Best markets to create passive income?

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Best markets to create passive income?

Bret Maryon
Real Estate Agent and Investor · San Jose, CA · Member since 2015 · 4 posts · 8 votes

Curious what the best markets are right now for cash flow/creating passive income. I'm leaning towards multifamily rather than single family homes.  I live, work, and own real estate in the Bay Area however I'm starting to look out of state.  My goal is to generate an additional 20k per month of passive income over the next 3.5 years.  Any suggestions you have would be great! 

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Cameron TopePro Member
Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
5y

Hey Bret,

This question comes up a lot as investors are looking for the elusive cash flow in the current market. 

There are thousands are areas with great cash flowing rentals. However, it comes down to where you have a competitive advantage. If you don't have a team or any insight into the market then you're just another number on a wholesalers spread sheet. Sure, you'll get deals sent to you every week but you won't know the difference between the great investments and the mediocre ones. 

I invest in the Greater Houston market because I live here and have a great team. I also invest in Athens, OH where my Dad's a local contractor. 

The secret is to invest where you have (or can create) a competitive advantage. 

Best of luck!

[email protected]832-770-7090
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  • Cameron TopePro Member
    Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    Hey Bret,

    This question comes up a lot as investors are looking for the elusive cash flow in the current market. 

    There are thousands are areas with great cash flowing rentals. However, it comes down to where you have a competitive advantage. If you don't have a team or any insight into the market then you're just another number on a wholesalers spread sheet. Sure, you'll get deals sent to you every week but you won't know the difference between the great investments and the mediocre ones. 

    I invest in the Greater Houston market because I live here and have a great team. I also invest in Athens, OH where my Dad's a local contractor. 

    The secret is to invest where you have (or can create) a competitive advantage. 

    Best of luck!

    [email protected]832-770-7090
    9Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    5y

    Birmingham, Atlanta, Indianapolis, St Louis, Kansas City, Memphis, Little Rock, Indianapolis, Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets.

    6Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Bret Maryon:

    Curious what the best markets are right now for cash flow/creating passive income. I'm leaning towards multifamily rather than single family homes.  I live, work, and own real estate in the Bay Area however I'm starting to look out of state.  My goal is to generate an additional 20k per month of passive income over the next 3.5 years.  Any suggestions you have would be great! 

     What's up Bret? I would check out Columbus, OH. 

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Bret Maryon:

    Curious what the best markets are right now for cash flow/creating passive income. I'm leaning towards multifamily rather than single family homes.  I live, work, and own real estate in the Bay Area however I'm starting to look out of state.  My goal is to generate an additional 20k per month of passive income over the next 3.5 years.  Any suggestions you have would be great! 

     I second checking out Columbus, Ohio

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    1Reply
  • Stephanie Assi
    Investor · Washington D.C. Metro area · Member since 2020 · 13 posts · 7 votes
    5y

    Any specific areas to avoid in Columbus? I would also be looking to build my core 4 there so I am open to recommendations

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Stephanie Assi:

    Any specific areas to avoid in Columbus? I would also be looking to build my core 4 there so I am open to recommendations

     I am open to investing in all of the areas in Columbus. A deal is a deal.

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    1Reply
  • Bill P.
    Investor | Syndicator | Instructor · Cincinnati, OH · Member since 2008 · 435 posts · 198 votes
    5y

    @Bret Maryon I love for Cincinnati but then I'm biased. Been doing it here successfully for years.

    0Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Stephanie Assi:

    Any specific areas to avoid in Columbus? I would also be looking to build my core 4 there so I am open to recommendations

     I would agree, all areas of Columbus are on the upswing. 

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Bret Maryon

    There are several benefits why any savvy investor will also like to consider Houston for their Real Estate Investment. 

    I have been living in Houston for 7-years and I personally invest only in the Houston areas and I have been helping other investors to invest in Greater Houston and surrounding cities. 

    As a Realtor and Investor myself, below are a few reasons why my clients and myself invest in Houston, Texas

    #1 Market in the US for Job Creation

    • Contrary to what the majority of out of state investors believe, Houston not only have Oil & Gas (Energy), Houston has other job growth in Consulting, Information Technology, Aerospace and aviation, Medical treatment and Research, Goods Distribution, and Manufacturing. The port of Houston on the Gulf of Mexico imports more goods than any other port in the United States.

