Newbie Wondering Where I Should Invest?

48 Replies

I am currently a senior in college and am giving thought about where I want to live once I graduate in May. I want to invest in buy & hold properties with good cash flow. I have heard Austin is a great place to live, but is the market there already too saturated? I want to pick a good real estate city because I'd love to invest full time. Where would you invest if you could move anywhere?

@Tasha Beal

I hate to be biased but certain areas in Chicago areas are pretty good for cash flow, a majority of the Midwestern cities in fact are. 

Scott Trench published a market report in 2016, and I think he's working on 1 for 2017.

The Best and Worst Markets for Residential Real Estate Investors, 2016

While choosing the area you want to invest in is important, your network is probably even more important! 

@Tasha

go with what you know. your own hometown, or even your college town.
these places you should have a feel for the neighborhoods. seen what is coming and what is going.

however, FL and PHX have large populations of people who are about to expire. probate properties could be a steady niche.

your degree, if you plan to use it for a career/job may determine a place to go. and you could learn from that. (silicon valley or seattle are for tech degrees. chicago, memphis, nyc for social work degree, etc...)

there are opportunities everywhere. and there's also the ability to invest from afar... so without more criteria as to what you want, it is hard to pinpoint a place.

@Chris T. Thank you for your response. The link you provided is very helpful and exactly what I was looking for!

@Lawson Ott Thanks for your insight! I definitely agree that it is best to invest where you have a feel for the area, and many cities are great options.

@Tasha Beal welcome to BP!

As you probably know, Dallas is hands down the best place to invest right now..since you live in Dallas that's even better. Chicago area is great for cashflow, market has not appreciated yet as high as Dallas, Denver, Nashville etc..so still a good time to buy...for me I look at local areas first before going out of state. Since you are starting new I think it will be better to search in local areas but networking with local investors...You can try house hacking which is a great option for new investors.

@Dhru Das @Chris T. Hello you guys, I am kind of in the same boat as @Tasha Beal I am a recent college graduate and would like to start investing in multifamily properties. Preferably 1-4units in the Chicago land area and was wondering if you could offer some insight on which areas of Chicago I should be looking at?

@Sezuo Daudu check this Chicago area heat map that was provided here in the forums...This might help you. 

@Sezuo Daudu If you are able to house hack into a duplex / triplex I would highly recommend it. You can finance these for 5% down on a conventional note because it’s considered a primary residence. If not, find a good SFR in a neighborhood with good schools.

@Tasha Beal I’m also from Dallas and the market is incredibly hot which is difficult for new investors, let alone college graduates with student loans and typically lower income. I’ve had luck in Lubbock with renting to college students. Currently cash flowing $400/mo from my rental. I might look around Waco, College Station, Lubbock, Abilene, North of Houston if you want to stay in Texas. Homes aren’t as inflated and you can cash flow well from the university students. However they may not appreciate over the course of 20-30 yrs like a house in the major metro cities would. House hacking is 100% the way to go when you get your first job out though!

@Tasha Beal Don't get too concerned about hot markets at your age. You have a long investing horizon. All the markets will go through cycles for the next 50 years. I would avoid certain markets such San Francisco and such. I wouldn't let hot, yet still affordable markets scare you away.

There's allot of great markets for young people starting out. Weigh other factors such as opportunities for your career and enjoyment of a city.

As others have pointed out, consider a house hack as your investment. While you are living there get a good airline points credit card and fly out to potential markets to get to know them. Have fun with it!

Originally posted by @Tasha Beal :

Where would you invest if you could move anywhere?

 My recommendation for someone graduating from college who is interested in investing is to move near a major Metropolitan Area with amenities that you would personally enjoy that also has a major airport w/ direct flights to other cities that you may invest in.  

Originally posted by @Tasha Beal :

I am currently a senior in college and am giving thought about where I want to live once I graduate in May. I want to invest in buy & hold properties with good cash flow. I have heard Austin is a great place to live, but is the market there already too saturated? I want to pick a good real estate city because I'd love to invest full time. Where would you invest if you could move anywhere?

Are you going to live in the market you invest in? If so make sure you do A LOT of research. If not, you could go with a turnkey or property manager who really knows the area. 

You should look at: The Best Types of Markets for Profitable Turnkey Properties

@Dhru Das Thank you! I am originally from Dallas, but looking to move elsewhere after graduation. However, I have heard Dallas has a great real estate market, so maybe it's worth considering :)

@Kevin Levesque Thanks for you insight into the Texas market, I also like the idea of renting to university students. What is your opinion on the Austin market, and renting to college students around there? 

