Why I love Mississippi Real Estate
I accidentally stumbled into something and I'd like some feedback. As both an agent and investor, I've been doing research on a few areas to see which markets offer the best returns for both myself and my clients. I've recently been a part of several conversations with other investors from major markets who are currently parking cash into buy and hold properties. I'm currently wrapping up a few fix and flips and considering a possible new construction build with the intention of shifting my focus back to buying and holding.
Most of the markets are midwest towns, but after a few of these conversations I'm falling in love with the Mississippi Gulf Coast. I'm writing down some of my findings. Would love to hear feedback!
- The State of Mississippi is Landlord Friendly
- You can quite often find several deals that beat the general 1% rule and sometimes even 2% or better.
- Cash on cash returns are healthy.
- While Mississippi has EXTREMELY modest appreciation, it also doesn't have huge market swings. Typically. This stability is great for 'boring' investments. Not so hot for investors looking for 'excitement'.
- Taxes are relatively low - take THAT California lol
- Gulfport, MS is literally the PORT of the GULF. This, among other factors make the Gulf Coast region a fairly vibrant economy.
- The Mississippi Gulf Coast is also one of the only areas of the state that has tourism as a significant piece of it's economy.
- The Mississippi Gulf Coast has an international airport
- The Mississippi Gulf Coast has a beach
- Houses are some of the cheapest in the country.
I'm currently selling this flip for less than $200k - in any other market, it would be sold for any multiple of it's current listing price.
As you can see, this home is on the moderately higher end of the spectrum. Not a million dollar house or anything, but I'm definitely looking to make it a retail deal and not something to buy and hold.
This home is being sold in the 180s and there are several other properties being sold from $65k to $140 that aren't in completely war-torn areas that make for great buy and holds. While you do have to be careful about what areas you purchase in, many of these properties would make for great investments and would make for lovely homes to potential tenants. I'm sure there are investors from Mississippi who can even beat THOSE numbers.
This is just an example (and I'm kind of excited about finally wrapping up this particular rehab) but I have out-of-state buyers who regularly ask me why a house in Mississippi is so cheap, is it livable, and if it's less than a quarter million dollars is it in a war zone.
I'm saying all of this to say: the Mississippi Gulf Coast is a great place to invest if you're looking for a stable investment that isn't extremely expensive - as far as real estate goes. I love real estate on the Mississippi Gulf Coast.
I won't try to make the case for making it your primary residence right now lol
@Christian Brown I know that house! I remember seeing before anyone had done any work to it. I’ve lived in 4 houses in that neighborhood.
@Christian Brown I forgot to ad in that you did a phenomenal job flipping it!
You missed one drawback, Katrina.
@Susan Maneck not everywhere flooded in Katrina. The house that he is showing didn’t. You just have to do your due diligence and make sure of your property’s elevation.
Not everywhere was flooded and not every home is in a flood zone.
I actually tell my buyers to avoid flood zones as flood insurance eats profit in deals.
If anything, the Mississippi Coast has aggressively grown to rebound from Katrina.
A lot of the homes that were destroyed were not in identified flood zones.
My personal residence has been here for several generations.
But I get it lol you’re from Jackson. Jackson is cool too.
I was stationed in Gulfport in the early 80's, we lived in a little worse looking places than that :) Nice remodel.
@Kevin thanks! I completely forgot to mention the Air Force Base!
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Originally posted by @Christian Brown:
My personal residence has been here for several generations.
But I get it lol you’re from Jackson. Jackson is cool too.
Not sure how cool Jackson is LOL
but I was there in Biloxi about 10 days after Katrina I was looking at a 250 unit apartment. tide water came in during the event and water was 6 feet up the walls. it was a major disaster.
but from what I saw the good thing was the casino's were allowed to move from being on barges to land and the area exploded.
great job on the rental. cabinets look really nice at that price point. but keep in mind plenty of that price point all through the deep south and mid west. for same quality.
@Christian Brown
I’ve been to Mississippi once, didn’t really like it too much. But you make it sound like I should revisit the state and go to the gulf. Your market sounds like my market, affordable housing, modest returns, some appreciation, my region’s taxes are high though. Cool perspective hope it works out for you.
Originally posted by @Christian Brown:
My personal residence has been here for several generations.
