What states would you invest in today?

23 Replies

I know it's always changing. Based on the little research I've been doing I hear that Florida and Pennsylvania are currently great states to invest in. Something to do with the ratio of the average income of the individuals living there to the current growth of the population. Have anyone felt this to be true? If not what State do you feel would be a great place to start an investment journey?

A little background on me. I'm from Boise Idaho and the market here is pretty insane. I've got a real estate agent sending me deals so I can get practice analyzing. I'd love to connect with investors in the area who would be interested in reviewing any deals I find. Because my capital is low right now I don't feel comfortable buying my first property where I live. I'd like to invest out of state with something smaller with a good cash flow to get going. Once I settle on a location I'd like to find an agent and start working with them to analyze deals in a very specific location. 

The short version of this would be:

- What states would you invest in and which states would you avoid?

- Based on my outline above, can you find any flaws in my plan? Would you recommend I change anything?

Nebraska is great, though our real estate taxes are way high. Omaha and Lincoln have fared well even during recessions. Growth is steady, income to rent ratio is fair. Iowa, parts of Michigan, Ohio, Missouri and Kansas are all great states as well.

The Boise market is insane. I have a close friend who lives in Meridian, and he had owned three rentals at one point, so we always talk about partnering, but I can afford 3 separate houses for the price he could get one. Makes it tough to do business out there. Best of luck!

I only invest in major metro areas, DC Boston, Charlotte. Though Im thinking of liquidating my Charlotte properties and moving that capital back into the northeast. 

@Gary Honda There is more to Idaho than just Boise. One thing to keep in mind as well, some markets that have lower priced properties that may cash flow on paper, does not necessarily mean they will cash flow well. Some of those lower priced properties will also have more turnover, more repairs, more evictions, etc. So if you don't have a lot of capital you may want to stick with something safer to avoid higher costs. There are several reputable turnkey companies that could be a good fit. The main thing is to find an excellent property manager. Whether it be class A or class D, a great property manager will make a lot of difference.

Originally posted by @Gary Honda :

I know it's always changing. Based on the little research I've been doing I hear that Florida and Pennsylvania are currently great states to invest in. Something to do with the ratio of the average income of the individuals living there to the current growth of the population. Have anyone felt this to be true? If not what State do you feel would be a great place to start an investment journey?

A little background on me. I'm from Boise Idaho and the market here is pretty insane. I've got a real estate agent sending me deals so I can get practice analyzing. I'd love to connect with investors in the area who would be interested in reviewing any deals I find. Because my capital is low right now I don't feel comfortable buying my first property where I live. I'd like to invest out of state with something smaller with a good cash flow to get going. Once I settle on a location I'd like to find an agent and start working with them to analyze deals in a very specific location. 

The short version of this would be:

- What states would you invest in and which states would you avoid?

- Based on my outline above, can you find any flaws in my plan? Would you recommend I change anything?

It does not matter where you start as long as you develop your Core 4. The core 4 is David Greene’s strategy for long-distance and made up of a realtor, contractor, property manager, and lender. Once you have this team in place, you should be able to confidently invest in any market.

As for picking a specific market - I would go after one with an increasing job and population growth. I invest and work in Columbus, Ohio. I am also looking to invest in Cincinnati and Cleveland.

You said "cash flow" was what you were looking for out of state. Well, there are many states that can give you "cash flow" but they are not equal in returns or equal in being landlord-friendly. If you want double-digit cap rates and COC returns that are landlord-friendly, I have found that KC and OH have been great at delivering those types of returns. I hope that helps and best of luck!

Kansas City. Price wise you can find properties 100-200K with COC 6-10%. Also ideal for BRRR's. Hot market just like any other area but you can find deals

@Gary Honda That's too broad of a question. You need to narrow it down to an MSA or city. Looking at an entire state is only helpful with statewide factors like landlord/tenant laws and property taxes, other than that, the markets will vary within a state. Start by defining your goals and criteria and then identifying the markets that fit you're investment objectives. The Midwest is one of the best regions for cash-flow. I like Indianapolis, Kansas City and the Quad Cities (Iowa side) myself. 

Hi @Gary Honda where should you invest? Well what markets are you familiar with? My first suggestion for new clients or mentees is try to invest within 1 hour of where you live. That way if you need to go visit the property it’s not a huge hassle and since it’s nearby you can compare it to the market you live in and pull in some very relevant data into your analysis. 

If you can’t invest within 1-2 hours of where you live or if you told me you were moving in 2 years and didn’t know where to yet, then I’d say pick a market that you know or at least have friends and/or family established in the area. By having some familiarity with it and a support network in place it’ll limit your risk of making a foolish mistake. Remember when you’re buying out of state you’re competing against people who live in the area, many of which with an established portfolio already. The chance of getting adversely selected against because your competition knows more than you do about the location is very high.

For example when I started out we invested in a small town in northern NH called Littleton. We did that because my in-laws were retiring there and we were going up there monthly to enjoy the cabin they built. We knew the area and had an excuse to visit regularly. Would I suggest you invest in Littleton NH? Probably not, unless of course your in laws were retiring there.

That’s just my 2 cents. I hope it helps and I wish you the best of luck!

Jon

Hi Gary, I'm from Indy. I started my real estate journey here in Indianapolis. I must say it's pretty good. Now, I have more than a hundred doors. I would love to chat and share my experience if you're interested.

Hello to all -

There has been a good deal of great ideas on this thread.  My vote is for KC. There are still great bargains to be had and the city is quite stable.  When you are building your team, it is important to have good boots on the ground.  If I can be of any assistance, please reach to me.

Best,

Melinda

@Gary Honda

Everyone out there seems to be struggling finding cash flowing deals right now. Finding cash flowing deals is in Metro Detroit Michigan is like shooting fish in a barrel. Our team has 35 deals under contract right now for investor clients. ALL great buy and hold deals in good locations. A lot of our clients are repeat buyers because they love them.

I’m trying to get to 30 doors here in the market myself, then once I have that, I’ll diversify into other markets. Just can’t pass up the great cash flow, roi, and locations here right now to get an initial portfolio built.

Originally posted by @Gary Honda :

I know it's always changing. Based on the little research I've been doing I hear that Florida and Pennsylvania are currently great states to invest in. Something to do with the ratio of the average income of the individuals living there to the current growth of the population. Have anyone felt this to be true? If not what State do you feel would be a great place to start an investment journey?

A little background on me. I'm from Boise Idaho and the market here is pretty insane. I've got a real estate agent sending me deals so I can get practice analyzing. I'd love to connect with investors in the area who would be interested in reviewing any deals I find. Because my capital is low right now I don't feel comfortable buying my first property where I live. I'd like to invest out of state with something smaller with a good cash flow to get going. Once I settle on a location I'd like to find an agent and start working with them to analyze deals in a very specific location. 

The short version of this would be:

- What states would you invest in and which states would you avoid?

- Based on my outline above, can you find any flaws in my plan? Would you recommend I change anything?

Houston, TX lately. 

Michigan, especially Detroit, has been considered part of the Midwest Rustbucket for some time and ignored by investors.

That just leaves more deals for investors that understand the market!

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