All Forum Posts by: Graham Lutz

@Graham Lutz my 2c- you'll probably find a good property manager before you learn to become a good property manager. Use referrals, that's what BP is for! Set up process for sure- I was literally a scientist by trade, so we have that in common! Don't overbuild procedure so early, but build it in parallel with the growth of your portfolio and put your process-oriented nature to use!

Just go find a fourplex somewhere for 100k that rents for 2500 bucks to C tenants, make sure the mechanicals work, and buy that sucker! Then go buy another 60 days later. Then 10 more. BP provides great information, but it's very easy to slip into the category of "thinkers" rather than "doers" if you delve into every forum post about virtual investing here. 

I'm on a mission on BP to bring analysis and systematic thinking to real estate investment.  The successful people on this site really get it, but there are so many people chasing what's hot, trying to make an easy killing.  The irony is that real estate is not hard, but it requires discipline and execution, as any investment strategy does.

@Graham Lutz  pretty much any topic that is   Hey were is the best cash flow or what market is best.

you get those who live there touting their area.. and I get that.. we are all proud of our area.

my point is there are just so many great areas right now. that the one closest to home is usually the best to work in.. why go 5 states away for a 1% difference in cash flow LOL..

No reason to leave were you live GA is on the up swing especially ATL... grass is not greener.

but most of the post will be those that live in a certain area touting their areas..

I work in many areas let me give you a list of what I learned in the last 3 or 4 years.

Markets I think merit consideration

1. Charleston SC  not that its number one on my list just came to mind first.  but we have done quite well there and I live in Oregon LOL.

   but this is for new construction.. not sure about buy and hold.. rough areas in the past turning around is what we see there in Charleston its quite the thing really.

2. I really like what I saw happening in the urban core of Philly.. BRRRR strategy is alive and well there price points for what it is could see some pretty nice upward movement and its self evident the re gentrification of what were hoody or war zone areas.. that's were money is made..

3. Certain pockets of Indy have some really nice revitalization going on.. Now keep in mind my personal thought process is future value / balanced with cash flow that will debt service .. money Is made when the value sky rocket.

4. Vegas.. I really like what I see In Vegas as well its rebounding.. and with SALT I think the over flow from CA and OR will be real.. I know I just bought a home there to transfer my state of residency for tax purposes only have to be there in the winter..

5. I think KC is a nice town with some really solid blue collar stuff.

6. I was impressed with again the suburbs of Cleveland but need to be careful on tax's there.

However I am back in ATL starting in March  there is plenty of money to be made in that huge metro area.. so not sure you need to go anywhere frankly.  but I just point those out for discussion and areas I personally work in currently..

Where I from Oregon  now half time.. its uber hot for construction and if your ok with 5 caps its one of the most solid MFH markets in the country as well.  next to zero vacancy.. NO section 8 and extremely solid rental tenants ..

@Graham Lutz I'd approach things differently from looking at where a factory is opening or what markets are hot.

I'd start with the list of Metropolitan Statistical Areas on wikipedia, which you can sort by growth rate:  https://en.wikipedia.org/wiki/List_of_metropolitan...

Even though there are growth rate variations within MSAs (i.e., declining areas within growing MSAs and vice-versa), to make things simple, I would avoid any MSA that is declining in population, period.  I'd be skeptical about MSAs growing slower than the US average, but wouldn't write them off completely if they are nearby to you and have something attractive about them, like state capitols or mega universities - these never go anywhere.

I'd then start getting a bit granular on the MSAs, trying to identify the areas within them that are growing or not growing.  You can get more granular, down to the city or zip code level on Hometown Locator https://www.hometownlocator.com, which uses Census Bureau stats.

Once you identify areas with strong growth within growing MSAs, look for anchors like government or big universities that are never going anywhere and are immune to fluctuations in the economy.

You should also look for the strongest school districts.  Demand is always high in these areas, and good schools always attract the best tenants - the tenants who are going to come up with the rent no matter what because they are determined to keep their kids in the good schools.

Once you've identified the areas of growth within the growing MSAs with the best schools, preferably near some major anchor, start looking for deals.

@Graham Lutz I'm partial to Pittsburgh as well (live here and saw this pop up on Pittsburgh alerts from Jeremy's post).

TLDNR: RE investing works wherever as long as you pick the strategy that works there.  

I think the market to be in depends entirely on what you are looking for. If you are looking for cash flow then Pittsburgh is a great place to be because the gross rent multiplier is pretty low. If you want to make money in rentals I think looking for places where that number can be kept reasonably low is a good place to start looking. 

As far as appreciation is concerned historically you get pretty steady rates in Pittsburgh, but they aren't large rates by any stretch of the imagination. So if you are looking for the place that home value increases rapidly you might look at other cities (that being said the home value might also decline just as rapidly as it goes up). 

Also, depends if you are looking to flip, wholesale, value-add, etc. You'd want to look for markets where there are still a decent number of distressed homes in areas with otherwise good value. 

Lastly, I still think that at the beginning working in your own market can be weighed pretty heavily. It just makes some things easier until you have systems in place. On the other hand investing OOS or just far away from where you live forces you to build systems so that you can be completely hands off. 

All depends on what you want and there are lots of factors. 

Sorry for the book. 

I like Pittsburgh because it is a great cash flow market with upside for some continued appreciation growth in the future. It has been redefining itself from a steel town to a medical/tech hub the past 5 or so years.  It has also historically held steady during market crashes, unlike a lot of other markets.