New investor choosing a market 2024

[Sean Haran]

Hello all! I'm an aspiring investor, and I'm living in Los Angeles so investing local is basically out of the question. Even a house hack is super tough in the city now. If I find one of course I'll jump on it but anything with an ADU or multiple units and in a decent area is generally significantly above the $1M mark here.

So now I’m stuck at the stage of choosing a market.

I have ~$60k saved up and set aside (separate from personal expense/emergency funds). I work a 1099 job selling solar, making anywhere from 10k-35k per month depending on the month. I know that $60k cash isn’t going to get me far investing out of state these days, I am planning on adding another 10-20k to that and going into something with 70-80k set aside for it. (Although if I can use less that’d be fantastic)  My fiancé (getting married this year) will also be able to qualify for Real estate professional status, which should hopefully help us with taxes.

I don’t really need cashflow in these first few years at least, I’m more than happy to keep working and using that income to build our portfolio. However, within 5 years or less I ideally would like to be able to at least cut back how many days per week I’m working, and start transitioning into doing real estate more, eventually full-time. 

My first option, which is what I'm leaning toward, is starting out with some BRRRR's in Detroit, as I could probably get in for 80k-ish and then hopefully get the majority of my money out. Recycle that money while continuing to save more to replenish it and keep BRRRR'ing until I have a nice chunk of equity. Then decide if I want to 1031 all of it into another market or whatever makes the most sense at that time. I really like the idea of pulling my capital back out and recycling it, which is why I like this option a ton.

Other option I'm thinking of is investing in a higher priced market with a potential for good appreciation. I have the ability to sell solar out in Florida and have done so in Tampa. You can still find houses around Tampa for like 200-250k, meaning my cash budget would cover a down payment. However, this wouldn't really leave me much room to do significant renovations to the point of being able to quickly pull out capital. I suppose I could find something out there for less that needs more work but I'm afraid anything much less than 200k in or near Tampa area is a total tear-down kind of job, which I don't want to do from across the country for my first investment. Tampa won't really cashflow much it seems after looking at a lot of deals out there, but I imagine appreciation will be significant and consistent there. Also, in the right areas in Tampa it seems that a STR could be great, and my fiancé does have enough free time to cover the extra time-commitment a STR would require, that part wouldn't bother us.

VERY open to hearing suggestions on other markets or other options to make things work in one of these markets. Trying to absorb as much info as possible while I’m in the last couple months of saving up for this first purchase! Thanks in advance! 

[Manny Vasquez]

Sean - Welcome to BP! I believe California does have some great opportunities. However, these properties won't be low hanging fruit. You will have to do a little more research, dig a little deeper and turn a few more stones. You may also have to get your "hands dirty" in order to make these properties cash flow. Just last year I expanded my property portfolio in California which now includes Orange, Los Angeles, Riverside and Kern counties. Depending on where the property is situated and the "local market conditions" I have them rented out as either long term, mid-term or short term. Some cash flow more than others, but they all cash flow pretty well. I don't agree with all of the local laws and politics in California, but its still a great place to invest. Property appreciation is second to none and rents always go up here. You get the best of both worlds.

You don't have to look out of state. Look at Riverside, San Bernardino, Kern, and Tulare counties. There may be some excellent opportunities there.  I am ALWAYS looking at properties up and down the state (besides looking for properties for my clients, I'm also looking for myself).  Again, you won't find "low hanging fruit" but deals are out there.

Since you mentioned that you are getting started, I highly suggest you house-hack (this is how I got started in Costa Mesa, Orange County). I did this for a few years and then I started to scale. If I did it, and I'm no one special, anyone can do it. You'll have to make some sacrifices, put in some work but I promise that its all worth it in the end.

Becareful with BRRRR-ing out of state. If you plan to be there at the property for the entire rehab process, then go for it. But if you plan to travel back and forth, just make sure that the people you have working on your property are highly reputable and trustworthy. Establish some "safeguards" to keep them honest and consistently check their work. I had a project bite me in the butt because I wasn't more diligent in "checking in" on the contractor.

If you need any help or additional advice, feel free to reach out I have helped a lot of my investor friends purchase properties in other counties in California. I hope this helps and good luck in your journey!

