initial analysis into Cleveland, the population of the city has been declining every year for the last 50 years and has over 35% of the population under the poverty line. Definitely metrics that scare me. Perhaps you have a different strategy.

    4Reply
  • Michala Vander Ploeg
    OP
    Investor · Ottawa, Ontario · Member since 2017 · 35 posts · 16 votes
    5y

    @Corey Frank thank you! This information is invaluable. I need to narrow down my list of a few different cities and then start digging deeper into these types of details. Trying to build my list, and hopefully save myself some time by having other experienced investors direct me to the areas they are drawn to (or try to avoid!).

    1Reply
  • Montez B.
    Rental Property Investor · Flint, MI · Member since 2019 · 114 posts · 26 votes
    5y

    @Harish Verma yeah I was thinking the same thing, if I was you I would base my numbers on my COC and not really cap rate unless you buying a property in cash then that would be a different story lol usually The higher the cap rate the higher the risk in the area the property is in

    1Reply
  • Corey Frank
    Gillette, WY · Member since 2017 · 149 posts · 68 votes
    5y

    @Michala Vander Ploeg That is exactly what I am doing now =) when  trying to make your list, it helps me by having pre determined metrics that I am looking for. Population growth, job growth, ect. That way I quickly see if an area will not work out or I need to do more research on the area. This also shows me quickly if an area that someone is trying to sell me is actually a good market or someone trying to make a dollar. Hope this helps! =)

    1Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    5y

    @Corey Frank 

    Cleveland is a good market to get into because it's an undeveloped version of Columbus that kinda sucks now but will eventually be worth it. No matter what Columbus still takes the cake when talking about Ohio no way around it the population growth, job opportunities and, and rise in prices are astronomical in Columbus compared to Cleveland.

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  • Corey Frank
    Gillette, WY · Member since 2017 · 149 posts · 68 votes
    5y
    Originally posted by @Patrick Drury:

    @Corey Frank 

    Cleveland is a good market to get into because it's an undeveloped version of Columbus that kinda sucks now but will eventually be worth it. No matter what Columbus still takes the cake when talking about Ohio no way around it the population growth, job opportunities and, and rise in prices are astronomical in Columbus compared to Cleveland.

    That could defiantly be but from the population stats and the employment stats, for me personally, Cleveland looks pretty sketchy. 
    cC

    1Reply
  • Justin Goodin
    Investor · Indianapolis, IN · Member since 2018 · 1k+ posts · 756 votes
    5y

    @Michala Vander Ploeg Good luck! I stick to Midwest markets. You should try looking in secondary markets too.

    0Reply
  • Cameron Braig
    Atlanta, GA · Member since 2021 · 493 posts · 162 votes
    5y

    @Michala Vander Ploeg 

    The sunbelt/southeast continues to be a strong market for the multi-family space. Metros like Atlanta, Charlotte, Raleigh, Tampa and Jacksonville have seen employment growth (both in terms of job numbers and industry diversification) and rent growth. Additionally, the pandemic accelerated growth in relocation from northern cities to southern/southeast metros and the continuing trend of work from home looks likely to only continue those demo shifts. 

    2Reply
  • Justin Goodin
    Investor · Indianapolis, IN · Member since 2018 · 1k+ posts · 756 votes
    5y
    Originally posted by @Michala Vander Ploeg:
    • Looking for markets with:
      5+ unit buildings
      Cap rates of 10% or higher
      Low vacancy
      Low taxes
      Good Property Management (several companies to chose from)
      Landlord Friendly

      Looking to invest long distance from Canada- we will consider any area as all purchases will be considered long distance investing and its all about the numbers. Hoping we can narrow down which states/markets to start researching more. Right now we are a bit overwhelmed with where to start. 


     How is your search going?

    0Reply
  • Reden Dionisio
    Investor · San Antonio, TX · Member since 2020 · 79 posts · 26 votes
    5y

    @Brian Burke solid advice. Who else is looking in the areas Brian referred to? Specifically in the southeastern US?

    0Reply
  • Janos Castro
    Investor · Charlotte, NC · Member since 2020 · 9 posts · 4 votes
    5y

    Have you considered the Charlotte, NC market? incredibly high population growth rates, great demand for MF specially in the mid range and small to medium size unit counts. You will not find the cap rate specified, but certain investment strategies more than make up for that in this area. Charlotte is one of the top, if not the #1 market, for certain real estate sectors in the country. 

    I've specialized in small to medium off-market MF and the potential is very rewarding if you know where you are looking.

    2Reply
  • Chad Gray
    Raleigh, NC · Member since 2019 · 57 posts · 54 votes
    5y
    Originally posted by @Janos Castro:

    Have you considered the Charlotte, NC market? incredibly high population growth rates, great demand for MF specially in the mid range and small to medium size unit counts. You will not find the cap rate specified, but certain investment strategies more than make up for that in this area. Charlotte is one of the top, if not the #1 market, for certain real estate sectors in the country. 

    I've specialized in small to medium off-market MF and the potential is very rewarding if you know where you are looking.

     Hi Janos,

    Which tertiary markets of Charlotte do you currently favor over others?

    1Reply
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