      • Texas legislation has provided a great economy for businesses to thrive. Big and small companies alike have chosen Houston for the location of their corporate headquarters.

      4th largest city in the US - This has increased the housing demand in the Houston areas and landlords are enjoying low vacancy and rent increase. Even during this COVID-19 Pandemic. I am living proof.

      5%-20% below current fair market value - This is gradually changing and the market is very hot right now. Nevertheless, Houston is still a relatively cheap and better use of cash on cash return. Some parts of Houston are seeing around 15% returns consistently.

    • 3-year appreciation forecast of 12.5% - We are able to enjoy both appreciation and consistent cash flow.
    • Houston is very diversified and friendly so people like it here. 
    • Our food, people and culture is what people like about Houston
    • The majority also enjoy the weather here also.

    Houston checks all boxes for me and my investor clients both in-state and out of state investors.

    Goodluck on you goals!

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    3Reply
  • Shannon Green
    Member since 2020 · 10 posts · 1 vote
    5y

    @Wale Lawal hey sir, I’m new to investing here in Houston and looking for additional resources here. Could I connect with you ?

    0Reply
  • Filipe Mendes
    Investor · Tampa, FL · Member since 2020 · 1 post · 0 votes
    5y

    @Wale Lawal hi Wale, I am looking for a SFH rental property 3/2 from 50k to 90k which good give me a good cash flow in the Houston area. If you have any opportunities that meet my numbers, I'd be glad to receive the details. Thank you.

    0Reply
  • Timothy Lewis
    Investor · Miami, FL · Member since 2013 · 377 posts · 258 votes
    5y

    Take a look at Memphis

    1Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    5y
    Originally posted by @Wale Lawal:

    @Bret Maryon

    There are several benefits why any savvy investor will also like to consider Houston for their Real Estate Investment. 

    I have been living in Houston for 7-years and I personally invest only in the Houston areas and I have been helping other investors to invest in Greater Houston and surrounding cities. 

    As a Realtor and Investor myself, below are a few reasons why my clients and myself invest in Houston, Texas

    #1 Market in the US for Job Creation

    • Contrary to what the majority of out of state investors believe, Houston not only have Oil & Gas (Energy), Houston has other job growth in Consulting, Information Technology, Aerospace and aviation, Medical treatment and Research, Goods Distribution, and Manufacturing. The port of Houston on the Gulf of Mexico imports more goods than any other port in the United States.

      • Texas legislation has provided a great economy for businesses to thrive. Big and small companies alike have chosen Houston for the location of their corporate headquarters.

      4th largest city in the US - This has increased the housing demand in the Houston areas and landlords are enjoying low vacancy and rent increase. Even during this COVID-19 Pandemic. I am living proof.

      5%-20% below current fair market value - This is gradually changing and the market is very hot right now. Nevertheless, Houston is still a relatively cheap and better use of cash on cash return. Some parts of Houston are seeing around 15% returns consistently.

    • 3-year appreciation forecast of 12.5% - We are able to enjoy both appreciation and consistent cash flow.
    • Houston is very diversified and friendly so people like it here. 
    • Our food, people and culture is what people like about Houston
    • The majority also enjoy the weather here also.

    Houston checks all boxes for me and my investor clients both in-state and out of state investors.

    Goodluck on you goals!

    Ive actually seen a big exodus from Texas to Ohio. Is this due to rising prices in texas?

    0Reply
  • John Hilyard
    Rental Property Investor · Oklahoma, OK · Member since 2018 · 29 posts · 7 votes
    5y

    @Bret Maryon Something Ive noticed is that it's sometimes harder to get good deals in a larger city. I look for medium-sized towns that have good industries for bringing in well-paying jobs (military bases, refineries, wind-energy, etc blue-collar high-paying). In areas like this dont even put a sign in the yard, just put the listing on Trulia.

    0Reply
  • Andrew Weiner
    Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
    5y

    I have been very successful with cash flowing properties that average over 10% in the stable areas of the Cleveland suburbs. If the COC is too high then you have to watch out, it is probably too good to be true. I think there are several areas in Cleveland that can provide very good long term returns but it really depends on they types of properties you want to invest in and the amount of capital you have available.