[Travis Biziorek]

Hey Sean, you know I'm very pro-Detroit and we've already been talking a lot about it.

I'm sure some Florida folks will chime in here. I personally don't know much about that market but I have worked with a lot of people in Florida that are investing in Detroit.

Some newer challenges in Florida are insurance costs going through the roof. I also wouldn't be surprised to see a lot of folks move out of Florida toward the midwest as climate change impacts become increasingly severe. 

Finally, folks undersell the appreciation in Detroit today. I've experienced it big time in my own portfolio. But you also see it in the headlines now, like Detroit recently "dethroning" Miami as the highest appreciating market in the states:

https://finance.yahoo.com/news/detroit-dethroned-miami-faste...

[Wale Lawal]

@Sean Haran

Investing in real estate can be a rewarding journey, especially when researching cities like Detroit and Tampa. Factors to consider include lower entry costs, opportunities for equity growth through renovations and property appreciation, as well as the ability to recycle capital using the BRRRR strategy. It's important to note that Detroit may have higher vacancy rates and lower demand, which could impact rental income and property values. On the other hand, Tampa, Florida, presents potential for strong appreciation and profitability in the short-term rental market, despite higher entry costs and potential competition.

If you want to make smart decisions about investing in real estate, it's important to thoroughly research both Detroit and Tampa. Get in touch with local real estate professionals like agents, property managers, and investors, and come up with a clear plan for managing your properties, handling maintenance tasks, and addressing any potential problems with tenants from a distance. Work closely with a lender to learn more about your financing choices and investigate various loan programs that may be available. To minimize risk and capitalize on different market conditions, consider diversifying your investments across multiple markets or types of properties. Always keep your long-term objectives in mind and make sure each investment aligns with your overall strategy.

Good luck!

[Patrick Drury]

@Sean Haran
If you are looking to invest out of state in a BRRRR the Cleveland market is a good market to check out that would fit in that price range. The Cleveland market is landlord-friendly, has a low barrier of entry, and cash flow.

[Min Zhang]

Hey Sean! Welcome to BiggerPockets! You're in the right place to learn about remote real estate investing. 

I like starting in the Midwest because it's affordable and offers good cash flow. Following David Green's Core 4 strategy (realtor, contractor, property manager, and lender) gives confidence to invest anywhere.  I focus on Columbus, Ohio, which has seen significant growth, especially with tech giants like Intel, Meta, Amazon, and Google setting up operations, driving up property prices and job opportunities. On average, 80 people move into Columbus weekly. On the other hand, if you have a lower budget, let’s say $100-$150k. Cleveland would be a great market for you. I have experienced cash flow anywhere from 10-18% with so much more to offer. As a real estate agent and an investor, I am on the market daily and explore opportunities for myself and my clients. Let me know if you need help!

[Nadeem Alamgir]

Hey Sean, the mid-market is pretty hot and affordable if you're looking to invest out of state. Check out Zillow hottest housing market of 2024: https://www.axios.com/2024/01/10/zillow-ranking-hottest-real…

Cleveland is a great market to focus on for BRRRRs.

You can find distressed off-market duplexes under 120k and SFH under 80k in B to C-class areas. I recommend working with an investor-friendly agent to help you figure out the market before analyzing any deals.

Happy to connect! 

[Samuel Diouf]

There are some great opportunities in the Ohio markets. Many investors from California, are choosing to invest in the midwest because of the low barrier to entry and yearly cash returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus due to the same reason.

https://www.zillow.com/learn/hottest-housing-markets-2024/

Columbus, Ohio is a great market to consider if you're leaning towards appreciation. Multiple, billion dollar companies are investing heavy in our area, such as Intel, Google, and Amazon. Which will bring plenty of other investors and general business to the area. I moved here from Florida after seeing the projected growth.

[Nicholas L.]

@Sean Haran

i'd strongly encourage you to keep working on finding a house hack.  what i hear you saying is... properties are expensive, and so finding the right one is going to be difficult.  great!  it's difficult.  real estate investing is difficult.

