Finding your long-distance market!?

Question

Hi Everyone, my name is Leo, I have been a member of BP for over 7 years and now I want to pull the trigger. I am looking to BRRRR long-distance because my NYC market is too expensive for me. Do you guys have any suggestions on how I go about researching where I can find properties that appraise at approx $100-200K ARV. I have no idea how to search the country for locations where I can find these properties and be sure that they rent easily.  Any suggestions would help! I really appreciate it!

Joshua Janus · Answer

@Leonard Rybak When researching a market, it is important to pay attention to the factors you highlighted above as well as what brings people to the city and what will continue to do so. If the price is relatively low/sqft and the city has a growing population and job market, the demand for homes will increase which leads to home appreciation. Also see how the specific market handles STR as that brings in a large section of rei investors and can drive prices up. Here is a quick analysis of my market. Paying attention to recent and upcoming capital investments by the city can also give you a good idea of where the money is flowing in the city and you can see if it is recovering or growing. Columbus, Ohio is a great market to invest in. The population has been growing here year over year over the last decade, it is home to The Ohio State University which has over 50,000 students that live here along with those that visit, and it also holds a diverse range of young professionals and traveling nurses to fill the demand of the multiple business corporations and hospitals stationed here. Tech companies are continuously moving here and establishing a footprint in Columbus as well. Intel is a great example, who is building the largest chip manufacturing plant in the US right here, and it will be a $20 billion dollar investment that brings a few new thousand jobs. https://www.dispatch.com/story... are a few more recent investments https://www.10tv.com/article/money/business/hydrogen-power-company-hyperion-bringing-700-jobs-to-columbus/530-25907aab-5517-4661-a9f3-d2ed2d5be6b0

https://columbusunderground.com/kaufman-development-purchasing-franklintons-idea-foundry-sp1/

https://highlandcountypress.com/Content/In-The-News/Headlines/Article/Development-projects-will-support-1-4-billion-in-investments-in-Ohio-communities/2/73/77342

https://columbusunderground.com/kaufman-development-purchasing-franklintons-idea-foundry-sp1/

https://highlandcountypress.com/Content/In-The-News/Headlines/Article/Development-projects-will-support-1-4-billion-in-investments-in-Ohio-communities/2/73/77342

Steven Foster Wilson · Answer

What I do is I look at where businesses are moving and the population growths. I figured that big businesses are smarter than I am and they pay people to look at areas across the country of where would be a good place to invest. Personally, I think that Columbus with all the big businesses like Intel, Limited, Amazon, and Chipotle being here people will come for the jobs/need housing.

Patrick Drury · Answer

@Leonard RybakDefinitely check out the Columbus OH market. Great cash flow/ application hybrid. Also, lots of job opportunities and population growth.

Austin McClain · Answer

Columbus Ohio has been a strong market for out-of-state investing. Prices are lower than in markets like NYC, lowering the barrier to entry. More companies like Intel are moving here as well, helping homes appreciate long term.

Nicholas L. · Answer

@Leonard Rybak find a market you can drive to.

Gorden Lopes · Answer

I usually rely on school ratings and average income in an area to determine the class plus I speak to my PM and realtors. neighborhoodscout website give a good basic info on average income as well.

Leonard Rybak · Answer

@Gorden Lopes , How would I go about finding out what neighborhood class a neighborhood is graded at?

Colton Hahn · Answer

We focus on the midwest exclusively and have found some great properties in the midwest. Not a boom or bust region typically and our audited 31%+ IRR returns over 12 years shows it can be a very lucrative market. All the best!

Nicholas L. · Answer

@Leonard Rybak because it's easier to get things set up and fine your Core 4.  Can you invest anywhere in the US?  Sure.  But meeting people, seeing houses in person, meeting agents, going to REIAs, networking... easier if you can drive there.  I have to believe there are markets in PA or CT within 2-3 hours of you that are growing and investable.  Will they be the absolute cheapest markets in the whole US?  No.  But cheapest doesn't mean best...

Gorden Lopes · Answer

@Leonard Rybak

I am sure you might have heard that many of the mid-west cities are good cash flow areas. I was in your shoes 4 years back and Hunstville Al came up top in my research and I ended up buying few properties there and doing 4 long distance BRRRR. I am super bullish on Huntsville and would recommend you to check that city out.

One important thing to look at is the neighborhood class that you invest in. In many cities, 100-200K might buy you "cash flowing" properties in Class D areas. I think it is important to buy houses in decent areas even if you have to sacrifice cash flow a little. There are many metrics you need to look at but population growth and property taxes (hidden expense) are the two most important I think.

All the best in your search and make a move quickly before the interest rates climb up more! :)

Finding your long-distance market!?

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