All Forum Posts by: Andres Murillo

Quote from @Johnnie Schneider:

Hey there, my partner and I are looking to get our first rental property together in 2023. Just wanted to come on here and see what everyones favorite or best cash flow market is currently or moving into this new year. Our budget were looking to stay under is about 120k. Thanks !

Birmingham, AL - low cost of entry, strong renter base, cookie-cutter product that can be easily duplicated, brick-built homes in A-C grade neighborhoods, decent growth, great cash flow. 

The matrix below is something I review with clients looking to explore new markets. The idea of the Matrix I "why are investors choosing these markets" not "what's the end all be all truth". This is also based on my experience working with investors in these specific markets for the past 5+ years. You can get more context and input from the community in the post below. 

https://www.biggerpockets.com/...

Quote from @Derek Fike:

Hey Everyone,

I currently live in Colorado and am looking to purchase real estate to eventually turn into a rental. What are your thoughts on good markets to be targeting (towns, cities, states, etc.). If you were looking to put little cash down and still generate CoC return, where would you be looking?

Thanks everyone!

 Hey Derek! Here's a piece of content I made in order to help have conversations with investors. 

You can get additional context and people's feedback on the forum post below.

https://www.biggerpockets.com/...

Quote from @Frank Barletta:

Andres -- There is a strong spirit for sharing information, but avoiding saturation is the currency of STRs. 

Do your research and make decisions based on that.

Not sure what you mean here. This is general real estate trends, not specific STR market selection.

This is a starting point for most investors, not the end of the market conversation. Saturation, competition, regulations, ToTs, and a laundry list of other factors go in to the buying decision for STRs. 

This helps new investors “do their research”. 

Quote from @Bill B.:

How does it factor in weather (tornados, earthquakes, hurricanes, blizzards), state income tax (compared to zero in SD, FL, TX, NV, TN, WY), landlord vs tenant tilt, population growth and migration from NE, Midwest and parts of CA to FL,TX,AZ,NV.

You want to skate to where the puck is going, not where it was. 

But, I do appreciate the work you’re putting in to it. And I’m happy to see people are starting to appreciate appreciation and understand cashflow isn’t the end all be all. 

It doesn’t lol. It takes into account the rationale investors have when investing in a particular market in terms of growth vs cash flow, low cost vs established market. Based purely on my experience working with investors. 

There are A LOT of other factors behind a buy decision. 

All of the factors you described should get their own matrix. You can compare income taxes from low to high on one axis and natural hazard risk on another axis. That would be super helpful to review. 

Quote from @Jaron Walling:

The Bay Area and So Cal is high growth? Where does the mid west fit in?

I just climbed out from under a rock. 

That's why an investor would buy in the Bay or SoCal. There really isn't a drop of cash flow out there and historically those are the markets with the best population and value trends. IF an investor is buying in those areas it's almost exclusively because of growth potential. Short-term rentals provide some cash flow in these areas but are also subject to more restrictions than in other areas.

These are 16 markets I've transacted in - I have also helped in Chicago and Indy but forgot to add them here. They would definitely fit in the "affordable/cash flow" quadrant. Probably similar to the Huntsville area.

There are a ton of markets I haven't transacted in that could be plotted.

Analyzing the income potential of a specific home is much more an art than a science. AirDNA is a great start but you have to dig into many other factors as well. 

You'll notice some homes in the same neighborhood vary wildly in their income results. Why is that happening? What property characteristics correlate to higher income in this area? Can you duplicate those characteristics? How much of a difference does the host rating make? Are there 3rd party booking sites I'm not considering? 

There's a lot that goes into forecasting income for STRs. AirDNA is a great start. 

I review this doc with nearly every new client I work with. I thought I'd get some feedback from the BP community.

What's plotted here is "why are investors choosing this market". For example, investors are choosing Sacramento over Charlotte because the market is "more established and expects higher growth", however, investors are choosing Huntsville over Atlanta because "properties cost less and cash flow better". Hope this explanation makes sense. 

New Investors: Does this help to understand how to compare your market choices?

Experienced Investors: Do you agree? (lol. I know this will cause some uproar) What feedback do you have?

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. 

Nothing wrong with that at all! In fact, you HAVE to overbook yourself because the show rate for those appointments can be pretty low.

I typically make a few times when I'm free available to tenants to choose from, but push everyone to the same times.