New investor looking to start out of state

[Donnie Tucker]

Hello everyone. I have a list of potential markets to invest in. I need to pick one so I can hone in on it but I'm having trouble finding sites with recent market data that are user friendly. Can anyone help?

[Andres Martin]

I've found out that Zillow can be a great place to find some specific data. You can filter the data you are looking for based on whichever markets are in your list of potential candidates.

https://www.zillow.com/research/data/

If you are looking for more information about migration patterns and employment opportunities, I would recommend the U.S. Bureau of Labor Statistics:

https://www.bls.gov/ces/

If you have a more specific city in mind, you can always visit the city/county website and see what kind of public information they have, such as new developments, etc.

I hope this was helpful to you. Feel free to DM me if I can be of further assistance.

[Donnie Tucker]

Quote from @Andres Martin:

I've found out that Zillow can be a great place to find some specific data. You can filter the data you are looking for based on whichever markets are in your list of potential candidates.

https://www.zillow.com/research/data/

If you are looking for more information about migration patterns and employment opportunities, I would recommend the U.S. Bureau of Labor Statistics:

https://www.bls.gov/ces/

If you have a more specific city in mind, you can always visit the city/county website and see what kind of public information they have, such as new developments, etc.

I hope this was helpful to you. Feel free to DM me if I can be of further assistance.

 Thank you for the detailed reply.  I will definitely check those out!

[Min Zhang]

Hey Donnie, I would recommend you to look into the Ohio market. Columbus has been booming lately, thanks to big tech companies like Intel ($20 billion), Meta, Amazon, and Google setting up shop here. This has led to a rise in property prices and an influx of people seeking job opportunities in the city. I also have investments in Cleveland and Dayton. Please let me know if there is any way I can be of assistance. Let me know how can I help

[Simon Ashbaugh]

Hey Donnie, any particular location that's caught your eye so far? There are a few sites that would be ideal for you to use. Zillow is great for overall market trends, neighborhood comparisons, and estimated home values. Redfin offers comprehensive data and reports with unique insights like demographics, commute times, and school ratings and Realtor.com is excellent for filtering by specific criteria like market, property type, and budget. Their user-friendly interface makes it easy to narrow down your search, you should give those a try first. Hope this helps!

[Donnie Tucker]

Quote from @Min Zhang:

Hey Donnie, I would recommend you to look into the Ohio market. Columbus has been booming lately, thanks to big tech companies like Intel ($20 billion), Meta, Amazon, and Google setting up shop here. This has led to a rise in property prices and an influx of people seeking job opportunities in the city. I also have investments in Cleveland and Dayton. Please let me know if there is any way I can be of assistance. Let me know how can I help

Thank you Min.  2 areas in Ohio are on my list.  Seems like everyone's investing there.  I will do some market research and see it it's for me!

[Donnie Tucker]

Quote from @Simon Ashbaugh:

Hey Donnie, any particular location that's caught your eye so far? There are a few sites that would be ideal for you to use. Zillow is great for overall market trends, neighborhood comparisons, and estimated home values. Redfin offers comprehensive data and reports with unique insights like demographics, commute times, and school ratings and Realtor.com is excellent for filtering by specific criteria like market, property type, and budget. Their user-friendly interface makes it easy to narrow down your search, you should give those a try first. Hope this helps!

 Definitely helps, thank you.  I have a big list I need to narrow down.  I went to census bureau but couldn't figure out how to pull up data.  Just figured it out last night

[Matthew Morrow]

Our market- Allentown PA. Is on the map now for many reasons.

Our market can be advantageous for investors of all levels, especially those interested in BRRR. The Lehigh Valley in Pennsylvania, encompasses the Cities of Allentown, Bethlehem, and Easton, and surrounding areas- has been growing and evolving as an attractive real estate investment destination for several reasons:

Rising Property Values: The Lehigh Valley's housing market has shown substantial growth, with properties appreciating steadily. This trend suggests potential for long-term ROI both in property value and Rents

Affordability and Investment Opportunities: Compared to the national average, the Lehigh Valley offers more affordable housing options. A significant portion of income in the area is allocated to mortgage payments, making it an attractive market for investors. The presence of distressed properties, including foreclosures, provides opportunities for investment at potentially lower costs, appealing to those interested in refurbishment and resale or rental. Based on US Census data, this is the only area of PA that has a positive population growth, as people move away from bigger cities and into rural / affordable areas.

Diverse Real Estate Options:

Investors in the Lehigh Valley have a variety of options, including single-family homes, multi-family properties, and commercial real estate. This diversity allows for tailored investment strategies, whether for rental, refurbishment, or commercial use.

Urban Revitalization and Development:

Significant revitalization efforts, particularly in downtown Allentown, have enhanced the Lehigh Valley's appeal as a center for business, culture, and metropolitan living. Investments in mixed-use development, office buildings, and residential areas have attracted more residents and businesses, positively impacting the real estate market.

