Thoughts on Louisville Market for Investors?

Louisville, Kentucky
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Thoughts on Louisville Market for Investors?

Abtahee Ali
Member since 2023 · 11 posts · 10 votes

Hi! I am a new investor and I am looking to purchase my first property. I am looking into Louisville since I will be moving there. I have been researching the Louisville housing market and have found mixed reviews. I am wondering what are your thoughts on the Louisville market. Thank you in advance! 

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Rob Bergeron
Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
2y

I generally am a believer in forcing appreciation to insulate yourself from risk and future overhead. Our market has tons of opportunities and great people to help you get there. I believe our market is undervalued by 20%-30% relative to our peer cities. Take educated action! Happy to plug you in to my infrastructure. 

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  • Chuck B.
    Investor · Louisville, KY · Member since 2011 · 279 posts · 248 votes
    2y

    I’m a long time Louisville landlord. The biggest mistake I see today is out of state investors trying to force $2000+ rents on what should be a $1400 (3br) neighborhood. Maybe the house cost too much, or they put too much into the renovation, or both… so they feel compelled to hit their target return on what should have been a more modest house/base to begin with. You can get 2000-3000 rents in lots of places in Louisville, but not in ALL the neighborhoods. There’s a huge need in Louisville for affordable housing if you can provide a quality (3br) product for $1200-$1400 per month. You have to buy it right and not go crazy on the renovation budget. The other mistake is that they have no criteria for good tenants, so they rent to people that will cause nothing but problems in the future. The FICO score is the best indicator you’ll have of how much someone has their act together. 

    4Reply
  • Rob Bergeron
    Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    2y

    I generally am a believer in forcing appreciation to insulate yourself from risk and future overhead. Our market has tons of opportunities and great people to help you get there. I believe our market is undervalued by 20%-30% relative to our peer cities. Take educated action! Happy to plug you in to my infrastructure. 

    6Reply
  • Abtahee Ali
    OP
    Member since 2023 · 11 posts · 10 votes
    2y
    Quote from @Rob Bergeron:

    I generally am a believer in forcing appreciation to insulate yourself from risk and future overhead. Our market has tons of opportunities and great people to help you get there. I believe our market is undervalued by 20%-30% relative to our peer cities. Take educated action! Happy to plug you in to my infrastructure. 


     Hi! Thank you for your feedback. I have been looking at a few Multi-family homes to purchase. I am looking for more cash flow than a major appreciation investment. Louisville prices are appealing compared to my current market. I am still doing my due diligence but it is great to get input from investors who are invested in the Louisville market.

    Are you located in Louisville? I will be moving there in January. If you are available for coffee to further discuss Louisville real estate, let me know! Thank you for your help!

    1Reply
  • Abtahee Ali
    OP
    Member since 2023 · 11 posts · 10 votes
    2y
    Quote from @Chuck B.:

    I’m a long time Louisville landlord. The biggest mistake I see today is out of state investors trying to force $2000+ rents on what should be a $1400 (3br) neighborhood. Maybe the house cost too much, or they put too much into the renovation, or both… so they feel compelled to hit their target return on what should have been a more modest house/base to begin with. You can get 2000-3000 rents in lots of places in Louisville, but not in ALL the neighborhoods. There’s a huge need in Louisville for affordable housing if you can provide a quality (3br) product for $1200-$1400 per month. You have to buy it right and not go crazy on the renovation budget. The other mistake is that they have no criteria for good tenants, so they rent to people that will cause nothing but problems in the future. The FICO score is the best indicator you’ll have of how much someone has their act together. 


     Thank you for your input! I have seen on Zillow that a lot of places that have been listed for rent for more than 60+ days are high in price compared to others. Are you primarily renting out single-family homes or are invested in multi-family homes? As this would be my first investment, I have been focused on multi-family homes but am open to single-family homes as well. If you are available, I would appreciate grabbing coffee to speak further about the Louisville investor market. Again, thank you! 

    0Reply
  • Abtahee Ali
    OP
    Member since 2023 · 11 posts · 10 votes
    2y
    Quote from @Account Closed:
    Quote from @Abtahee Ali:

    Hi! I am a new investor and I am looking to purchase my first property. I am looking into Louisville since I will be moving there. I have been researching the Louisville housing market and have found mixed reviews. I am wondering what are your thoughts on the Louisville market. Thank you in advance! 

    In Louisville I would do the (BOMSTSLO) Method.
    "Buy Off Market", using "Subject To" selling on "Lease Option" (BOMSTSLO) format.
    https://www.biggerpockets.com/forums/311/topics/1161290-spre...
    The cash flow is great and you get the "down payment" up front. And it doesn't take up a lot of your time. No property manager needed and you can offset your income with tax deductions. 

     Thank you for your help! I will be looking further into this method and the forum you have linked as well.

    1Reply
  • Rob Bergeron
    Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    2y
    Quote from @Abtahee Ali:
    Quote from @Rob Bergeron:

    I generally am a believer in forcing appreciation to insulate yourself from risk and future overhead. Our market has tons of opportunities and great people to help you get there. I believe our market is undervalued by 20%-30% relative to our peer cities. Take educated action! Happy to plug you in to my infrastructure. 


     Hi! Thank you for your feedback. I have been looking at a few Multi-family homes to purchase. I am looking for more cash flow than a major appreciation investment. Louisville prices are appealing compared to my current market. I am still doing my due diligence but it is great to get input from investors who are invested in the Louisville market.

    Are you located in Louisville? I will be moving there in January. If you are available for coffee to further discuss Louisville real estate, let me know! Thank you for your help!


    Happy to! Definitely join KREIA (our local REIA). C-D areas will cashflow the most. You should get some appreciation anywhere here. Let me know when you're in town! We can hit up Surnegos.

    1Reply
  • Donato Callahan
    Member since 2023 · 30 posts · 19 votes
    2y

    Personally, I'm impressed with the local rent growth here - especially for 3-Bedroom rentals. Rents have grown almost 20% in the past few years with the highest rents in the northeast side of the city. I'd be looking for deals over there. 

    0Reply
  • Shaan Puri
    Member since 2023 · 27 posts · 15 votes
    2y

    In the same boat as you @Abtahee Ali, I have started to look into neighborhood and targeting cash flow. Would you be open to connecting and exchanging notes?

    @Chuck - For LTRs, which neighborhood(s) have you had good experience? 

    0Reply
  • Chuck B.
    Investor · Louisville, KY · Member since 2011 · 279 posts · 248 votes
    2y

    @Shaan Puri - East Russell (not west), east or central Smoketown but not west, east side of Shelby Park, Camp Taylor, Shawnee and east Portland (not West). Some of these neighborhoods are big and vary by area, or have really negative things happening on one side of them, so you can't (or probably shouldn't) consider the entire neighborhood when looking around. 

    While I don't have any rentals there, I look at Chickasaw regularly. There are some nice areas there that would be great too.  

    1Reply
  • Shaan Puri
    Member since 2023 · 27 posts · 15 votes
    2y

    Thanks @Chuck B.!

    0Reply
  • Rob Bergeron
    Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    2y

    Here is the current rents for section 8 if that helps anyone analyze deals! New Section 8 Rental Numbers 

    3Reply
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