Which Market to Start Investing?

Question

Hello BP community,

If you could start your real estate investing career in any market in the country which would it be? Assume you have a fair bit of savings (over 100k), are 29 years old and have the flexibility to move anywhere in the country.

A little background—I've spent the last five years traveling the country for work but am finishing an MBA this spring and wish to settle in a growing market. I am looking at using the BRRR method to begin building a portfolio of single-family homes, but have also considered flipping, buying solely for rental or using a first time home buyer loan on a multi-family property (or a combination of these). I would prefer to live somewhere "out west" but I am looking at this from a purely economic standpoint so am open to any market that has a lower cost of living and decent median income.

Here are some of the markets I've started looking into: San Antonio, Fort Worth, Oklahoma City, Columbus Ohio, Ogden Utah and the Denver/Fort Collins area.

Thanks for any tips or advice.

- Kade

Kyle Mccaw · Answer

@Kade Ferguson I am familiar with San Antonio, Fort Worth, Oklahoma City and Columbus Ohio. They are each good places to invest. Each for different reasons. You can make money or loose money in any market. If you are planning to relocate to the market you invest in, just pick the place you would prefer to live.

Kade Ferguson · Answer

Thanks for the input folks, I appreciate it.

Tom Ott · Answer

I would recommend looking into Cleveland as well. The prices here are still very low, but the rent is going up. Stick to the suburbs where the prospects are a bit more appealing though. Good luck to you!

Michael Lewis Lee · Answer

Hello Leah!  I'm a little biased but several towns are good in Texas.  Just do whatever you like and study for it.  Continual education is part of being successful and will help you to prepare.  Do an evaluation on each property to lower your risk.  Many people think that RE is too risky but your knowledge actually makes you less risky for people that know how to do it right.  Some of your family and friends will try to tell you not do this but they probably have never been in RE investments but they have are in the stock market and just hope they don't lose any money and believe that diversification is the only way to go.

Who is this anyway?  I'm from Dallas Texas and was a licensed RE broker and construction manager, both for about 30 years.  There's many things to tell a starter which way to go or what city to go to.

Continue your education that reflects your niche decision.  Do not try to "cut corners".  Just start off doing average stuff in that area.  Don't try to be unique.  Do not assume that anything will take place.

Talk to building Inspectors to find out what they are looking for.  Move to an area that is having population and job growth and their economy is diverse.  It would not necessarily help you to be in a big ciry, like Dallas or San Antonio but OK to be fairly close as long as you are in a growth area.

Secondary sized cities may be the best and do not buy property more than about an hour away unless it's with a reputable Turnkey Company.  Keep as much control as you can.

Do not hesitate to ask questions here because alot of these members want to help you but some are just trying to sell.  There's much more to say but this is getting pretty long. Be patient and do not make emotional decisions.

Good luck to you!

Leah Stuever · Answer

I am partial to Fort Worth. A lot of good areas that are growing, strong renter market, and nice cost of living.

Alyssa Dyer · Answer

@Kade Ferguson OKC is great because there are deals through any part of the market cycle. Right now it's less distress, more buy and hold cash flowing stuff. In the downturn, of course, there will be a bit more room to purchase properties undervalue. It's not a HUGE market for distressed properties at the moment at least not to the point where you've got room to build in flips, but especially with local knowledge, it is doable right now.

From a cost of living standpoint, as you get started, it's incredible.

Erik Hatch · Answer

@Kade Ferguson where are the jobs and population growth?

Michael Lewis Lee · Answer

Thanks for your time!

Subbie Kaur · Answer

Hey @Kade Ferguson

Out of state investing is great as long as you find a market that has the following main things mentioned below. I just wanted to give you breakdown of what we look for in any market before investing in it:

1. RENT TO VALUE RATIO. This is the biggest determinant of cash flow. Make this your benchmark when you search for new markets if your goal is to be a cash-flow investor.

2. Go for low property taxes and landlord-friendly laws. Investor-friendliness and having a positive, low-stress OOS experience go hand-in-hand.

3. A property manager who can educate you on a market, help you form a strategy, fit right into your due diligence process, and execute on a clear takeover game plan as soon as you hold title. Research and contact several property managers in the area, ask any questions you have, if they are willing to help you with that then you are going one step in the right direction.

4. Rental Demand: This keeps vacancy and turnover down (resulting in lower maintenance too), and tenants tend to behave because they know your place is a hot commodity.

These things will really allow you to have a much more positive experience as an Investor! Good luck with MBA and Investment Journey!

Which Market to Start Investing?

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