Best Market for First Investment Property
Most Popular Reply
Joe HammelBusiness Member
Real Estate Agent · Metro Detroit, MI · Member since 2018 · 612 posts · 666 votes@Cindy Ni
You just can’t beat metro Detroit in my opinion. My personal portfolio here is made up of 19 doors cash flowing $90k+ a year (after all expenses and putting aside $200+ a door each month for vac, cap, maint)
I purchased from 2020-2022 almost entirely off the MLS.
Notice I said Metro Detroit and not just Detroit. These aren’t $15,000 houses. These are $100k houses that rent for $1300 a door and they just work. Light sweat equity. Great deals for a first time investor to buy, see how it goes, learn a lot, gain some confidence and then you can either change your strategy or buy more. What we end up seeing the most is they come back and want to buy another property that is as close to the first as possible.
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34 Replies
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Look no further than your back yard. If I were to land in your city tomorrow I could close on 30 properties this year. Stop looking for the easiest markets.
- Investor · Huntsville, AL · Member since 2015 · 149 posts · 80 votes3y
Quote from @Cindy Ni:
Hi All - I am looking to buy my first investment property and I have been researching markets. I am currently in between Charleston, SC and Huntsville, AL. My goal is mostly around cashflow (with high mortgage rates, even a modest amount is good) in an area with a good amount of appreciation as well. I know it depends more on the neighborhood I choose in the area, but would love to know from the more experienced crowd here which market has a higher probability of meeting my goal.
Also, I am based out of Jersey City and would have preferred to buy a property closer to me, but the properties in this area are way out of my budget and do not seem to cashflow at all. I am a bit nervous about buying a property so far away, so would love to hear if anyone has advice on this. Thank you!
Hey Cindy,
I live in NY and invest in Huntsville. I have been very happy doing so. I'm happy to discuss with you if you're interested!
- Real Estate Broker · Raleigh · Member since 2023 · 7 posts · 2 votes3y
Raleigh and surrounding areas are AMAZING! Can def sent you some numbers and properties and discuss futher if you have questions. We are growing fast but many great opportunites.
- Member since 2019 · 25 posts · 9 votes3y
Quote from @Chris Mignone:
Quote from @Cindy Ni:
Hi All - I am looking to buy my first investment property and I have been researching markets. I am currently in between Charleston, SC and Huntsville, AL. My goal is mostly around cashflow (with high mortgage rates, even a modest amount is good) in an area with a good amount of appreciation as well. I know it depends more on the neighborhood I choose in the area, but would love to know from the more experienced crowd here which market has a higher probability of meeting my goal.
Also, I am based out of Jersey City and would have preferred to buy a property closer to me, but the properties in this area are way out of my budget and do not seem to cashflow at all. I am a bit nervous about buying a property so far away, so would love to hear if anyone has advice on this. Thank you!
Hey Cindy,
I live in NY and invest in Huntsville. I have been very happy doing so. I'm happy to discuss with you if you're interested!
Could you shoot me a message? I live in East islip
- 3yCindy NiNew to Real Estate · Jersey City, NJ · Member since 2021 · 6 posts · 4 votesOP
@Chris Mignone yes! I just sent you a connection request!
- Investor · Huntsville, AL · Member since 2015 · 149 posts · 80 votes3y
Quote from @Cindy Ni:
@Chris Mignone yes! I just sent you a connection request!
I messaged you back yesterday
- Realtor · Member since 2023 · 177 posts · 41 votes3y
Welcome to BP, Cindy! Have you ever considered Southwest Florida? You can shoot me a message.
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes3y
Quote from @Cindy Ni:
Hi All - I am looking to buy my first investment property and I have been researching markets. I am currently in between Charleston, SC and Huntsville, AL. My goal is mostly around cashflow (with high mortgage rates, even a modest amount is good) in an area with a good amount of appreciation as well. I know it depends more on the neighborhood I choose in the area, but would love to know from the more experienced crowd here which market has a higher probability of meeting my goal.
