What are the pros and cons of these markets?

Question

I am about to graduate from college and can move to 1 of 3 places, Denver, Dallas, or Minneapolis. I'm wanting to start building a portfolio focused on a residential BRRRR strategy that will end in several apartment complexes. That are the benefits and downsides of each of these markets, states, and surrounding areas? How can I do an analysis of this? What do you look for in a market?

Russell Brazil · Answer

Choose the city you want to live in and tailor your investment strategy around what that market gives you, not the other way around.

Personally of those 3 cities the only one I'd consider living in is Denver.

James Carlson · Answer

Hey @Anthony Gayden . Did not mean to get too serious or offend anyone. Just a little playful trash talking. And I tried to say that I was only talking about lifestyle, not real estate.

I think Minneapolis is a really cool city, some really interesting areas ... but it is demonstrably colder and snowier in the winter. Average high temperatures in Minneapolis in December, January and February - 27, 24, and 29. In Denver, it's 45, 45, and 46. Minneapolis gets 45 inches of snow a year. Denver gets 25.

I think a lot of people have old stereotypes about Denver being a cold and snowy place. It snows often but not a lot and the next day it's 45 and sunny and the snow is gone.

Real estate wise, Denver's a pretty tough market to find things that make sense. Margins are just smaller than probably the other two markets. But gosh, @Camron Stewart you get to live in Denver! (Especially if you're from Provo, you'll feel at home in Denver.) Good luck on your dive into real estate.

Tom Cramblit · Answer

I currently live in Minneapolis and have friends that live in Denver. They are both good rental markets but I know prices are rising in Denver. If you're looking at owner occupant type situation, I would just weight your preferences for life style and look at how much you'd be making in the 3 cities and compare those entry home prices to see how the numbers work out.

Anthony Gayden · Answer

ROFL at someone from Denver saying it's cold in Minneapolis.

Your comments reek of old stereotypes that have nothing to do with reality.

Perhaps instead of worrying about ridiculous things like beer and pot smoking, you should say why Denver beats the other cities for RE investing.

Jay Hinrichs · Answer

one is really hot  one is freezing and one is just right

James Carlson · Answer

@Camron Stewart, I'll leave the investment analysis to others, but for lifestyle, it's a no-brainer. Minneapolis is a really cool town ... half the year. The other half, it's Siberia. Dallas ain't bad, but it's a sprawling mess that's hot as Hades half the year. I would of course vote for our fair city of Denver. 300 days of sun. Legal pot, if that's your thing. The best craft beers. Tons of different cool pockets to live in (if you can afford it). Oh, and the mountains are an hour away.

Harrison Liu · Answer

From RE point of view only I'd choose Dallas. Especially if you want to invest in apartments for cash flow. Texa is also landlord freindly which we don't have here in Seattle. The rent to own ratio is also favorable in Dallas.

Josette Reynolds · Answer

All three are booming for Investing! I don't think you'll struggle for long in either one.  MN-is constantly developing and maintaining what they currently have.  TX-no matter where in TX, you're sure to win! CO-well, let's just say there's a lot of GREEN there$$! Good luck with your decision and be sure to get a Mentor.

Brett Chaponot · Answer

Are you going to be working in another industry or focusing only on the real estate portfolio? I have Denver real estate properties that do very well because of the high cashflow and low mortgages. But the market is catching up. Property values have gone up 30% in the past year and a half. As far as analysis, look up area job growth, cost of living, and main area industries for external influences. And property costs vs. rental potential. You may find more value today in Dallas with a depressed oil economy, but it's still a very diversified and thriving economy. But as a young professional you should look at what area makes you happy and live in your units for 2yrs to get primary residence status and sell them after another 3yrs of renting. Consult your CPA because the tax strategy is a key component.

What are the pros and cons of these markets?

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