How to find a marcket

Question

Hi everyone,

I have a strong desire to start investing in real estate. I'm eager to find my first "flip" deal and get started on this exciting journey.

I have some initial capital to begin with, and I believe I've done enough research to understand the process itself. However, I'm struggling with identifying the right market. I'm unsure how to go about finding a suitable market for me.

While I currently reside in New York City, the local market isn't relevant to me due to the high costs involved. Instead, I'm interested in exploring a market somewhere along the East Coast, but I'm not sure how to go about finding the right market.

If any of you have advice, tips, or guidance on how to identify potential real estate markets, especially along the East Coast, I would greatly appreciate it. Your insights could really help me kickstart my journey.

Thank you so much!

Alex Deacon · Answer

@Elad Itzhari I have worked with hundreds of out of state investors over the years. I am focused in the Pittsburgh PA Market. I think we still have a good amount of inventory but finding a good property here takes time. Not only to find the deal but more importantly educating and raising your own real estate I.Q.

I would focus on markets withing driving range of where you live. This will increase your ability to learn the market and make the best decisions. If thats not possible then perhaps Pittsburgh could work for you. Let me know if you need any further information about the market here.

Alfath Ahmed · Answer

Hey Elad, Ohio is an awesome market to invest in. I just read a published article today by the Columbus Dispatch that Franklin County home values are supposed to rise by 30-35% with re-appraisal. We have had nearly a 39% property value gain from 2019 to 2022 in the Columbus market.

I personally invest in the Columbus market for it's strong appreciation factor, low taxes, and also because it is a land-lord friendly state. I have a lender that lends me at 15% investment loan for turnkey and I have also been able to build a good connection with my hard-money lender.

Andrea Lane · Answer

Elad,

I agree NYC is not always the best market, but let me ask you a few questions:

- Why on the East Coast (Syracuse, NY - Wilmington NC - Harrisburg, PA are a few)

- Have you looked at middle America, the price points are frequently better and taxes are lower (Columbus OH - Fort Wayne ID - Atlantic City NJ)

- How will you build a team in an area you are not in?  This is key to investing at a distance.

- Do you plan on going to the location and researching the area in person?  It is tough renting in states that are not your own but it is more difficult to do flips.

I would look at the suburbs for any cities you may look at, there are usually up-and-coming areas with better deals.

Good luck, let me know if I can help

Jimmy Lieu · Answer

Hey Elad, totally can relate with you being from an expensive real estate market - I moved to Columbus a few years ago (from Portland, Oregon which was super expensive) to become a full time real estate investor, and ever since, I've completed quite a lot of BRRRRs, flips, and own a successful rental portfolio here in Columbus Ohio. There's so many catalysts for population and job growth (Intel, Honda, Amazon, Nationwide Hospital, etc). I can definitely tell you there's still a lot of positive cash flowing and 1% rule deals and you get amazing appreciation. As an investor and agent here in Columbus Ohio, if you have any questions or want to connect, definitely reach out!

Nicholas L. · Answer

somewhere you can drive to, so you can be hands-on

Michael Smythe · Answer

@Elad Itzhari

We think the Midwest is a GREAT place for OOS investors to consider!

YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods:

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

(BP search feature can be problematic, so we’ve also added links @ our website under View Cities & Neighborhoods We Service)

Your biggest question shouldn't be WHERE to invest, but HOW you will invest!

Many OOS investors set themselves up for failure because they don't invest the time to ACTUALLY understand:

1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

2) The Class of the PROPERTY they are buying - which is relative to the overall area.

3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

7) That OOS property Class rankings are often different than the Class ranking of the local market they live.

8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.

9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.

10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.

11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.

https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799

Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?

Let us know if we can help in any other way.😊

Kris Kraatz · Answer

Hello Elad!  Take a look at Texas, and secondary markets.  You'll need a team.

We just helped an investor purchase a property.  Buy price was $180k, reno was $42k & dispo was $281k.  Let me know if you have an interest in North Texas :)

Elad Itzhari · Answer

Thank you Max,

But, I work in Manhattan and need to live here. I can't see how I can do "househacking" on here...

Elad Itzhari · Answer

Thank you, Andrea,

I thought on the East Coast because it would be easier for me to travel there but I'm actually open for any other places.I will probably go to see the place for the first dill, to feel it myself and to meet some people.

I'll appreciate any tip that you have for me.

Thank you

How to find a marcket

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