@Chris Lopez I plan to house hack for my first investment, I just need to find out where. I want to get started investing right after college, which is why I am wondering if there are any great places to move to. But as you've mentioned, I'm sure there are opportunities everywhere! Thanks for your reply!

@Crystal Smith Thanks for your comment Crystal. I want to move near a major metropolitan area because there are many opportunities and it's fun being near the hustle and bustle of things - and I'm sure big cities provide great real estate markets!

@Tom Ott Hi Tom, yes I plan to live in the market I invest in. For starting out, I think that is the best option so that I can manage my properties and be there for them in case anything happens. Maybe in the long run I'll invest elsewhere, but for now I'd like to be close to my properties. By "make sure you do A LOT of research," do you mean in terms of researching where I move to in order to make sure it has a good market?

It may sound a little stodgy to say this but if you tactic is buy and hold then you have to be thinking about tax rates and state income taxes. Tennessee has no state income tax and is one of the absolute lowest property taxing states in America. Add to that the appreciation in the main cities of Knoxville, Nashville and Memphis and the incredible tourist/renter community coming through here and you have a great money making opportunity. I think it is perhaps the best state in America right now for investing in real estate as far as being able to keep most of your money and find deals. 

Hope my shameless plug didn't put you off but I whole heartedly believe Tennessee is the way to go if you don't care where you end up after college. My office is choked full of Texans who migrated up!

@Tasha Beal , I am currently working with multiple BP investors interested in our BCS market. I agree with the sentiment about renting to college students. We have a wide variety of properties from turnkey all the way to in desperate need of renovations. Different investors prefer different avenues. If you think this market may appeal to you, id love to set up a phone call and explain everything my market may be able to offer you.

@Chris T. Thanks for the plug! Yes, those market studies come out when the data is available (and I have a good 5-10 hours to slog through it all and then write it up). So, expect it sometime mid-August. 

@Tasha Beal best of luck to you with whatever it is you end up deciding to do.

@Tasha Beal , congratulations on graduating soon and kudos to you for getting started in investing so young, that's great.

With investing, each day there are new opportunities and new expert opinions and with a post like this you will likely get a bunch of valuable yet conflicting ideas.  So with that said, 1.) you can invest wherever it makes sense and live where you want, 2.) develop a vision, criteria, objectives and then take action, be flexible, and repeat and adjust as necessary.  

It's an exciting time to be in the education/researching phase.  Research markets, be a savvy investor, and don't get emotional about real estate.  I invest locally and out of state and the more experience I get, the more I focus on the latter.  It just makes more sense for me and my goals.  BP is an amazing resource, use it to your advantage! 

@Zachery Buffin Thanks for the info on Tennessee, you're pretty convincing. Now I'll definitely have to look more into it!

@Chris Quinn I'll send you a PM, I'd love to learn more! 

@Scott Trench Thanks for compiling all of that data, it is very helpful! I look forward to seeing your next report.

@Ham Merritt Thank you very much, I appreciate it!

@Jennifer S. Thanks for your reply, I'm very excited to get started. BP has already been an great resource and I look forward to using it more and more as I get started. I know there are many good cities to choose from and everyone's opinion will be different, but it's helpful to hear about possible paths I could take!

Yes you should definitely look into Nashville. I've lived here my whole life & the property value has tripled & quadrupled in some places. Also there's no sign of stopping anytime soon

My recommendation would be to go live wherever YOU want to live.  Then figure out the local investing opportunities.  People have been successful in all markets.  It make take an extra couple years to reach your goals in some locations, but who cares. Say TOWN A would get you to your goals in 10 years, but it takes 13 years in TOWN B.... But if you are much happier living in TOWN B for those 13 years versus just eeking out an existence in TOWN A, that's an easy trade off and go where you're happier. 

Originally posted by @Sezuo Daudu :

Dhru Das Chris T. Hello you guys, I am kind of in the same boat as Tasha Beal I am a recent college graduate and would like to start investing in multifamily properties. Preferably 1-4units in the Chicago land area and was wondering if you could offer some insight on which areas of Chicago I should be looking at?

 What is your price range?  Will you be living in the property?  What are you looking to get out of the investment?  These questions greatly influence which areas will be best for you.  

Originally posted by @Dhru Das :

@Sezuo Daudu check this Chicago area heat map that was provided here in the forums...This might help you. 

 Where did you get this map?  I don't believe this is at all accurate.  East Lakeview, East Lincoln Park, Lincoln Square, Edgewater, Ravenswood, Logan Square, Avondale, and Irving Park are decreasing in value?  According to what?!

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