But I get it lol you’re from Jackson. Jackson is cool too.
Actually my neighborhood in Jackson got hit pretty hard during Katrina as well. Lots of cars and houses destroyed by falling trees. But immediately afterwards property values rose tremendously, because New Orleans doesn't fit in Jackson. They fell again after during the recession, unfortunately.
I guess my point is we need to take things like global warming seriously when we purchase real estate.
@Christian Brown, I was on the Navy base.
Something that just crossed my mind, does anyone know if BAH rates drive rental prices for areas with military installations? For instance, it looks like an E4 with dependents gets $1128/month for off base housing in Gulfport. Does that drive rental prices?
@Jay Hinrichs very true! I was looking into Cleveland, Indiana and Missouri for a while. Numbers look pretty similar, but the coastal economy was one of my deciding factors for staying in my backyard.
@Nick Rutkowski well, I’ll gladly make the case that Mississippi is one of the best markets to invest in.
I won’t build my platform around living here lol. The good thing about real estate investing is that you don’t have to live in your investments if you don’t want to.
@Kevin Prigge aaaaaaaaand the Navy Base lol I’m not sure what the exact effects are to the market, but I know several investors who prefer military tenants and would most likely go out of their way to service them if they could.
Definitely has some impact. Just not sure how to quantify that.
@Kevin Prigge Base housing rate does indeed drive rental prices to some degree. It just depends on the area of town. The area directly adjacent to the Seabee base is more of a C class area so those rents reflect that. Over here in Biloxi near the Keesler Air Force Base I know a few investors getting nearly $1200/month for a 1 bedroom condo/apt.
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Originally posted by @Susan Maneck:
Originally posted by @Christian Brown:My personal residence has been here for several generations.
But I get it lol you’re from Jackson. Jackson is cool too.
Actually my neighborhood in Jackson got hit pretty hard during Katrina as well. Lots of cars and houses destroyed by falling trees. But immediately afterwards property values rose tremendously, because New Orleans doesn't fit in Jackson. They fell again after during the recession, unfortunately.
the flood of people from new Orleans post Jackson was NOT good .. not good at all. prior to that you could retail houses in south Jackson normal fix flip sell to first time home buyer.. we would get 80 to 100k for them .. then you had massive movement of section 8 renters out of the storm transferred the entire social scene there and it became renter dominated and you could no longer do fix and flip retail .. very sad situation actually.
Houses in my neighborhood in SoJo were going for 130K after Katrina. It wasn't until the recession hit and people lost those homes that it became renter dominated.
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Originally posted by @Susan Maneck:
Houses in my neighborhood in SoJo were going for 130K after Katrina. It wasn't until the recession hit and people lost those homes that it became renter dominated.
There are a few nice pockets of So jac but average so jack never got that high.. I think i have funded no less than 500 deals in that area..
now NE jackson sure 120 to 150 is the norm and sales to homeowner yet today.. So jac basically is what it is .. prices are what a landlord will pay for a given rent.. and that tends to be about 1 % to 1.5 % and of course locals who scout it out and do their own rehab do much better.
Originally posted by @Jay Hinrichs:
Originally posted by @Susan Maneck:Houses in my neighborhood in SoJo were going for 130K after Katrina. It wasn't until the recession hit and people lost those homes that it became renter dominated.
There are a few nice pockets of So jac but average so jack never got that high.. I think i have funded no less than 500 deals in that area..
I think your houses were mostly in the 39204 area which is much rougher. My neighborhood is south of Mcdowell.
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Originally posted by @Susan Maneck:
Originally posted by @Jay Hinrichs:Originally posted by @Susan Maneck:
Houses in my neighborhood in SoJo were going for 130K after Katrina. It wasn't until the recession hit and people lost those homes that it became renter dominated.
There are a few nice pockets of So jac but average so jack never got that high.. I think i have funded no less than 500 deals in that area..
I think your houses were mostly in the 39204 area which is much rougher. My neighborhood is south of Mcdowell.
I funded in all those areas.. many off of cooper rd which is south of Mcdowell as you know it can be street to street there. but generally if they are nice brick homes those stood up the little wood clap board and perimeter foundations can take a beating.. but anyway.. I get it.