All Forum Posts by: Austin Wolff

As someone who lived in Los Angeles and also needed to invest out of state, I've dedicated my career to market analysis and selection, and I personally think you've chosen pretty good markets. I'm currently biased towards Indianapolis based on its job growth and affordability, but you could honestly find deals in any of the markets you mentioned (and if your heart is set on the Atlanta metro area, I'd strongly suggest the towns Union City and Fairburn based on their growth, appreciation, and price -- I almost closed on a good BRRRR deal in Fairburn but the rehab was just out of my budget).

My suggestion is to start looking for on-market deals immediately to get a better feel for the price points and rents for each market. Then, narrow down from there and reach out to an investor-friendly agent you can find on the BP agent finder.

I think those are all good picks. Just note that Kansas City has a higher population growth rate than St. Louis if you're considering MO. 

Also, I'd consider looking at on-market deals in these cities immediately to see which markets will work best for you in real-time. 

When I was considering buying in Indianapolis vs Fayetteville, I couldn't decide between the two so I looked for deals in both. Once something caught my eye, that's when I picked up the phone to learn more about the market and neighborhood.

The markets you mentioned are all good for cash flow and appreciation-potential. Start looking now; don't get caught in analysis paralysis.

 It was made about 2 months ago.

 Where in CA? I'm considering stating a meetup in Los Angeles specifically for Out-of-State investing.

I lived in Los Angeles, so I get your pain. After literally years of looking (since 2022) I bought my first property a few months ago, so I feel extremely qualified to give advice (many people earned lots of equity during the pandemic appreciation-boom if they bought before 2022, but out-of-state investors getting started AFTER the 2022 interest rate hikes are few and far between). 

Owning REITs is a good way to start. And everyone here has offered great advice. Now this might be controversial and some people may disagree with me (even some of my coworkers here at BiggerPockets may have a different opinion which I completely welcome), but I really don't think you should invest OOS in this current macro environment with less than $100k (down payment + reserves). If you don't have $100k to invest, you'll spin your wheels for a long time, looking for deals in not-so-great markets. (Ask me how I know this.)

You'll be priced out of virtually any quality market as you'll need to put anywhere from 25-40% down if you'd like to cash flow in a deal you don't have to significantly rehab (or found off-market) with interest rates where they're at (and don't expect them to go down to 4% anytime this decade either--a 3-4% interest rate is historically low and investors in the 2010s were lucky and spoiled). 

If you're investing out-of-state, you're really going to want the buying power and reserve cushion that 100K gives you. If you don't have that, keep earning, saving, and managing the risk you take by investing in REITs (which is small but risk still exists).

If you already have at least $100k to invest, and you're wondering where to start as an OOS investor, I recommend this dataset that we at BiggerPockets put together specifically for people like you and me.

https://www.biggerpockets.com/resources/housing-market-data/...

It contains information like job growth, population growth, and rent-price ratio for all markets to compare and contrast. It's certainly enough data to point you in the right direction.

Otherwise, here's an article I published on the fastest growing economies in the nation, and many of these places are quite affordable and good places to start (Cincinnati, Columbus, Oklahoma City, etc).

13 Real Estate Hot Spots You Won’t Want to Miss Next Year

I hope my perspective helped.

During my day job of Market Analysis here at BiggerPockets, Boise, ID consistently comes up as one of the best markets for real estate investors. Its growth rate is intimidating, and my personal interpretation of the data is that the market is actually still undervalued. 

Thank you for posting this. Even I was unaware about this new zoning law. This opens up so much more opportunity than I previously thought possible. Every out-of-state investor should be paying attention to this.

 Holy smokes, I just checked out your website with the neighborhood ratings. Every out-of-state investor looking into Detroit should take a look at your website!!

Hi Mike, I'm the Market Intelligence Analyst here at BiggerPockets, and as someone who just moved across the country for my own house-hack, I feel qualified to answer this.  

First, I wrote an article regarding this specific question, take a look if you're curious:

The 10 Best Markets for Your First House Hack

Second, if you'd rather do your own research, we created a simple "Where to Start" dataset that includes data such as population, price, and rent growth. You can find that here: https://www.biggerpockets.com/resources/market-data/where-to...

Third, my biggest mistake was not talking to enough property managers to fully understand the rental market. For example, in Los Angeles (where I'm from), rentals are always in high demand. However, in Fayetteville, AR (where I moved), the "leasing season" is in the summer. Demand for rentals is near non-existent in this specific town during the winter, and demand is extremely hot in the summer months. Because most units are rented in the summer anyway, the "median rent" here is basically just a reflection of the rents you can get in the summer, not in the winter (big oops on my part). This is something that even I didn't pick up in my data analysis, and I'm supposed to be the "market analysis guy." Some things you just learn by picking up the phone and talking to boots-on-the-ground.

Long story short, there are many markets that could work (you've alluded to some in your post, and almost every market already mentioned in this thread is a solid pick). But because you're house-hacking, I'd also account for "quality of life" if I were you. Some things matter more than saving an extra $200/month because you chose to live in a market you didn't necessarily like.

Quote from @Joe Hammel:

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)

I personally make well over $100k/yr cash flow from 21 properties here. All of which, I’ve purchased within the last 4 years.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s arguably the best market to invest.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: .9%-1.4% rule deals

Coc ROI: 5-12%

Total ROI: 20-40%

Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

Here is a picture of my portfolio if you/anyone is curious.

 Wow Joe, this is absolutely incredible, thank you for sharing. For your Taylor property on Cornell (purchased 2023), the loan is higher than the purchase price (I'm assuming to help cover the rehab). What kind of loan did you use? Would you consider that town a "B" place or a "C" place?

 Wonderful, thanks for the feedback!