Best Place to Invest in Multi-Family Homes in US

21 Replies

I live in San Diego but the real estate market is extremely prohibitive and too many people rely on appreciation as cash flow from rentals is so tight. I am looking for alternative markets to buy low cost multi-family units. Any suggestions? I heard Utah and Cleveland were good markets giving high yields for rentals. I also heard you can buy units in Midwest for $60k. 

not so much for Utah if your looking for the 1% rule. Still some decent rentals and my wife have one in a Salt Lake Suburb but the California crowd has been moving here for the last few years and any duplexes on the MLS become bidding war stomping grounds.

Originally posted by @David Lowe :

I live in San Diego but the real estate market is extremely prohibitive and too many people rely on appreciation as cash flow from rentals is so tight. I am looking for alternative markets to buy low cost multi-family units. Any suggestions? I heard Utah and Cleveland were good markets giving high yields for rentals. I also heard you can buy units in Midwest for $60k. 

 There is definitely an abundances of cheap rental properties in the Cleveland market. Very important to note that cheaper isn't always going to equate to better. Some neighborhoods are very high risk while others still provide a low barrier to entry with a much lower level of risk. For more information on the different neighborhoods in the Cleveland market check out The Ultimate Guide to Grading Cleveland Neighborhoods.

@David Lowe     You should reach out to @Michael Swan   He's right there in the San Diego area and he invests quite a bit in Northern Ohio......He can give great tips.  Also look at what @James Wise   has put out about Cleveland.        I happen to be biased toward Cleveland myself since I've got 3 rentals there.

If you're looking for a company that does property management AND has real estate agents you can't go wrong in Cleveland if you reach out to Holton-Wise. I was very impressed when I flew out to Cleveland last year and met some of their team and saw their office as well as looked at properties.

I will caution you that there are A LOT of tire kickers out there.....especially from California so you should definitely get yourself pre-approved with some sort lender, .....otherwise, you may not be taken as seriously.

@Brian Garlington Great tips. Thank you. How is Oakland? I heard you are growing fast and all the Bay Area people are overflowing into that area. Street art scene also good right? Just connected with you. Would love to talk for 2 mins to learn about your Cleveland experience if you don't mind.

@David Lowe   Always people moving into Cali......ESPECIALLY the Bay Area....now a lot of the people who were in San Francisco are coming over to the East Bay and in particular Oakland....thus driving up the price of housing in Oakland......Which I am not mad at because it can have a positive affect on my rentals in Oakland and Concord.  I just PM'd you back

@David Lowe

We are very active in the Pueblo West Colorado area. I have always invested in a rural area within an hour of a fast growing urban area like Colorado Springs. Very little inventory in Colorado Springs so it drives people to live in Pueblo West.

@David Lowe Hey! We searched high and low for about 2 years while living in the Bay Area for an excellent market. We ended up relocating to Raleigh-Durham NC largely because of the RE investing potential. I've helped several clients close on properties at 1% rule or better- you can get a decent duplex for 200k and quads come up fairly often. Finding properties that cash flow is not a problem here and you also have the long term equity bonus for an area that is very much on the rise.

@Heather Hopkins I appreciate your offer of support but $200k buy in is way too high. I'm keen on markets offering that for $60k. Also, cash flow preferred as "appreciation is speculation" and not guaranteed. What are rental yields like if I look at Raleigh down the line? 

Originally posted by @David Lowe :

@Heather Hopkins I appreciate your offer of support but $200k buy in is way too high. I'm keen on markets offering that for $60k. Also, cash flow preferred as "appreciation is speculation" and not guaranteed. What are rental yields like if I look at Raleigh down the line? 

$60K for a quad. Your probability of finding that in Raleigh NC is about the same as your probability in San Diego. Try Raleigh, TN maybe....

Have you looked into the tri-cities or Spokane market, Washington state? Many of my clients are out of state and purchasing single family residents for 100k-150k and turning around and renting them from $1k-1500 per month. Also the multi family from $150-200k is hands down a great deal. Shoot me a message, would love to chat.

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