How to Narrow my Market Search

Question

Hello all!

I am looking to try and buy my first REI property this year. I live in San Jose, California and I would prefer to invest somewhere that is within driving distance (at least for my first few properties). However given my budget (probably ARV of 200k), and the markets physically close to me, I don't know if that is feasible. I am looking to leverage the BRRRR strategy for the properties I want to invest in.

I am looking for any advice on how best to quickly narrow my market search as there are many cities and neighborhoods. My first thought was to look at average cost of housing in each city and start looking for a city that matches up with my budget and go from there.

I appreciate any insight, assistance, and mentorships. I typically pick things up quickly, but I realize experience is the best teacher, so I am trying to lean into the process and start.

Thank You!

Joseph Crunkilton · Answer

Best way is to ask for some suggestions on here and buy there. Each one has quirks and you can spend years scrutinizing every detail. What matters is time IN the market. Not timing the market.

KC, Indy, Little rock, Columbus, Cleveland, all great markets. @Zach Lemaster helped me buy my first few out of state rentals and I'm sure he could point you in the right direction.

Jonathan Greene · Answer

You don't want to talk to realtors yet because they are all going to pitch you on their area which is of no use if you have no real boots on the ground there. You definitely do not want to go on Zillow to find a location.

This is what you do:

1. Make a list of every place you have ever lived or gone to school

2. Make a list of where your closest family and friends live (the ones you like and trust, not Aunt Mary)

3. Comb through some posts on the most emerging markets in the country at your price point

4. Match up 1&2 with 3 to see where the crossover is.

This way you have some advantage in the area. Either trusted eyes or personal knowledge which will make a first investment outside of San Jose much easier.

Edward Suess-Hassman · Answer

Was originally looking to do the first few properties within driving distance to get a handle on the process before potentially going out of state.

Paul Gimmarro · Answer

Start by browsing biggerpockets to see where other experienced investors are going. Once you establish a few, do your research on each market and find what best fits your goals. KC is still booming, and would be happy to chat with you about opportunities here.

Lawrence Potts · Answer

Why not partner with someone with the experience and help find a deal that makes sense for them? I’m confident that if you brought a deal to the table, they’d show you how they get the deals done. At that price point in the Bay Area, you might be compromising on important factors (location, safety, etc.), that could make a deal go sour. And if you’re just starting out, a bad deal could set you back years.

Leverage your lack of experience and financing with a partner that has those attributes and provide that partner with value (time, bringing a deal, etc), and learn as much as you can from them. Yes, you won’t make as much, but what you’ll keep is worth more than if the cut you’d keep for yourself on an okay deal.

What skills/trades/value can you offer someone that has what you need? Hope that helps!

Eliott Elias · Answer

• Define your criteria: Start by defining what's important to you, such as location, property type, budget, and target rental income. This will help you narrow down the list of cities and neighborhoods
• Network: Reach out to real estate agents and other investors in the areas you are interested in to get their local insight and perspectives. 
•

Melissa Robbins · Answer

Are you sure you don't want to look out of state?  Your $200K could go far in the midwest. And it's not that hard to manage from a distance. If you want to stay in CA, you might also consider multifamily or commercial syndication in your area if you meet the accreditation requirements.

Kenny Durrant · Answer

@Jonathan Greene I am getting started as well, and I really appreciate your comment. Some great actionable steps to get moving in the right direction.

Koshu Takatsuji · Answer

To be honest, at that price point it will be pretty difficult to find a property in the Bay Area.

After looking at the MLS for under $250k, I found only a handful that's within an hour driving distance from SJ.

Might be able to get a condo or mobile home for that price, but good luck to you on your search!

Cody Hawkins · Answer

@Edward Suess-Hassman a great place to start looking for homes that may meet your criteria is Zillow. You are able so set parameters for the type of home and prices and you can filter by key words, locations, and more. This is how I prefer to keep up on the markets I’m looking at investing in.

How to Narrow my Market Search

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