Newbie here-please recommend market to start with

[Tracy Wang]

Hi all
I am totally new to the rental investment. I am in California and looking into purchase out-of-date SFR as rental property. Given so many markets, which markets should I focus on my research? I would appreciate to start with a short list of markets you can recommend? For start, I will mostly likely go with a turnkey provider, if you can share the ones that you have good experience with, that'd be great!

thanks a lot, I am learning each day from this forum.

[Drew Sygit]

You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

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

[Drew Sygit]

@Auryana Faramarzi

Not understanding what tax breaks you would get on an in-state rental property over an OOS one?

You stated, "as I would be obtaining a primary residence loan", but isn't it a federal crime to commit fraud on a mortgage application by claiming a rental will be a primary residence?

[AJ Singh]

@Tony Kim

I agree with San bernadino being further away but Inland Empire is booming with their own job creation and rental yields. The renters are not commuting to LA but are in local jobs paying them well. The appreciation of real estate is on par with the LA and OC without the landlord unfriendliness policies..

[Catherine Coy]

<< isn't it a federal crime to commit fraud on a mortgage application by claiming a rental will be a primary residence? >>

Yes, it is.  Occupancy checks are on the rise.

https://singlefamily.fanniemae...

[Kevin Uzelac]

Hey @Tracy Wang Philadelphia is a great location for cheap single family rentals. This market has also seen a lot of appreciation in the last year just like every other market has, making it even better for buy and holds. Taxes are low and there's a low barrier to entry. 

[Chris K.]

@Tracy Wang honestly, do your due diligence and find your first market through research. Don’t ask others for market otherwise they would be buying there ;-)

[Auryana Faramarzi]

@Drew Sygit yes that would mortgage fraud and that is not what I would be doing. I have sent you a private message for clarification. 

[Aidan Driggers]

@Kristen L Garner what areas specifically do you recommend? I know that there are some areas with higher poverty rates and some nicer areas. What do you recommend. Thanks :)

[Catherine Coy]

You can do a bunch of keywords like "safest cities in California," or "Texas cities with the highest poverty rates," or "cheapest cities in Illinois."

[Kristen L Garner]

@Aidan Driggers I like Marion County but knowing the areas really helps.  North of Indianapolis is "nicer", East is up and coming but more "street to street", South of Indianapolis is great but harder to find good deals, West is solid.  Lots of distribution centers and jobs coming into Indianapolis and the surrounding areas. Feel free to hit me up with specific area-related questions. (or finance questions - I'm a lender that specialized in Indy)  I also know great agents who are rockstars!

[Jake Drappi]

@Adam Schroeder hi Adam - I wanted to see if you could share what parts of Florida are you referring too? I was looking at that market and would appreciate the insight. Thanks

[Adam Schroeder]

Originally posted by @Jake Drappi:

@Adam Schroeder hi Adam - I wanted to see if you could share what parts of Florida are you referring too? I was looking at that market and would appreciate the insight. Thanks

I work at Rent to Retirement and we are loving the southwest Florida area in and around Cape Coral. The population is booming and we're able to buy and finance new construction for ~275k that is currently appraising at 360-380k

[Catherine Coy]

Bill Gatten wrote:

<< Next, instead of your taking the property's title (deed), 'you are assigned a beneficiary interest in the trust ('which affords you full (100%) fee-simple ownership benefits...and control of the property--without the need for a down payment or bank credit qualifying. >>

Where's the seller in all this?  Does the seller just give the property to you?

[Joseph Cornwell]

@Tracy Wang I love Cincinnati, Ohio. Of course I am biased :) There are many great cities in the Midwest and South that have strong cash flow potential. If you have any questions for my market feel free to reach out, good luck on your research! 

[Peter Mckernan]

@Tracy Wang I would say check the areas @AJ Singh mentioned due to the job growth there and the ability to still cashflow or value add in certain locations of the Inland Empire it is a good idea to look there then if you want go to OOS Investing. The appreciation is something here not to bet on; however, gives a lot of upside when looking at rentals in CA verse out of CA.  

[Nick Giulioni]

Hi Tracy, I'm from California but started my real estate journey here in Indianapolis. Now, I have almost a hundred doors. I would love to share my experiences and chat you more if you're intersted.

[Wale Lawal]

Most of my out-of-state clients are investing in Texas. Here's an article of places to invest and why. Always practice due diligence on any market and talk to an expert. Good Luck!

https://www.noradarealestate.c...

[Clay Boykin]

@Tracy Wang Columbus, OH is first time and experienced investor friendly. Most deals are as old as 1890 but their are some around 1940-70. Indianapolis is similar to Columbus as well. Those are my two favorites personally. Finding a turnkey can be challenging in this market as well. I usually target mid-high rehabs. 

[Drew Sygit]

@Auryana Faramarzi glad to hear:)

We can't access your DM as BP blocked that.

[Rick Albert]

I would consider investing in your own backyard as a house hack.  Assuming you are paying rent, the cash flow you would be getting from the other rentals would just go towards paying your own landlord.  Through house hacking, you are getting paid towards your own investment.

[Paul Gimmarro]

Hi Tracy!

Take a look at KC. Kansas City is landlord friendly and matches some of the things you are looking for based on your other comments on this post. WBest of luck to you in your journey!

[Cameron Braig]

The sunbelt continues to provide great opportunities. Cities like Atlanta, Charlotte, Jacksonville, Tampa, Orlando, Dallas and Phoenix have grown in areas like income, population, jobs and rent. The growth in these major metros has also brought growth to tertiary markets like Chattanooga, Winston Salem, Huntsville and Birmingham, Best of luck.