Strategic Location and Infrastructure:

The strategic location of the Lehigh Valley, bolstered by infrastructure like the Lehigh Valley International Airport, makes it a hub for transportation and logistics. This infrastructure supports the area's growth, enhancing its appeal to businesses and residents, which positively impacts the real estate market. It also is a huge Healthcare education and care hub. We have several highly respected Universities and other fortune 500 companies with HQ in town. Amazon, FedEx, Starbucs, and ChickFilA have all had massive surges in presence here, and we all know they are heavy into market research and population movement.

Economic Growth and Job Market:

The Lehigh Valley's economy has been growing, supported by diverse sectors like healthcare, education, and manufacturing. The improving job market, driven by this economic growth, sustains the demand for housing and makes the area an attractive place for people to live and work.

In summary, the Lehigh Valley's growing economy, affordable housing market, and urban development initiatives, along with its strategic location, make it a promising area for real estate investments. Whether it's the potential for property value appreciation, the variety of investment opportunities, or the vibrant urban environment, the Lehigh Valley offers several compelling reasons for investors to consider it as a destination for building and scaling their real estate portfolios.

Hope this helps!

[Simon Ashbaugh]

Quote from @Donnie Tucker:

Quote from @Simon Ashbaugh:

Hey Donnie, any particular location that's caught your eye so far? There are a few sites that would be ideal for you to use. Zillow is great for overall market trends, neighborhood comparisons, and estimated home values. Redfin offers comprehensive data and reports with unique insights like demographics, commute times, and school ratings and Realtor.com is excellent for filtering by specific criteria like market, property type, and budget. Their user-friendly interface makes it easy to narrow down your search, you should give those a try first. Hope this helps!

 Definitely helps, thank you.  I have a big list I need to narrow down.  I went to census bureau but couldn't figure out how to pull up data.  Just figured it out last night

 Glad it worked out for you. Feel free to connect if you need any help. 

[Patrick Drury]

@Donnie Tucker
The Midwest markets are great for investing in form out of state. They have a low barrier of entry, they are landlord-friendly and you can find deals that cashflow. I would recommend checking out Columbus and Cleveland OH markets in the Midwest. 

[Nicholas L.]

@Donnie Tucker

don't - invest in state.  wherever you are.  if your immediate market is too expensive look a few hours away.

OOS investing is more difficult than it's been presented.  talk to this guy:

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

or this guy:

https://www.biggerpockets.com/forums/67/topics/1167190-strug...

[Josie Brown]

If you already have a list of markets you'd be interested in investing in, consider reaching out to a property management company that works in those markets to provide you with more insight that can help you make a decision on where to start!

[Bradley Buxton]

@Donnie Tucker

For out of state investing Check out the Reno, NV / Tahoe markets. Influx of jobs and people from Silicon Valley and all over California. Low property taxes, landlord, friendly and restricted building. There are still solid cash flow and appreciation buys in the market for SFH and MF. The last few weeks the buying has been heating up for sure. Happy to help find and analyze some deals in the area.

[Donnie Tucker]

Quote from @Patrick Drury:

@Donnie Tucker
The Midwest markets are great for investing in form out of state. They have a low barrier of entry, they are landlord-friendly and you can find deals that cashflow. I would recommend checking out Columbus and Cleveland OH markets in the Midwest. 

Thank you Patrick.  I have heard that.  I'm looking in midwest and southeast states

[Donnie Tucker]

Quote from @Nicholas L.:

@Donnie Tucker

don't - invest in state.  wherever you are.  if your immediate market is too expensive look a few hours away.

OOS investing is more difficult than it's been presented.  talk to this guy:

https://www.biggerpockets.com/forums/48/topics/1160450-run-i...

or this guy:

https://www.biggerpockets.com/forums/67/topics/1167190-strug...

Thanks for the reply Nicholas.  Although I do appreciate the advice, in all honesty both those scenarios sound like they're possible whether I'm investing locally or remotely and I can't imagine them feeling any better just because they're closer to home.

[Donnie Tucker]

Quote from @Josie Brown:

If you already have a list of markets you'd be interested in investing in, consider reaching out to a property management company that works in those markets to provide you with more insight that can help you make a decision on where to start!

Thanks Josie, that's a pretty good idea.  I'll narrow down my list a little bit and give that a try.

[Donnie Tucker]

Quote from @Bradley Buxton:

@Donnie Tucker

For out of state investing Check out the Reno, NV / Tahoe markets. Influx of jobs and people from Silicon Valley and all over California. Low property taxes, landlord, friendly and restricted building. There are still solid cash flow and appreciation buys in the market for SFH and MF. The last few weeks the buying has been heating up for sure. Happy to help find and analyze some deals in the area.

Thanks Braddley, I will think about that

[Nicholas L.]

@Donnie Tucker

fair enough, but think about posting on BP asking for advice because "my contractor stopped responding."  the answer is - "go see your contractor." which you can't do from thousands of miles away.

[Wes Holmes]

I think the worthwhile sites cost money. Check out this lady using Propstream.

[Leo R.]

