Top location for long distance investing?

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Top location for long distance investing?

Justin Brin
Investor · Los Angeles, CA · Member since 2023 · 165 posts · 65 votes

Here is a list of 17 metros in the US that have population larger than 900k and median house price is below 400k:

Which metro you recommend and which metro you don't recommend?

I know California is not so investor friendly due to high taxes and non landlord friendly regulation.

Florida has high insurance costs in some areas?!

What do you think?

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Ali Nichols
Investor · Member since 2022 · 235 posts · 127 votes
3y

@Justin Brin great lead in for discussion, thanks for putting that together. Generally speaking, we have the same approach - avoid areas that are heavy in renter friendly regulation (i.e. CA). Then TX is tough right now because of property taxes. And then, Florida is difficult with insurance right now until that stabilizes. 

Then, when we look at Atlanta and Charlotte we see a good amount of supply because of the footprint of large institutiional buyers (i.e. invitation homes).

That leaves the midwest (OH, IN, MO), TN, and the one off markets like Tucson and Albuquerque. Personally, we have had success in small multi-family across OK, TN, MO, KY, IN, OH. 

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  • Ali Nichols
    Investor · Member since 2022 · 235 posts · 127 votes
    3y

    @Justin Brin great lead in for discussion, thanks for putting that together. Generally speaking, we have the same approach - avoid areas that are heavy in renter friendly regulation (i.e. CA). Then TX is tough right now because of property taxes. And then, Florida is difficult with insurance right now until that stabilizes. 

    Then, when we look at Atlanta and Charlotte we see a good amount of supply because of the footprint of large institutiional buyers (i.e. invitation homes).

    That leaves the midwest (OH, IN, MO), TN, and the one off markets like Tucson and Albuquerque. Personally, we have had success in small multi-family across OK, TN, MO, KY, IN, OH. 

    7Reply
  • Justin Brin
    OP
    Investor · Los Angeles, CA · Member since 2023 · 165 posts · 65 votes
    3y
    Quote from @Ali Nichols:

    @Justin Brin great lead in for discussion, thanks for putting that together. Generally speaking, we have the same approach - avoid areas that are heavy in renter friendly regulation (i.e. CA). Then TX is tough right now because of property taxes. And then, Florida is difficult with insurance right now until that stabilizes. 

    Then, when we look at Atlanta and Charlotte we see a good amount of supply because of the footprint of large institutiional buyers (i.e. invitation homes).

    That leaves the midwest (OH, IN, MO), TN, and the one off markets like Tucson and Albuquerque. Personally, we have had success in small multi-family across OK, TN, MO, KY, IN, OH. 

    Did taxes went up in Texas?

    Regarding Atlanta and Charlotte institutional buyers are buying up the market?

    From all these stats "OK, TN, MO, KY, IN, OH" which one is your favorite? 
    0Reply
  • Becca F.
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    3y

    @Justin Brin

    Great question! I've invested in Indianapolis metro area - SFH#1 is in a nice suburb with great schools and SFH#2 is in a Class C moving up to B area It's got a diverse job market. FedEx and Eli Lilly are two of the larger employers. I feel that the property tax rates are a little high 2.77% and 2.78% but I'm still cash flow positive despite the large property tax increase on SFH#1 (owned for 10 years).

    I considered FL (not Tampa or Jacksonville but the Panhandle, Fort Walton Beach and West Panama City Beach) but the insurance costs are high. I considered Cincinnati but since I know Indy well (used to live there), I decided to focus just on one city in the Midwest

    I also looked at Bakersfield. I've heard from others that the tenant base might be a little challenging so that's a no for me. Coastal CA with the Bay Area, LA or San Diego will hold its value and it doesn't take too many properties to build long term wealth. I would have to buy a lot of properties in Indy to outperform my CA properties. My suburban Indy home has doubled in value (+$140,000) in 10 years, which is good for the Midwest - I'm pretty sure any coastal CA property would surpass that appreciation rate. I know current prices and interest rates make it difficult. 