Also, I am based out of Jersey City and would have preferred to buy a property closer to me, but the properties in this area are way out of my budget and do not seem to cashflow at all. I am a bit nervous about buying a property so far away, so would love to hear if anyone has advice on this. Thank you!
There are deals in every market. However, if you do not have a team in place, then you cannot do anything anywhere So run the numbers, Midwest are the best for rentals, then connect with those doing deals. They will already be set up . However if you are not cash it will be very difficult to get a great double-digit net cap
Good luck
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes3y
Quote from @Kevin Bartlett:
Welcome to BP, Cindy! Have you ever considered Southwest Florida? You can shoot me a message.
Where are you getting great deals there? I am very familiar from Ft Myers - Tamps, there is nothing that I would even get out of bed for. I now live on the East Coast, Jensen beach, there is nothing here as well.
- Real Estate Agent · Los Angeles, CA · Member since 2022 · 137 posts · 106 votes3y
Hey Cindy! I've been an REI Conusltant for over 5 years and have helped investors purchase in over a dozen markets.
Huntsville and Birmingham are two fantastic markets in AL. These are each "low cost, higher cash flow" markets. Do they have the BEST growth prospects? Not really, especially when compared to NC, GA, or TX markets. But these are markets with investor-friendly laws, low barriers to entry, repeatable inventory, and solid cash flow.
Let me know if you have any questions or want to discuss these areas.
- Realtor · Member since 2023 · 177 posts · 41 votes3y
Quote from @Bob S.:
Quote from @Kevin Bartlett:
Welcome to BP, Cindy! Have you ever considered Southwest Florida? You can shoot me a message.
Where are you getting great deals there? I am very familiar from Ft Myers - Tamps, there is nothing that I would even get out of bed for. I now live on the East Coast, Jensen beach, there is nothing here as well.
Have you thought about Cape Coral? With Irma a lot of deals are happening
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes3y
Quote from @Kevin Bartlett:
Quote from @Bob S.:
Quote from @Kevin Bartlett:
Welcome to BP, Cindy! Have you ever considered Southwest Florida? You can shoot me a message.
Where are you getting great deals there? I am very familiar from Ft Myers - Tamps, there is nothing that I would even get out of bed for. I now live on the East Coast, Jensen beach, there is nothing here as well.
Have you thought about Cape Coral? With Irma a lot of deals are happening
I know it very well, (i had more then 75 there back in 05- 09 got killed) ) my client owns about 20 mill there, No no deals. Even if you find one the insurance is a killer. Now keep in mind all my rentals are 15- 25% net caps, based on cash purchase. So if you happy with 3, 5% then it might work, I would not touch it . The cape is going to fall hard. I know lenders pulling out of there. I was going to start building new with my client. After some homework we said no thanks.
All the best
- Investor · Huntsville, AL · Member since 2015 · 149 posts · 80 votes3y
Quote from @Cindy Ni:
Hi All - I am looking to buy my first investment property and I have been researching markets. I am currently in between Charleston, SC and Huntsville, AL. My goal is mostly around cashflow (with high mortgage rates, even a modest amount is good) in an area with a good amount of appreciation as well. I know it depends more on the neighborhood I choose in the area, but would love to know from the more experienced crowd here which market has a higher probability of meeting my goal.
Also, I am based out of Jersey City and would have preferred to buy a property closer to me, but the properties in this area are way out of my budget and do not seem to cashflow at all. I am a bit nervous about buying a property so far away, so would love to hear if anyone has advice on this. Thank you!
Hey Cindy,
@Gorden Lopes can help you with the out of state investors group I was telling you about yesterday!
- Member since 2023 · 6 posts · 4 votes3y
Quote from @Chris Mignone:
Quote from @Cindy Ni:
Hi All - I am looking to buy my first investment property and I have been researching markets. I am currently in between Charleston, SC and Huntsville, AL. My goal is mostly around cashflow (with high mortgage rates, even a modest amount is good) in an area with a good amount of appreciation as well. I know it depends more on the neighborhood I choose in the area, but would love to know from the more experienced crowd here which market has a higher probability of meeting my goal.
