Diversify my investments or stick to the same city?

Question

Hi there,

I have 2 MFU's in the Metro Atlanta area totaling 8 doors. I live in California (can't invest here, too expensive, and I am ok investing out of state).  I just started investing in late 2022 but my properties are pretty stable now and I have a PM in place that I can pretty well trust.  They also give me a discount for having more properties.  I am ready to buy a new property and am now wondering if I should stick to Atlanta since I kind of have the hang of it there. Or is it better to diversify and have some units or SFH in other cities?  Just wondering if I can get some advice from seasoned investors.  TIA

Caleb Brown · Answer

Stick to it. If it ain't broke don't change it. Continue to grow your footprint and relationships. Down the road sure you can expand but no point currently

Michele Velazquez · Answer

Thank you so much, this helps greatly

Michele Velazquez · Answer

Thank you, all such great advice!

Alecia Loveless · Answer

@Michele Velazquez Atlanta and Metro Atlanta are large enough that you could invest there for 50 years and still find deals that work. Since you have a solid team I wouldn’t recommend going elsewhere.

I have considered going elsewhere in my state because my cost of entry is high (not compared to California and places in NY and NJ) but then I read all the posts of contractors who steal and bad realtors and horrible property management and I think it’s better if I just get smarter and more creative in my own region.

Atlanta doesn’t have much snow to create huge winter heating bills and there’s likely to be less natural disasters. I think there’s a lot of good money moving there right now that should make for gentrification and growth and development in the next decade where you will be happy you have invested there. Continue to do your research and if possible visit there some to look for up and coming areas where you can get in on the ground level while development is just starting. You’ll make a ton of money.

Best of luck and happy investing!

Michele Velazquez · Answer

Thank you, so helpful

David M. · Answer

@Michele Velazquez

If its working stick with it.  No point trying to learn and keep up with new areas.  Also, you need to redevelop your network.

Travis Biziorek · Answer

Stay with Atlanta until it no longer makes sense for you and your goals.

That's my opinion. And that's what I do (heavily invested in Detroit and continue to do so).

People love to jump around and "diversify". I don't believe in doing that. You'll never build compounding returns on your knowledge, relationships, connections, deal flow, etc. by jumping from one market to the next.

You'll be able to do all of that by staying active in one market over several.

But again, if it no longer makes sense for your goals... that's the time to start thinking about a different market. Keep hammering on it until that day comes!

Andrew Postell · Answer

@Michele Velazquez yup, agree with the above. As a 15 year, out-of-state investor my recommendation is to ALWAYS choose whatever city you have the most trustworthy contacts in.  Keep in mind that you may never see your asset.  That's an ENOURMOUS amount of trust/money to put into a stranger's hands.  What I mean here is that if you know someone in a different city...but that city may not have as "good" as numbers as this other city...then stick with the city where you know people.  One wrong move, one wrong contractor, one wrong vendor…will erase any "benefit" one city has over another.  Your network is the most important piece for any potential returns when you invest out of state.

Michele Velazquez · Answer

Thank you for your response! I appreciate it ;)

Diversify my investments or stick to the same city?

Most Popular Reply