    I have a California investor friends who bought in Kansas City, MO, Oklahoma, and Dallas. 

    3Reply
  • Justin Brin
    OP
    Investor · Los Angeles, CA · Member since 2023 · 165 posts · 65 votes
    3y

    Thanks @Becca F. for your reply!

    How you manage your properties in Indy? Do you do it yourself or you have a local manager?

    As of now, I've only invested in single-family homes in the Los Angeles,
    CA area. Given the recent surge in property prices in LA, I'm
    considering expanding to the outer suburbs of Los Angeles. Additionally,
    I'm exploring long-distance investments to identify locations with
    stronger cashflow potential and a lower entry point.

    0Reply
  • Tim Ryan
    Investor / Mentor / Contractor · Arcadia, CA Buying Out of State · Member since 2015 · 655 posts · 622 votes
    3y

    Good, my market still not showing up. That means my strategy of being a contrarian and going in first is working.  I'm raising rents often and seeing appreciation in a Blue Ocean.  Soon the investors will show up - and I'll begin to sell ;)

    3Reply
  • Evan HoppleBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 285 posts · 420 votes
    3y

    Columbus, OH has to be at the top of the list of cities to be investing in right now. Huge tech grow, low taxes, and landlord friendly. 

    Plans to were announced last month to invest $2B into the cities airport in anticipation of the population/business

    [email protected]614-924-8151
    Reafco Real Estate
    View Page
    3Reply
  • Yu Liu
    Investor · Tallahassee · Member since 2019 · 249 posts · 93 votes
    3y

    I don't personally invest in the following but I've heard great things about Indianapolis and Cincinnati. I know some people crushing it with STRs in indy and a friend who is looking for multifamily in Cinci

    Personally, I like the Florida market because I'm familiar with it

    3Reply
  • Justin Brin
    OP
    Investor · Los Angeles, CA · Member since 2023 · 165 posts · 65 votes
    3y
    Quote from @Tim Ryan:

    Good, my market still not showing up. That means my strategy of being a contrarian and going in first is working.  I'm raising rents often and seeing appreciation in a Blue Ocean.  Soon the investors will show up - and I'll begin to sell ;)

    Which is your market ?
    0Reply
  • Justin Brin
    OP
    Investor · Los Angeles, CA · Member since 2023 · 165 posts · 65 votes
    3y
    Quote from @Yu Liu:

    I don't personally invest in the following but I've heard great things about Indianapolis and Cincinnati. I know some people crushing it with STRs in indy and a friend who is looking for multifamily in Cinci

    Personally, I like the Florida market because I'm familiar with it

    How is the insurance cost currently in Florida? Or it only went up in certain areas and not all Florida?
    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    3y
    Quote from @Justin Brin:

    Here is a list of 17 metros in the US that have population larger than 900k and median house price is below 400k:

    Which metro you recommend and which metro you don't recommend?

    I know California is not so investor friendly due to high taxes and non landlord friendly regulation.

    Florida has high insurance costs in some areas?!

    What do you think?

    Hi Justin, I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9122 Reviews
    WebsiteView Page
    5Reply
  • Pete Harper
    Rental Property Investor · Streetman, TX · Member since 2018 · 528 posts · 495 votes
    3y
    Quote from @Justin Brin:
    Quote from @Ali Nichols:

    @Justin Brin great lead in for discussion, thanks for putting that together. Generally speaking, we have the same approach - avoid areas that are heavy in renter friendly regulation (i.e. CA). Then TX is tough right now because of property taxes. And then, Florida is difficult with insurance right now until that stabilizes. 

    Then, when we look at Atlanta and Charlotte we see a good amount of supply because of the footprint of large institutiional buyers (i.e. invitation homes).

