Starting Out - How to Narrow in on a Decent Market

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Starting Out - How to Narrow in on a Decent Market

Natasha Rooney
Member since 2024 · 50 posts · 36 votes

Hello! 

We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list). 

What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market. 

Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.


Neighbourhood: Class B or C+ neighbourhood.

Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job. 

Any input, advice would be greatly appreciated! 

TIA :) 

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Evan HoppleBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
2y

@Natasha Rooney

Columbus, OH would be a good fit for a long term buy and hold with enough cash to pay for itself and have a little left over every year to reinvest. Solid business and population growth to support long term appreciation. 

Happy to happy!

[email protected]614-924-8151
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  • Evan HoppleBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2023 · 284 posts · 420 votes
    2y

    @Natasha Rooney

    Columbus, OH would be a good fit for a long term buy and hold with enough cash to pay for itself and have a little left over every year to reinvest. Solid business and population growth to support long term appreciation. 

    Happy to happy!

    [email protected]614-924-8151
    Reafco Real Estate
    View Page
    5Reply
  • Greg ParkerBusiness Member
    Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 669 posts · 536 votes
    2y

    The five most landlord-friendly states are:

    1. West Virginia
    2. Arkansas
    3. Louisiana
    4. North Carolina
    5. Alabama

     Alabama

    Alabama residents enjoy a low cost of living and a thriving economy. The state’s housing is also ranked as the fourth most affordable in the country.

    Alabama currently has the second-lowest average property tax rate in the country at 0.4%, which helps investors keep more of the money they earn.

    [email protected]
    MGM Property Pros LLC
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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    2y
    Quote from @Natasha Rooney:

    Hello! 

    We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list). 

    What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market. 

    Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.


    Neighbourhood: Class B or C+ neighbourhood.

    Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job. 

    Any input, advice would be greatly appreciated! 

    TIA :) 


    It doesn't matter where you invest, as long as you can assemble a great team. Finding a trustworthy lender, realtor, contractor, and property manager is key. I was able to do that here in Ohio.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y

    @Natasha Rooney How would having a map overview of a market, showing the average Property Class of each suburban city and urban Neighborhood help you with your decision?

    Logical Property Management4.9454 Reviews
    WebsiteView Page
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  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    2y

    What's up @Natasha Rooney!  What market are you currently in, and why no interest?

    The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.

    Outside of just a good community, I love Chicago because:

    1.  In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points

    2.  In the south suburbs, there are tons of great single-family cosmetic flips

    We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.  

    With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.

    [email protected]
    Quality Builders4.966 Reviews
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  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    Hi Natasha, these areas in Columbus—North Linden, South of Main, Vassor Village, Woodland Park, MT Vernon, Milo-Grogan, Franklinton, Merrion Village, Hungarian Village, Southern Orchards, Driving Park, Olde Towne East, Franklin Park, King Lincoln, Old Oaks, and Livingston Park—are prime spots for quick gentrification and great long-term buy and holds. Let me know how I can help! 

    [email protected]614-412-2912
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  • Natasha Rooney
    OP
    Member since 2024 · 50 posts · 36 votes
    2y
    Quote from @Greg Parker:

    The five most landlord-friendly states are:

    1. West Virginia
    2. Arkansas
    3. Louisiana
    4. North Carolina
    5. Alabama

     Alabama

    Alabama residents enjoy a low cost of living and a thriving economy. The state’s housing is also ranked as the fourth most affordable in the country.

    Alabama currently has the second-lowest average property tax rate in the country at 0.4%, which helps investors keep more of the money they earn.


     Thank you! I will take a better look at Alabama for sure :) Any particular city that you suggest? 

    0Reply
  • Natasha Rooney
    OP
    Member since 2024 · 50 posts · 36 votes
    2y
    Quote from @Michael Smythe:

    @Natasha Rooney How would having a map overview of a market, showing the average Property Class of each suburban city and urban Neighborhood help you with your decision?


     That would be quite helpful!! 

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Natasha Rooney@Natasha Rooney

    just to be blunt:

    1. OOS investing is much more difficult than advertised.  there are numerous recent threads on BP by folks who bought something because it looked nice, or an agent recommended it, and they didn't see it themselves and approach it with any skepticism.  they immediately got crushed.  examples:

    Baltimore - a path to never-ending pain (biggerpockets.com)
    Experience of OOS investing in Cleveland after 1.5 years. (biggerpockets.com)

    so, if you're serious about a market - you need to go there in person. if you're not willing to do that, then don't invest there.