@Donnie Tucker usually, "new investor" and "out of state" don't mix. I'd suggest reading up on the topic on the forums, where you'll find many examples of inexperienced investors crashing and burning hard trying to do OOS REI...the story is usually the same--they had no experience with REI, they couldn't find any cashflowing properties locally, but they saw that properties in other states (often the Midwest) cashflowed well on paper. So, they bought an OOS property (usually a freshly rehabbed A-grade house in a C or D area) because the house looked awesome in pictures, and the cashflow looked good on paper. Fast forward a few months, and they have non-paying tenants who are wrecking the place, and a MIA property manager who (understandably) won't put in the ENORMOUS amount of effort required to manage a property in a C or D area for a small-time client from another state. Think of it from the PM's perspective: if you were them, would you deal with the headaches of a C or D area (non-paying tenants, trashed properties, crime, etc.) for a 10% cut of a single property that rents for $1100-1800/month? ...I wouldn't.

To make matters worse, the property isn't appreciating (because it's in a low appreciation market, or even a depreciating market), and the tenant pool is primarily made up of people with bad credit, low/no income, and a history of property damage at the previous places they've rented. So, now they're stuck with a non-appreciating (or even depreciating) property, that only attracts bad tenants, that no PM in their right mind wants to manage. Not a good situation.

Let's put all that aside for a moment, though, and assume you can avoid all those pitfalls. You find an OOS property that appreciates, attracts good tenants, and is easy to manage. Even then, OOS REI will come with some significant challenges...

Specifically, one of the MANY reasons OOS REI is so difficult (esp. for beginners) is that it requires you to assemble, manage, and incentivize a team of people you'll be completely reliant on from hundreds of miles away (sometimes without even meeting those people face to face). That's a huge challenge, even for experienced real estate investors who understand everything their team needs to do, and who have the money to incentivize their team's performance. But, if you're not experienced with the things your team is doing (e.g.; finding, analyzing, acquiring, and managing a property), then it becomes exponentially more difficult.

Think of it this way: forming and managing a team of real estate professionals (agent, inspector, property manager, contractor, etc., etc.) without any real estate experience is a bit like trying to form and manage a law firm without any legal experience, or trying to establish and manage an auto repair shop without any automotive experience--those would be monumental challenges even locally, but doing it from hundreds of miles away is near impossible. Can it be done? Yes. Are there ways of getting started in REI that are a thousand times easier? Definitely.

Trying to go OOS for your first REI deal is a bit like trying to surf a monster 100 foot wave before you've learned to swim, or trying to ski a double black diamond for your very first run.

Fortunately, there are simpler strategies that are much better suited for a first time RE investor (house hacking, specifically). I've written a lot on the forums about all the reasons house hacking is the best strategy for beginner investors--feel free to take a look at those posts.

I'd suggest starting with a more beginner-friendly strategy, get your experience from that, and THEN (if you want), try the more difficult strategies like OOS REI.

If you're dead-set on OOS REI, then I'd suggest studying up on the books, articles, forum posts, videos, etc. on the subject, and talking with as many OOS investors as possible (ESPECIALLY inexperienced investors who tried OOS REI for one of their first deals). There are plenty of those folks in the forums. In particular, I'd suggest asking those folks about what types of challenges they encountered, lessons they learned, and mistakes they made with OOS REI ...It's a lot easier, safer, quicker, and cheaper to learn from other peoples' mistakes than to make your own...

Good luck out there!

[Michael Smythe]

@Donnie Tucker

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

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.😊

[Lane Kawaoka]

When I was doing turnkeys in 2012-2015 I was in Birmingham, Atlanta, Indianapolis.

Other popular markets: Gary (IN), St Louis, Huntsville, Phoenix/Tempe/Mesa, Kansas City, Memphis, Little Rock, Indianapolis, Harrisburg (PA), Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets. 

[Jordan Ray]

Quote from @Lane Kawaoka:

When I was doing turnkeys in 2012-2015 I was in Birmingham, Atlanta, Indianapolis.

Other popular markets: Gary (IN), St Louis, Huntsville, Phoenix/Tempe/Mesa, Kansas City, Memphis, Little Rock, Indianapolis, Harrisburg (PA), Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets. 

Hey Lane! Let me know if you need any help in Memphis TN and/or North Mississippi if you look into that market.

[Alex Evans]

I would recommend Memphis! 

Memphis is a great market for many reasons, but three main things that Memphis has going for it are..

- Memphis has relatively affordable housing, and you may find properties within your budget.
- The city has a diverse economy, with sectors such as healthcare, transportation, and logistics.
- Memphis has a strong rental market, making it attractive for investors seeking cash flow.

With affordable prices and over 50% of the city being renters there is always opportunity in Memphis

[Nicholas L.]

@Leo R.

thanks for this.  agree 100%.  i am going to start linking to this thread the next time the question gets asked...

[Hardy Vibert]

@Donnie Tucker

Hi there! St. Louis has proven to be a solid investment for me over the past five years. I recommend exploring

https://www.zillow.com/research/data/

and engaging with local real estate groups for up-to-date market data. Feel free to ask specific questions about St. Louis, and I’ll be happy to help!