    That leaves the midwest (OH, IN, MO), TN, and the one off markets like Tucson and Albuquerque. Personally, we have had success in small multi-family across OK, TN, MO, KY, IN, OH. 

    Did taxes went up in Texas?

    Regarding Atlanta and Charlotte institutional buyers are buying up the market?

    From all these stats "OK, TN, MO, KY, IN, OH" which one is your favorite? 
    Property taxes in Texas have always been high.  With no state income taxes they government needs to get their money somehow.  Unlike CA there is no Prop-13 cap on appraisals.  Appraisals keep going up every year unchecked.  We own 8 properties in Texas, every one went up in 2023.  Same in 2022. Low prices might look attractive but your total property tax burden is about 2X California.  Make sure you account for this in your underwriting.  

    I would make a suggestion on your target market strategy.  Look at secondary markets in the path of progress from major metro areas.  We are doing well outside Austin, Dallas and Houston. 


    2Reply
  • Trevor Richardson
    Real Estate Broker · Reno, NV · Member since 2023 · 267 posts · 297 votes
    3y

    I see your criteria, but I would strongly consider looking at Nevada. It’s closest to your location. Nevada has the third lowest property taxes in the nation, no state income tax and very landlord friendly laws. No offense to Ohio but they are usually in the top 10 most expensive states for property taxes, along with Texas. Reno is considerably less expensive as an entry point compared to CA. 

    I'm helping a lot of CA investors discover Reno and I'm curious on why Nevada wouldn't even be a consideration? We have severe land constraints, and Tesla is about to expand Giga Nevada to include the Tesla Semi factory which will lead to more rent and home appreciation. Our low unemployment is driving up housing prices from a lull we have been in for 18 months and we continue to have population migration from NorCal and the most expensive area in the nation, the Bay Area. Our market dynamics are optimal for real estate investing either SFR or Multifamily.

    5Reply
  • Ali Nichols
    Investor · Member since 2022 · 235 posts · 127 votes
    3y
    Quote from @Justin Brin:
    Quote from @Ali Nichols:

    @Justin Brin great lead in for discussion, thanks for putting that together. Generally speaking, we have the same approach - avoid areas that are heavy in renter friendly regulation (i.e. CA). Then TX is tough right now because of property taxes. And then, Florida is difficult with insurance right now until that stabilizes. 

    Then, when we look at Atlanta and Charlotte we see a good amount of supply because of the footprint of large institutiional buyers (i.e. invitation homes).

    That leaves the midwest (OH, IN, MO), TN, and the one off markets like Tucson and Albuquerque. Personally, we have had success in small multi-family across OK, TN, MO, KY, IN, OH. 

    Did taxes went up in Texas?

    Regarding Atlanta and Charlotte institutional buyers are buying up the market?

    From all these stats "OK, TN, MO, KY, IN, OH" which one is your favorite? 

     @Justin Brin - well yes TX property taxes are always high but the run up of sales over the last few years have given taxing entities the opportunity to re-assess even more. 

    Regarding Charlotte and Atlanta we find there to be just a little too much supply because of how much investor activity they drew over the last few years. 

    Of the OK, TN, MO, KY, IN, OH our favorites would be OH and TN. 

    1Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    Justin, really curious why Detroit didn't make this list.

    The Metro area is 4.36 million people.

    I'm not sure what the median home price is in all of Metro Detroit but it's south of $400k.

    1Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3y
    Quote from @Trevor Richardson:

    I see your criteria, but I would strongly consider looking at Nevada. It’s closest to your location. Nevada has the third lowest property taxes in the nation, no state income tax and very landlord friendly laws. No offense to Ohio but they are usually in the top 10 most expensive states for property taxes, along with Texas. Reno is considerably less expensive as an entry point compared to CA. 