Also, I am based out of Jersey City and would have preferred to buy a property closer to me, but the properties in this area are way out of my budget and do not seem to cashflow at all. I am a bit nervous about buying a property so far away, so would love to hear if anyone has advice on this. Thank you!
Hey Cindy,
I live in NY and invest in Huntsville. I have been very happy doing so. I'm happy to discuss with you if you're interested!
Hey there Chris. I too would like to bounce some ideas off you. I am located in Michigan but plan on moving to Alabama in the next few years. I would like to possibly lock up a few deals before I move down. Thanks.
- Bay area, CA · Member since 2021 · 383 posts · 306 votes3y
The USA is a huge county and opportunities are endless. I tell people, don't worry about area or market, worry about having trustworthy people with you experienced in the subject. Where do you have that? Invest there.
- 3yGreg ParkerBusiness MemberRealtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 663 posts · 536 votes
@Michael James Hamlin let me know if you need any info on Montgomery, Alabama.
MGM Property Pros LLC - Real Estate Agent · Member since 2019 · 143 posts · 74 votes3y
Hi there,
It's great to hear that you're considering investing in real estate and researching different markets. Charleston, SC and Huntsville, AL are both attractive options, but ultimately the decision will depend on various factors such as the specific neighborhoods, property types, and market conditions.
In terms of cashflow, it's important to look at the potential rental income and expenses, including property taxes, insurance, maintenance, and management fees. You may also want to consider the vacancy rate and demand for rental properties in the area.
As for appreciation potential, it's important to research the local economy, job growth, and population trends. Areas with a strong and growing economy tend to have higher appreciation potential over time.
Regarding buying a property out of state, it's common to feel a bit nervous, but there are ways to mitigate the risks. It's important to do your due diligence and thoroughly research the area and specific property before making an offer. You may also want to consider working with a local real estate agent or property management company who can provide on-the-ground support and insights.
Ultimately, it's important to do your own research and due diligence before making any investment decisions. Good luck in your search for the perfect investment property!
- 3yJay ThomasPro MemberReal Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
If you're looking for a good investment opportunity in Real Estate, don't overlook your own back yard. With today's technology, there are many ways to research and find great real estate deals close to home. Even if I were to land in your city tomorrow, I could easily close on several properties this year - proving that you don't need to look far for the best Real Estate investments. So stop searching for the easiest markets, and consider your local area instead! Today could be the day you start investing in Real Estate for success. Good luck!
- Lender · Seattle, WA · Member since 2022 · 482 posts · 768 votes3y
I would consider Seattle to invest. As Seattle is the only city that allows you to build ADU (attached dwelling units) and DADU (detached accessory dwelling units) if the house of the land that you purchase has sufficient sqft. This will allow you to force appreciation of you land + create sweat equity. @Carlos Valencia @Albert Bui
- 3yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Matthew Kwan:
I would consider Seattle to invest. As Seattle is the only city that allows you to build ADU (attached dwelling units) and DADU (detached accessory dwelling units) if the house of the land that you purchase has sufficient sqft. This will allow you to force appreciation of you land + create sweat equity. @Carlos Valencia @Albert Bui
>I would consider Seattle to invest. As Seattle is the only city that allows you to build ADU (attached dwelling units) and DADU (detached accessory dwelling units) if the house of the land that you purchase has sufficient sqft.
The entire state of CA allows ADU and JADU (which must come from existing structure but you can add to structure first then convert to JADU).
However, in Southern California adding an ADU (unless you are a developer) is just about the worse RE investment option available. It has mostly to do with the value added by the ADU with respect to the cost of adding the ADU. Adding a JADU is even worse and typically subtracts value from the RE.