    0Reply
  • Ed Moran
    Rental Property Investor · Boston, MA · Member since 2019 · 134 posts · 50 votes
    5y

    @Lane Kawaoka had me at Tampa 👍🙏

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y
    Originally posted by @Filipe Mendes:

    @Wale Lawal hi Wale, I am looking for a SFH rental property 3/2 from 50k to 90k which good give me a good cash flow in the Houston area. If you have any opportunities that meet my numbers, I'd be glad to receive the details. Thank you.

    Yes, you can get that as fixer-upper. Call me to take this offline. 

    Thank you

    [email protected]832-776-9582Podcast Guest on Show #469
    NETWORTH BUILDERS5236 Reviews
    WebsiteView Page
    0Reply
  • Tyler Tapley
    Real Estate Agent · Memphis, TN. · Member since 2018 · 175 posts · 101 votes
    5y

    We're seeing consistent cash-flow opportunities in Memphis. With rates being low and housing prices rising nationally, we're seeing a lot of portfolios hit the market from seasoned investors as well as a number of homeowners offering their homes up for sale.

    0Reply
  • Tom Wagner
    Real Estate Agent · Minneapolis · Member since 2019 · 338 posts · 219 votes
    5y

    When evaluating a market for cash flow, one thing I think people miss is a market's *potential* for cash flow. Cleveland and Columbus both have great cash flow, though it may be lower in Columbus now than it was a few years ago.

    Consider the following two hypothetical but realistic deals:

    Columbus SFH, $250k, $2,200 in rental income

    Cleveland SFH, $250k, $2,600 in rental income

    When evaluating a deal for cash flow people many people would lean towards the Cleveland house, but I think that would be a mistake, as Columbus has a much higher likelihood of rental and property appreciation, for a variety of reasons.

    Sure, cash flow is important, but singularly focusing on cash flow is a mistake.

    1Reply
  • Matthew Lopez
    Member since 2020 · 15 posts · 5 votes
    5y

    Hi @Bret Maryon this is a great question. I’ve seen much success with investing in land - due to the tens of millions of parcels out there. I’ve talked to many people that have created a passive income with investing in undervalued vacant land!

    0Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    5y
    Originally posted by @Tom Wagner:

    When evaluating a market for cash flow, one thing I think people miss is a market's *potential* for cash flow. Cleveland and Columbus both have great cash flow, though it may be lower in Columbus now than it was a few years ago.

    Consider the following two hypothetical but realistic deals:

    Columbus SFH, $250k, $2,200 in rental income

    Cleveland SFH, $250k, $2,600 in rental income

    When evaluating a deal for cash flow people many people would lean towards the Cleveland house, but I think that would be a mistake, as Columbus has a much higher likelihood of rental and property appreciation, for a variety of reasons.

    Sure, cash flow is important, but singularly focusing on cash flow is a mistake.

     Well put. 

    1Reply
  • Erin Dorsey RobinsonPro Member
    Real Estate Agent · Cleveland, OH · Member since 2020 · 280 posts · 365 votes
    5y

    @Bret Maryon my husband and I are realtors and investors in Cleveland. So I am definitely biased but we have been very successful with our investments here, as have our clients. We have had a lot of people from the coasts looking to get started in Cleveland for the same reasons that have been mentioned by others here. Certainly there are a lot of factors to consider. Cash flow is important, but I’d also say that the best place to start also has to depend on where you find a team you can trust to be your eyes and ears. Happy to talk further if you ever want more insight on Cleveland. Good luck!

    [email protected]
    0Reply
  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    5y

    @Bret Maryon Take a good look at the Milwaukee WI market.  I started as a cash flow investor but have transitioned to more equity plays.  The market has a bit of everything.  All the best.  Also I don't live in the market.  My company is based in New York.

    0Reply
  • Jeremy Trad
    Real Estate Broker · Milwaukee, WI · Member since 2016 · 121 posts · 81 votes
    5y

    Milwaukee has been booming! Would love to chat to discuss your passive income goals and see if the Milwaukee market would be a good fit for you.

    0Reply
  • Sean Toomey
    Deer Park, NY · Member since 2016 · 115 posts · 85 votes
    5y

    @Bret Maryon

    I've had a lot of success in Memphis. I own 10 SFR now and returns have been pretty good.

    0Reply
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