Selecting a Market (Specific Ideas)

[Jewel B.]

Happy Sunday!

Oh no - not another "choosing a market" to invest in post!

Needless to say, with 50 states plus DC, US territories, and technically the globe to choose from, it's very overwhelming to pick. Of course, every market has its pros and cons and fits different goals and strategies (another thing there's so many to choose from).

My situation

I currently enjoy a flexible schedule with the ability to (and love of) travel. I generally have a chunk of change in a HYSA, but unfortunately I was out of work for most of the year, which, combined with getting slammed with a hefty tax bill, leaves my current cash reserves minimal (I don't expect them to begin building back up until around March). I am a first time homebuyer with no student loans, medical debt, credit card debt, or auto loans, and I enjoy fairly low cost of living. I anticipate getting preapproved for around 300K with a conventional lender.

My goals

Although I hope to benefit from all 4 aspects of real estate investing (cash flow, appreciation, tax benefits, mortgage paydown/build equity), my primary focus is on cash flow (vs appreciation). I would like to be work optional at or before Dec 31, 2027. I also max out my Roth IRA annually and have brokerage accounts. I would rather have fewer doors with higher cash flow than just have many doors for the sake of playing Pokémon when they barely cash flow (personal preference).

My thoughts

Ideally, it would be great to use an FHA loan to house hack a local 4plex and maximize the value of the FHA loan (vs a SFH or duplex). However, public MLS inventory is limited (I meet with a realtor this week), so I either need to watch the MLS like a hawk or find something off-market and hopefully not looking exclusively for cash offers. Since conventional lending is not in my future for several months, I would be looking for subject-to, seller financing, and/or hard money, depending on the situation (still learning more about those).

Naturally, going where the numbers make sense is my priority, but it would be a nice bonus if it were somewhere I myself would like to go or could realistically drive to in a day (or hop on a quick flight to). As such, I'm looking at the Midwest and South for cash flow, proximity, and climate.

My strategies

Oh, so many options again!

I am interested in rental property investing, especially BRRRR or value add - purchasing B/C properties in B/C neighborhoods. However, I am open to LTRs, MTRs, or STRs and Section 8 or student housing (need to research both more, but both interest me). Although I intend to hire and budget for property management (or a cohost), I do realize that some approaches will require a more active approach, which I am fine with. Obviously MTRs and STRs require furnishing and more strategic placement, as well as having higher turnover and more guest communication and scheduling cleanings. Section 8 has some more red tape and extra inspections and still require proper screening. Student housing likely means annual summer turnover (summer STR?) and potential partying. Everything has its pro and cons. It's also my understanding though that well done MTRs, STRs, Section 8, and student housing can enjoy much higher cash flow than a traditional LTR. It's all in the numbers, location, and purchase price of course :)

My general location ideas

PA

Lehigh Valley

Scranton

Pittsburgh

Philadelphia (it's my understanding that the city is tenant friendly but the suburbs are landlord friendly? And of course zip code and neighborhood matter)

NC

Greensboro-Winston Salem

Fayetteville

OH

Akron

Cincinnati

Columbus

Cleveland

IN

Indianapolis

Fort Wayne

SC

Myrtle Beach

WV

FL

Ocala

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I looked at landlord vs tenant friendly, property taxes, income taxes, insurance rates, and the Top 100 cash flow chart when choosing these states. I know every state has its pros and cons and different markets, but I gotta narrow it down somehow haha. Unless you have a slam run elsewhere :)

See a state you're familiar with? Let me know which areas are best for LTRs (life) vs MTRs (hospitals) vs STRs (tourism) vs student housing (universities) if ya know! Or drop Core 4 referrals. 

Thank you in advance!