Here are some reasons adding a hands off (not doing the work yourself) is a poor RE investment:
1) The value added by the ADU addition is often significantly less than the cost of adding the ADU. Search the BP for ADU appraisals to encounter numerous examples. This creates a negative initial position. This negative position can consume years of cash flow to recover. Make sure you know the value the ADU will add to the property before building the ADU.
2) the financing on an ADU is typically far worse than for initial investment property acquisition or is often not leveraged (HELOC, cash out refi, etc). Leverage magnifies return.
3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR. However if I do a BRRRR I can achieve infinite return by extracting all of my investment. Due to item 1, adding an ADU can require years to start achieving any return (once the accumulated cash flow recovers the initial negative position).
4) Adding an ADU is a slow process. It can take a year or more to complete an ADU. During this time you are not generating any return from the money invested in the ADU. This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return.
5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space.
6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties. This may affect value or time required to sell.
7) Adding an ADU does not make the property a duplex. For example in many jurisdictions I can STR units in a duplex but cannot STR an ADU (some jurisdictions will let you STR if you owner occupy). Duplex have different zoning that may permit additional units. Duplex can always add additional units via the ADU laws.
8) Related to number 1, purchasing a property with an existing ADU is cheaper than buying a property and adding an ADU. Why add an ADU if it can be purchased cheaper?
good luck - Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes3y
Quote from @Matthew Kwan:
I would consider Seattle to invest. As Seattle is the only city that allows you to build ADU (attached dwelling units) and DADU (detached accessory dwelling units) if the house of the land that you purchase has sufficient sqft. This will allow you to force appreciation of you land + create sweat equity. @Carlos Valencia @Albert Bui
Not really many cities allow DADU's what makes seattle unique is it allows condominizing the DADU as a separate APN and property that can be sold separately once the HOA has been setup.
Most cities require the DADU to be title restricted and cannot be sold from the main house/struture like costa mesa, CA in orange county (presently).
- 3yDave SpoonerPro MemberRental Property Investor · Cincinnati, OH · Member since 2020 · 869 posts · 823 votes
I think starting off going with somewhere near Jersey City might be your best bet.
- 3yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:
https://www.biggerpockets.com/member-blogs/3094/99854-deep-dive-into-metro-detroit-cities-ecorse
(BP search feature can be problematic, so we’ve also added links @ our website under View Cities & Neighborhoods We Service)
Doubt you'll find this much info for any other market in the country. So, why would you invest remotely anywhere else?
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Logical Property Management4.9458 Reviews - Real Estate Broker · Detroit, MI · Member since 2017 · 103 posts · 50 votes3y
Quote from @Cindy Ni:
Hi All - I am looking to buy my first investment property and I have been researching markets. I am currently in between Charleston, SC and Huntsville, AL. My goal is mostly around cashflow (with high mortgage rates, even a modest amount is good) in an area with a good amount of appreciation as well. I know it depends more on the neighborhood I choose in the area, but would love to know from the more experienced crowd here which market has a higher probability of meeting my goal.
Also, I am based out of Jersey City and would have preferred to buy a property closer to me, but the properties in this area are way out of my budget and do not seem to cashflow at all. I am a bit nervous about buying a property so far away, so would love to hear if anyone has advice on this. Thank you!
I concur you should invest at least initally in you back yard, which is probably where you have the most intrinsic knoweledge and network.
If you have a good network of folks you trust who are doing what you want to do with same investment objectives maybe you try something in that market.
I have yet to find deals that compare to ones I've found in my backyard of Detroit
ive invested $1,000 for 2 family flat and now valued at 250k
spent $32k and bought 9 2 family flats portfolio would be valued at $3M if all were renovated
$10k and working on a $450-500k 3 family currently.
If you have deals like this in your market and need a partner contact me and I'll jump on a flight.
- Realtor · Detroit, MI · Member since 2018 · 387 posts · 129 votes3y
@Cindy Ni. I have myself personally found great deals here in Michigan.. The many Out of State investors investors that ai work with all day the Returns here are Great
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