All Forum Posts by: Nadine O.

Northeast Ohio is a good market, Cleveland, Akron and Canton are several hot areas just to name a few.

I don't have a specific location, but I'd suggest looking at cities and towns within an hour driving radius of large metropolitans (I think DC is a great one to base off). As hybrid work becomes more of the norm, more people are going to be willing to take the hour drive once or twice a week, for a reduction in living expenses (especially families who want more space !). There's opportunity to find better yields in these smaller markets, but now you have more downside protection in theory, as more individuals will be willing to expand their search radius to these smaller towns that are within a reasonable driving distance of a large metro.

The framework is clear. The bay area has, is and will likely be the best returning geo over the long term. But the barriers / cost to participate are very high. This area does not need some artificial impetus like a "pandemic" to prop its prices up. That IMHO is like a steroid shot for some geo's outside fo the area but lord knows how sustainable it is. 

Barriers to entry are high but there are always deals available and that takes a whole lot of time and effort. But I feel it is worth it. The short cut is to pick an inexpensive midwest town and buy 3 properties or 7 and tell your friends you own so many units. 

Sure that could work as well but it will come with its set of pros and cons. Appreciation will be a question mark and plus the burdens of managing properties remotely. The bay area on the other hand has always surprised me. I have listed expensive large properties thinking darn who would rent this when I am asking five figures. Then I get this barrage of calls from expats, companies moving execs, people going through home renovations, people moving from overseas etc and the home is rented in 3 weeks!! Such is the power of the bay, the demand here is very strong and solid. Again barriers to entry are steep but finding tenants and getting a nice fat rent check is very possible. 

New York City! Best place to do an FHA house hack. If you can get a 4 unit and a basement, that would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield.

I see how institutionalized product in Class B/C markets are trading at 5%-6% cap rates. Might as well deploy into something smaller (units wise) and get a +6% cap rate with attractive growth prospects in areas of the Bronx and Brooklyn. 

NYC may not be the best market from a cash flow perspective, but if you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there are still plenty of cash flow opportunities in the outer boroughs if you buy right!

Quote from @Nadine O.:

Hi BP Family! Where would you recommend living in USA to start house hacking and building a rental property business? The intent is to relocate from a high cost of living area like the Bay Area in California (although we love it here) to another, lower cost of living city where we can start by purchasing a multi-family to house hack (we are newbies, but have read a lot) and eventually build a portfolio of rental properties to retire off of. Would love to hear your thoughts - thank you!

 It is near impossible to do what you are talking about. Those midwest properties will barely throw off any cash flow when leveraged and only a few hundred dollars a month each when paid off.And you will be hit with constant issues of maintenance, cap ex, eviction, vacancy etc. The housing stock there is all from the 60s and 70s and aging rapidly. The tenant pool is not great either. Before you embark on this path talk to people who have owned this asset class over a period of time exceeding 5 or 10 years. People have made fortunes in California on just one or two properties over time. Midwest prices are the same as 30 years ago especially adjusted for inflation. I speak from experience of owning several such properties and while I made a good profit it was pure luck of timing picking the up after the crash. That still doesn't make it a great asset class, especially at todays prices.

Quote from @Nadine O.:

Quote from @Jared Prevost:

@Nadine O.

I recently moved from Grand Rapids MI and I can tell you from a macroeconomic perspective, it's an excellent market to invest in. All 10 of the largest employers are in different industries, population growth of over 1% annually for the past few years and expected to continue, lots of small multifamily inventory, and really good submarkets. If you really want to invest in a cheap city, Muskegon is 40 minutes west of Grand Rapids on Lake Michigan and you can scoop up cash-flowing deals for $50k.

I previously helped manage an Open Door Capital mobile home park in Muskegon, if Brandon Turner is willing to invest there, it's probably worth looking into.

My problem with other midwest states, such as Ohio and Indiana, is that I don't see meaningful long-term appreciation. People are moving where there is a good lifestyle. In Michigan, you have the Great Lakes and a lot of beautiful natural areas and opportunities for outdoor recreation. (Keep in mind my Michigan bias... no one from Michigan likes Ohio haha).

I think the other considerations such as taxes, tenant friendliness, cost of living, etc are priced into real estate by other investors. I really don't find this info all that relevant - not enough to keep you in analysis paralysis.

Thank you Jared - I was just discussing Grand Rapids with my neighbor a couple of weeks ago - he was recommending it as well. Good to know there are lots of small multifamily inventory and I like the idea of investing in areas within a reasonable distance to larger cities (especially now that the job market is becoming more and more remote in many industries).

Muskegon is a good choice as well.

Great job on the mobile home parks! From all the BP podcasts I have listened to, I know they are Brandon's bread and butter :)

Hey Nadine!
I cover the Grand Rapids and Muskegon markets and have helped quite a few BP investors get their start in West Michigan.  I'd be happy to run some numbers for you in this area if you'd like.  Just hit me up anytime.

Currently Grand Rapids is experiencing 15% appreciation and Muskegon is 15-25% depending on the area.   Muskegon and Muskegon Heights are focused on gentrification and are making things very friendly for rapid appreciation and its working.   Muskegon might be the best place to invest in the country right now given the rents, cash flow, appreciation and employment opportunities.    

Great question. I moved from NY to Jacksonville Fl with the intent of being in my backyard. I would consider the lifestyle (I wanted the beach and warm weather), cost of living, population growth,  and the ability to scale in the market.

You are at an exciting point in your life. Congrats and good luck!

Gino

@Nadine O.

Metro Detroit

(my rental portfolio is here)

Purchase: $80k-$130k

Rent: $1200-$1500

ROI: Double Digit

Cash flow: couple hundred/month

Appreciation: Double digit (for past 10 years, will gladly send data)

Location: C, B- (suburbs and certain markets)

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare and Auto industries.

The bad reputation comes from OOS investors wanting $20k D market properties.

Investors can retire (FIRE) in a few years with these.

We love them.

@Nadine O. I did something similar to this last year. My fiancé and I had saved up some money living with family (outside of NYC) during the pandemic and both finally landed remote jobs. We decided that we would move to wherever we found the first profitable side by side duplex as long as we could see ourselves being happy with the location. We felt more comfortable starting real estate investing with a househack and wanted to take advantage of lower cost of living.

Narrowed it down to the suburbs of Denver (we were previously living in Denver and loved it), Charleston, and Wilmington, NC. All of which were cheaper than where our families were in the suburbs of NYC. And all of which have a ton of people moving to. We were looking for cash flow and appreciation.

We landed a duplex in Wilmington,NC. It was the most affordable option and we live <15 minutes from the beach which is unreal. If you have any questions on how we bought from another state and our experience so far feel free to direct message.

@Nadine O.

I have to second Jacksonville as @Gino Barbaro mentioned. 
The quality of life and cost compared to other major cities in the U.S. can't be beaten!

Plus the returns on cash-flowing properties that are also appreciating were a major deciding factor when we relocated from Northern Virginia to JAX.
With all the recent growth that North East FL is experiencing, the STR and AirBnB market is on fire down here as well.

-Andres