    2. you're not going to cash flow in the first few years, in any market, period.  not in Alabama, not in California. think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes.  where is the cash flow?  i say this not to discourage you from investing, but to help set your expectations properly.

    my recommendation is always to invest wherever you can be hands-on and in-person.  if your immediate market is too expensive, go a couple hours away.

    hope this helps

    2Reply
  • Natasha Rooney
    OP
    Member since 2024 · 50 posts · 36 votes
    2y
    Quote from @Jonathan Klemm:

    What's up @Natasha Rooney!  What market are you currently in, and why no interest?

    The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.

    Outside of just a good community, I love Chicago because:

    1.  In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points

    2.  In the south suburbs, there are tons of great single-family cosmetic flips

    We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.  

    With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.


     Hello, thanks for the comment on my post! 
    I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts. 

    Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first. 

    Do you mainly do business in Chicago then?

    1Reply
  • Natasha Rooney
    OP
    Member since 2024 · 50 posts · 36 votes
    2y
    Quote from @Nicholas L.:

    @Natasha Rooney@Natasha Rooney

    just to be blunt:

    1. OOS investing is much more difficult than advertised.  there are numerous recent threads on BP by folks who bought something because it looked nice, or an agent recommended it, and they didn't see it themselves and approach it with any skepticism.  they immediately got crushed.  examples:

    Baltimore - a path to never-ending pain (biggerpockets.com)
    Experience of OOS investing in Cleveland after 1.5 years. (biggerpockets.com)

    so, if you're serious about a market - you need to go there in person. if you're not willing to do that, then don't invest there.

    2. you're not going to cash flow in the first few years, in any market, period.  not in Alabama, not in California. think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes.  where is the cash flow?  i say this not to discourage you from investing, but to help set your expectations properly.

    my recommendation is always to invest wherever you can be hands-on and in-person.  if your immediate market is too expensive, go a couple hours away.

    hope this helps


     Thanks for the message! We plan to 100% travel to the area that we are going to be purchasing before making a purchase to meet people, network, and hopefully build a solid team. 

    My immediate market is far too expensive to invest in unfortunately - as well as anywhere within 2 hours. I am located in Western Canada (previously was in Toronto) and its just wild at the moment. So for us, Cross border investing may be what turns out to be the better option. Ideally, investing locally would totally be something we'd prefer to do. However, its not quite possible in today's market. We do own our primary residence but as far as investments go, this is not the place at the moment.

    1Reply
  • Anthony Therrien-Bernard
    Realtor · Calgary, Alberta · Member since 2018 · 291 posts · 132 votes
    2y
    Quote from @Natasha Rooney:
    Quote from @Jonathan Klemm:

    What's up @Natasha Rooney!  What market are you currently in, and why no interest?

    The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.

    Outside of just a good community, I love Chicago because:

    1.  In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points

    2.  In the south suburbs, there are tons of great single-family cosmetic flips

    We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.  

    With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.


     Hello, thanks for the comment on my post! 
    I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts. 

    Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first. 

    Do you mainly do business in Chicago then?


     I am not sure where you are looking but I live in Calgary and I've been finding cash-flowing properties for over 10 years

    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y
    Quote from @Natasha Rooney:
    Quote from @Michael Smythe:

    @Natasha Rooney How would having a map overview of a market, showing the average Property Class of each suburban city and urban Neighborhood help you with your decision?


     That would be quite helpful!! 


     Then you may want to check out our website:)

    Logical Property Management4.9454 Reviews
    WebsiteView Page
    2Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y
    Quote from @Nicholas L.:

    @Natasha Rooney@Natasha Rooney

    just to be blunt:

    1. OOS investing is much more difficult than advertised.  there are numerous recent threads on BP by folks who bought something because it looked nice, or an agent recommended it, and they didn't see it themselves and approach it with any skepticism.  they immediately got crushed.  examples:

    Baltimore - a path to never-ending pain (biggerpockets.com)
    Experience of OOS investing in Cleveland after 1.5 years. (biggerpockets.com)

    so, if you're serious about a market - you need to go there in person. if you're not willing to do that, then don't invest there.

    2. you're not going to cash flow in the first few years, in any market, period.  not in Alabama, not in California. think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes.  where is the cash flow?  i say this not to discourage you from investing, but to help set your expectations properly.

    my recommendation is always to invest wherever you can be hands-on and in-person.  if your immediate market is too expensive, go a couple hours away.

    hope this helps


     Most of this can be traced back to the investor thinking they could get Class A results when buying a Class C property. 

    We deal with it ALL the time:(

    Logical Property Management4.9454 Reviews
    WebsiteView Page
    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    Do this diligence yourself.

    You're just asking agents from their respective cities to chime in on why they're the best. This is doing you no favors, and an absolute wrong way to approach it.