    I'm helping a lot of CA investors discover Reno and I'm curious on why Nevada wouldn't even be a consideration? We have severe land constraints, and Tesla is about to expand Giga Nevada to include the Tesla Semi factory which will lead to more rent and home appreciation. Our low unemployment is driving up housing prices from a lull we have been in for 18 months and we continue to have population migration from NorCal and the most expensive area in the nation, the Bay Area. Our market dynamics are optimal for real estate investing either SFR or Multifamily.


     Nevada barrier to entry is higher than this list. Believe that's the emphasis of this. You're trying to find growing areas in below median list--these are how to invest. California investors come significantly more equipped than average investors. What % of houses in Reno are available for a conventional investment loan at $360k or less? 

    2Reply
  • Trevor Richardson
    Real Estate Broker · Reno, NV · Member since 2023 · 267 posts · 297 votes
    3y
    Quote from @V.G Jason:
    Quote from @Trevor Richardson:

    I see your criteria, but I would strongly consider looking at Nevada. It’s closest to your location. Nevada has the third lowest property taxes in the nation, no state income tax and very landlord friendly laws. No offense to Ohio but they are usually in the top 10 most expensive states for property taxes, along with Texas. Reno is considerably less expensive as an entry point compared to CA. 

    I'm helping a lot of CA investors discover Reno and I'm curious on why Nevada wouldn't even be a consideration? We have severe land constraints, and Tesla is about to expand Giga Nevada to include the Tesla Semi factory which will lead to more rent and home appreciation. Our low unemployment is driving up housing prices from a lull we have been in for 18 months and we continue to have population migration from NorCal and the most expensive area in the nation, the Bay Area. Our market dynamics are optimal for real estate investing either SFR or Multifamily.


     Nevada barrier to entry is higher than this list. Believe that's the emphasis of this. You're trying to find growing areas in below median list--these are how to invest. California investors come significantly more equipped than average investors. What % of houses in Reno are available for a conventional investment loan at $360k or less? 

    A small amount under $360k. However, there are deals in that range, I can’t reference it cause BP will flag and delete posts where I reference transaction details. I get a note about self-promotion. If you have questions DM me and I can share. 
    1Reply
  • Justin Brin
    OP
    Investor · Los Angeles, CA · Member since 2023 · 165 posts · 65 votes
    3y
    Quote from @Pete Harper:
    I would make a suggestion on your target market strategy.  Look at secondary markets in the path of progress from major metro areas.  We are doing well outside Austin, Dallas and Houston. 

     You are suggesting not to focus on main metro areas but secondary areas?

    0Reply
  • Justin Brin
    OP
    Investor · Los Angeles, CA · Member since 2023 · 165 posts · 65 votes
    3y
    Quote from @Travis Biziorek:

    Justin, really curious why Detroit didn't make this list.

    The Metro area is 4.36 million people.

    I'm not sure what the median home price is in all of Metro Detroit but it's south of $400k.

    Yes Detroit is also on option. How is the current economy in Detroit? 

    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y
    Quote from @Justin Brin:
    Quote from @Travis Biziorek:

    Justin, really curious why Detroit didn't make this list.

    The Metro area is 4.36 million people.

    I'm not sure what the median home price is in all of Metro Detroit but it's south of $400k.

    Yes Detroit is also on option. How is the current economy in Detroit? 

    Quite strong. There are four main industries: automotive, healthcare, real estate, and gambling.

    Automotive is seeing new life with autonomous tech and EV stuff. The city is also working to position themselves around transit/movement instead of just auto. It's definitely interesting and there's a ton of investment in this space.

    Healthcare is huge in Detroit and The Henry Ford Health system is undergoing massive expansion.

    For real estate, Rocket Mortgage/Quicken Loans is a big employer in the City. Dan Gilbert (also a huge catalyst for the city himself) moved the company from the suburbs to downtown Detroit in 2014, I believe.

    There are three casinos in Detroit that are big employers and tax revenue generators. 

