Finding your Buy and Hold Market of Choice

5 Replies

As a newbie, I am using multiple resources to gauge where the best markets for buy and hold are right now. Specifically looking at where turn Key investors are working, reading a ton of forums; Money and Kiplinger's magazine publish several articles a year that I digest about best cities to live in, retire in etc.  and offer great insight into housing prices, average local income, growth and more. I am looking at the properties in the marketplace, trying to discover trends or hotbeds. I have looked at various deals using the calculators;  there is probably a winner in every county so I'd really like to find 'my region' before microanalyzing every last detail and property.  This has been my process thus far. 

My question is two fold: 1) any unique or unexpected tips on finding that one market you want to become an expert in and 2) when do you know you are ready to start sending offers? 

Thanks again, the dialog and insight from seasoned investors is invaluable!

@Valerie K. you can be successful or totally fail in the same market. There is a lot that depends on the team you're working with. If you find an area that interests you I'd look into teams that have a had a lot of success and start narrowing your decision by team. So you've got a great team and OKC and a great team in IN, who has had more success? Who's reviews are better. Who can provide you with more information on past deals and connect you to recent clients. That's what would make my final decision. You can get great deals in a lot of markets, but your team makes or breaks you! 

Thanks Kiera!! How do you go about finding a team? Seems if you want MLS properties or otherwise advertised deals the marketplace here is a great place to start. Many I am seeing wear the hat of realtor/property manager and I am assuming have a team for title/escrow and contractor they work with. Do you start with whoever is listing the property? I am interested in wholesale opportunities too and some of those are easier to find than others. Thanks again!

@Valerie K. start by studying the economic and demographic trends in a number of MSA's. The most important things to look at are 1. population growth, 2. Job growth, 3. Income. Next, drill down and learn what the property tax and insurance rates are. That will make a difference in cash flow. Once you've identified a market, the spend time getting to know the neighborhoods and what areas fit your criteria. This is as important if not more important than choosing a market. Personally, I like Indianapolis and Kansas City. Both markets have a good combination of strong economic/demographic trends and good cash flow. If you want some insight on either, I'd be happy to help.

Darius, I live in south Orange County CA- a wonderful place to live, though very expensive. It is an area that has had big returns in the last 20 years but 1) I think we are at top of market again, 2) they don't cash flow at all.  It is a great area to own and invest but institutional investors swoop in and pay cash for places ALL the time. The median home price of those listed right now is $798k.  I will say that I have seen friends manage (after the 08' implosion) to buy short sales at 650k that are now 1.3 to 1.4. My original neighborhood that was built around 1997 in Aliso Viejo- friends there bought at 210 and are at 750 on a bad day.  Equity millionaires everywhere but now is not the time.  There are probably some great flips out there but I want to focus on buy and hold in areas that cash flow for now.