    Get an idea of what you're seeking, then research those cities yourself. 

    2Reply
  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    2y

    Hi @Natasha Rooney - You are most welcome!

    That makes sense regarding the Canadian market.  I lived in Toronto for a couple of years, and the real estate there is quite funky.

    Making the trip and meeting people in person will be worth its weight in gold...GREAT CALL on that.

    We work solely in Chicago as a general contractor...for now.  We have big plans, but we need to have our business running like clockwork before considering branching out.  Which is not easy in the renovation space, but that's why I love it!

    [email protected]
    Quality Builders4.966 Reviews
    WebsiteView Page
    0Reply
  • Natasha Rooney
    OP
    Member since 2024 · 50 posts · 36 votes
    2y
    Quote from @Anthony Therrien-Bernard:
    Quote from @Natasha Rooney:
    Quote from @Jonathan Klemm:

    What's up @Natasha Rooney!  What market are you currently in, and why no interest?

    The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.

    Outside of just a good community, I love Chicago because:

    1.  In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points

    2.  In the south suburbs, there are tons of great single-family cosmetic flips

    We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.  

    With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.


     Hello, thanks for the comment on my post! 
    I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts. 

    Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first. 

    Do you mainly do business in Chicago then?


     I am not sure where you are looking but I live in Calgary and I've been finding cash-flowing properties for over 10 years


     Really?! We are in Calgary as well haha I'd love to meet up and chat sometime over zoom or in person! 

    0Reply
  • Anthony Therrien-Bernard
    Realtor · Calgary, Alberta · Member since 2018 · 291 posts · 132 votes
    2y
    Quote from @Natasha Rooney:
    Quote from @Anthony Therrien-Bernard:
    Quote from @Natasha Rooney:
    Quote from @Jonathan Klemm:

    What's up @Natasha Rooney!  What market are you currently in, and why no interest?

    The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.

    Outside of just a good community, I love Chicago because:

    1.  In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points

    2.  In the south suburbs, there are tons of great single-family cosmetic flips

    We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.  

    With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.


     Hello, thanks for the comment on my post! 
    I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts. 

    Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first. 

    Do you mainly do business in Chicago then?


     I am not sure where you are looking but I live in Calgary and I've been finding cash-flowing properties for over 10 years


     Really?! We are in Calgary as well haha I'd love to meet up and chat sometime over zoom or in person! 

    I'd love to meet I'll send you a DM
    0Reply
  • Marcondes Franco Da Silva
    Investor · Calgary, AB - Canada · Member since 2019 · 11 posts · 4 votes
    2y

    Hi Natasha,

    I am in Calgary and have been investing here in Alberta for about 5 years and I am, also, going south to expand my business. 

    Let me know if you would like to connect to chat about it.

    1Reply
  • Natasha Rooney
    OP
    Member since 2024 · 50 posts · 36 votes
    2y
    Quote from @Marcondes Franco Da Silva:

    Hi Natasha,

    I am in Calgary and have been investing here in Alberta for about 5 years and I am, also, going south to expand my business. 

    Let me know if you would like to connect to chat about it.

    I'd love to! I'll send you a DM. 
    0Reply
  • Rick Albert
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    There are couple of things to think about:

    1. Be careful when you post questions like this. This is when the Realtors come out and say their market is best.

    2. You can make it work in almost any market. I could make a strong argument for both Birmingham Alabama and Los Angeles California. 

    3. House Hacking is a great way to get into investing. By house hacking my first condo, I've been able to scale to now 14 rental doors between four different states.

    4. I do look at the population, rental laws, rental laws, and major businesses/organizations (hospitals, universities, big business, etc.)

    2Reply
  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    2y
    Quote from @Natasha Rooney:

    Hello! 

    We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list). 

    What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market. 

    Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.


    Neighbourhood: Class B or C+ neighbourhood.

    Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job. 

    Any input, advice would be greatly appreciated! 

    TIA :) 


     You can have a great plan but if you can't properly execute it, it won't work. Focus on the area you can best manage properties in an area that also makes sense from an investment point. Don't worry about all the other details. There are mega-successful investors in every market even the ones that are not landlord friendly. 

    0Reply
  • Donato Callahan
    Member since 2023 · 14 posts · 6 votes
    2y
    Quote from @Natasha Rooney:

    Hello! 

    We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list). 

    What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market. 

    Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.


    Neighbourhood: Class B or C+ neighbourhood.

    Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job. 

    Any input, advice would be greatly appreciated! 

    TIA :) 


     Natasha - happy to help. Made a quick video for you on what I look for in markets and how I do it! 

    https://www.loom.com/share/79170bf16882465e8fca26369a1fa1a7?...

    0Reply
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