    Overall, things have made a ton of improvement over the last 10 years and it's only getting started. 
    1Reply
  • Pete Harper
    Rental Property Investor · Streetman, TX · Member since 2018 · 528 posts · 495 votes
    3y
    Quote from @Justin Brin:
    Quote from @Pete Harper:
    I would make a suggestion on your target market strategy.  Look at secondary markets in the path of progress from major metro areas.  We are doing well outside Austin, Dallas and Houston. 

     You are suggesting not to focus on main metro areas but secondary areas?


     Correct.  Don't invest in Austin but along the I35 corridor going North.  Similarly along the I45 corridor from Houston.  Hwy 75 North of Dallas is another good area.  

    2Reply
  • Paul Sedillo
    Investor · Austin, TX · Member since 2012 · 75 posts · 47 votes
    3y
    Quote from @Pete Harper:
    Quote from @Justin Brin:
    Quote from @Pete Harper:
    I would make a suggestion on your target market strategy.  Look at secondary markets in the path of progress from major metro areas.  We are doing well outside Austin, Dallas and Houston. 

     You are suggesting not to focus on main metro areas but secondary areas?


     Correct.  Don't invest in Austin but along the I35 corridor going North.  Similarly along the I45 corridor from Houston.  Hwy 75 North of Dallas is another good area.  

    Agreed, I have been researching I35 North Corridor and finding opportunities in the smaller towns that are big enough to invest in. Well worth a look. 
    1Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    3y

    Where did you pull that data? Milwaukee metro has 1.6M people and median is 225k.

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Justin Brin:

    Here is a list of 17 metros in the US that have population larger than 900k and median house price is below 400k:

    Which metro you recommend and which metro you don't recommend?

    I know California is not so investor friendly due to high taxes and non landlord friendly regulation.

    Florida has high insurance costs in some areas?!

    What do you think?

     There is a reason investor from around the world have been buying for the last 10 years and still are buying in the Cleveland markets. If you got in , 7 8 years ago, you doubled tripled or more on top of the 20% net caps. I just locked up 7 more last week, all are under 90k, all have rents from 1100- 1400, all have values from 115k- 125k . MF, try finding one, there is simply no inventory. 

    All the best 

    1Reply
  • Becca F.
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    3y
    Quote from @Justin Brin:

    Thanks @Becca F. for your reply!

    How you manage your properties in Indy? Do you do it yourself or you have a local manager?

    As of now, I've only invested in single-family homes in the Los Angeles,
    CA area. Given the recent surge in property prices in LA, I'm
    considering expanding to the outer suburbs of Los Angeles. Additionally,
    I'm exploring long-distance investments to identify locations with
    stronger cashflow potential and a lower entry point.


    I have a property manager for Indy. I interviewed 3 PM companies. Typical monthly management fee is 10% of the rent. SFH#2 is on the East side of Indy (Christian Park). I bought it from a flipper who over priced it, purchase price $130,000. I've made at least 6 offer since this summer, attempting to flip or BRRRR. I decided that trying to renovate from 2000 miles away isn't for me and definitely don't have the risk tolerance to flip - the margins are thin and the ARV isn't high enough to do Hard Money Loan with high interest rates, not worth the stress for me.

    Was looking at residential multi-units in Indy but feedback from PM company is that 2 to 4 units have higher turnover and in less demand than SFHs. Good tenants will pay to not have neighbors right next to them. I'll either buy another SFH turn key, not buy for a while and save up money for a year or two to look in Northern California (Sacramento) or Nevada. I'm also looking at syndications.

    Can you build ADUs if you buy SFH in LA area so you'd get a higher rent? I don't know much about LA but I've heard Inland Empire is more affordable.

    2Reply
  • Lauren McNary
    Member since 2021 · 14 posts · 9 votes
    3y

    You should also take a look at Little Rock, Arkansas. Little Rock has experienced steady population growth over the years, which can create increased demand for housing. A growing population often leads to higher demand for real estate, making it an appealing market for property investors seeking potential rental income or property appreciation.

    2Reply
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