This is a topic that I really haven't seen discussed much before, and that is why I am starting this thread.
I received a phone call and a job offer for a position in Omaha, Nebraska. I am probably one of the few people who has no intention of quitting my job, and love what I do for a living. I currently own two 4 plexes, one in Phoenix, AZ and the other in Tucson, AZ. I am closing on my third 4 plex in under 2 weeks.
I will go from being able to see my properties on a daily basis, to maybe flying out to see them a couple times a year. Fortunately I already have property management set up, so that won't be my issue.
My question is, where do I invest? Should I continue investing in Arizona, the market where I currently own all of my rentals? Should I start looking for deals in Omaha, the place where I am moving? The third option is to look for deals in Kansas City, it is my hometown and only a 2.5 hour drive from Omaha. I know this market the best of all three.
Also I have read that you can have more than one FHA loan if you are relocating, so I am strongly considering going that route.
The Omaha area is a great rental property market. Low vacancies, strong economy, good job growth. Why not invest in your own (new) backyard? The demographics are similar to KC, so why drive 3 hours when you don't have to?
Owen Dashner, ODD Properties, LLC | http://www.sellmyhouseinomahafast.com
The best strategy that i was told was, invest in 3 to 5 markets no more. find your first and build a good amount of rentals, then rinse and repeat. By the time you build your 4th or 5th market, you will be ready to upgrade (to hotels) in the first market that you started in. your first market should be your backyard. Because that is where you will learn and be able to make more mistakes but won't cost you as much. Happy investing!
I am partial to KC but I agree with @Owen D. get to know your new backyard. If the assets in that market meet your investment goals focus there for a while.
David O., Bridge- Turnkey Provider
Yeah Omaha is one of those markets you rarely hear anyone talking about, but is doing good. I will have to do a lot of research on the area, but of course anything I buy there will be a house hack.
Yeah, I don't want to spread myself too far. I'm already investing in two different cities. I like certain aspects of Arizona, but the market in Phoenix is just too hot, and Tucson is like the polar opposite, and we aren't seeing enough strength in the local economy.
I will always be partial to Kansas City, and hope to one day be able to move back there. That is part of the reason why I want to invest there. However the ability to get another FHA loan may make it easier for me to invest in Omaha.
If you relocate, you definitely need to look for as least 1 property (4plex perhaps) where you can live while working. I am sure you do not want to pay somebody else mortgage by renting,..,.
I would ask, how long do you think you will be in Omaha? It's a great market right now. I would seriously consider it. There is a Great REIA group in Omaha, so you can find lots of contacts and support quickly.
i look at it a few different ways, i dont think its a bad idea to diversify. This will limit your risk and as you said, your other propertys have PM, so not a major headache for you. People that have all their eggs in 1 basket get crushed. If 1 market goes bad or has major appreciation, it could be a good thing or a bad thing. Realistically, its all about the investment and whether or not you think you can make money there. If it doesn't work out in Omaha for whatever reason, yoy could always sell and buy more in AZ.
@Anthony Gayden -I agree with the others, if I were you I would definitely invest in Omaha where you will be living instead of several hours away in Kansas City. Having bought several investment properties in my own back yard, I know how much time that takes and effort is involved, I can't imagine trying to do that 2.5 hrs away or more.
Then when you eventually move to a different city you will be diversified!
I am somewhat experienced with investing from a distance. I bought my 4 plex in Phoenix while living 3 hours away on the other side of Arizona. It isn't easy, but it is possible, especially since I know the market in KC so well.
I honestly don't know how long I will be in Omaha. I could possible stay 10+ years. My goal has always been to eventually transfer back to Kansas City. I have already been gone for 4 years, and I may spend another 5+ before a position in Kansas City opens for me.
I also agree that Omaha is a great market, and a hidden jewel. There isn't a lot of talk about the area, but it has always had steady growth, low unemployment, and a strong economy.
I'm not too afraid of diversifying, I really wanted to have all of my properties located somewhat nearby so that if I ever wanted to take over property management, I would be able to do that. Since Tucson and Phoenix are close, I could live in either place and manage properties in both. However if I am spread all over the country, I will be forced to always outsource management. That isn't necessarily bad, but something to keep in mind.
As far as owner occupying a multifamily in Omaha, that is the plan, hopefully purchased with an FHA loan. I would love to move into A class areas in the Omaha market, such as Papillion, but I'm not sure if there is much multifamily there. Even a duplex would work.
We've done some great flips in Bellevue and are currently rehabbing a SFR in Plattsmouth. Let me know if I can help you find something.
@Anthony Gayden Personally I wouldn't even consider where you may or may not end up living. I'm a believer in investing in the markets that best meet your investment objective. Whether you'll be living in AZ or not, I don't think it's the best market today. I think like several markets, Phoenix has been played out for a couple of years now. Prices have been pushed up too much to get a good return. Omaha on the other hand is still a strong cash flow market. Whether you transfer back to Kansas City or not, I would consider KC very seriously. Kansas City is another great cash flow market.
Omaha, gretna, la Vista. All good places to find sfr. I haven't seen any four or triplex for sale tho. :-/
There are deals to be made in every market, the key is to know your market. The best markets are those that you can relate to and know how they function. If you are investing in a new market the most important thing you can do is develop a team that understands your investment strategy and that you can trust to execute you plan.
As for us, we count warm bodies. As long as a market continues to attract new residents, there will be a need for housing, our goal then is to deliver on that demand.
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