BRRRRing out of state is also very difficult. way tougher than advertised. i BRRRR locally and it's hard. i don't see how you do it unless either (1) you are there in person or (2) you have a trusted team on the ground. and no one is going to guarantee your deals. if an appraisal comes in low and it doesn't work out? that's on you. no one is going to cover it for you.

here's some good reading for the OOS investor

https://www.biggerpockets.com/forums/12/topics/1171104-the-m...

https://www.biggerpockets.com/forums/48/topics/1159104-overl...

[Jorge Vazquez]

Hi Sean! It's great to see your detailed plan for investing. Starting with BRRRR in Detroit sounds like a solid strategy, especially with your goal to recycle capital. As for Tampa, where I've been a broker and investor for 20 years, the appreciation potential is significant. Immediate cash flow might be tight, but the market here could offer unique advantages, especially with your ties through solar sales and possibilities in short-term rentals. If you're looking for insights or need help navigating your investments, I'd be happy to help. Let's make your investment journey successful right from the start!

[Jimmy Lieu]

Quote from @Sean Haran:

Hello all! I'm an aspiring investor, and I'm living in Los Angeles so investing local is basically out of the question. Even a house hack is super tough in the city now. If I find one of course I'll jump on it but anything with an ADU or multiple units and in a decent area is generally significantly above the $1M mark here.

So now I’m stuck at the stage of choosing a market.

I have ~$60k saved up and set aside (separate from personal expense/emergency funds). I work a 1099 job selling solar, making anywhere from 10k-35k per month depending on the month. I know that $60k cash isn’t going to get me far investing out of state these days, I am planning on adding another 10-20k to that and going into something with 70-80k set aside for it. (Although if I can use less that’d be fantastic)  My fiancé (getting married this year) will also be able to qualify for Real estate professional status, which should hopefully help us with taxes.

I don’t really need cashflow in these first few years at least, I’m more than happy to keep working and using that income to build our portfolio. However, within 5 years or less I ideally would like to be able to at least cut back how many days per week I’m working, and start transitioning into doing real estate more, eventually full-time. 

My first option, which is what I'm leaning toward, is starting out with some BRRRR's in Detroit, as I could probably get in for 80k-ish and then hopefully get the majority of my money out. Recycle that money while continuing to save more to replenish it and keep BRRRR'ing until I have a nice chunk of equity. Then decide if I want to 1031 all of it into another market or whatever makes the most sense at that time. I really like the idea of pulling my capital back out and recycling it, which is why I like this option a ton.

Other option I'm thinking of is investing in a higher priced market with a potential for good appreciation. I have the ability to sell solar out in Florida and have done so in Tampa. You can still find houses around Tampa for like 200-250k, meaning my cash budget would cover a down payment. However, this wouldn't really leave me much room to do significant renovations to the point of being able to quickly pull out capital. I suppose I could find something out there for less that needs more work but I'm afraid anything much less than 200k in or near Tampa area is a total tear-down kind of job, which I don't want to do from across the country for my first investment. Tampa won't really cashflow much it seems after looking at a lot of deals out there, but I imagine appreciation will be significant and consistent there. Also, in the right areas in Tampa it seems that a STR could be great, and my fiancé does have enough free time to cover the extra time-commitment a STR would require, that part wouldn't bother us.

VERY open to hearing suggestions on other markets or other options to make things work in one of these markets. Trying to absorb as much info as possible while I’m in the last couple months of saving up for this first purchase! Thanks in advance! 

Hey Sean, 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!

[Nader Shariff]

Head to the midwest, and if you happen to come to Detroit , we will be here waiting for you. 

All jokes aside, I suggest looking into Detroit Michigan. It is a great market to enter so long as you understand not just all the pros but the risks as well. ensure you have a solid team on the ground and plan for the unexpected. 

Detroit has been great to myself and my team and I am a big believer in the comeback of the city.

[Sam McCormack]

Quote from @Sean Haran:

Hello all! I'm an aspiring investor, and I'm living in Los Angeles so investing local is basically out of the question. Even a house hack is super tough in the city now. If I find one of course I'll jump on it but anything with an ADU or multiple units and in a decent area is generally significantly above the $1M mark here.

So now I’m stuck at the stage of choosing a market.

I have ~$60k saved up and set aside (separate from personal expense/emergency funds). I work a 1099 job selling solar, making anywhere from 10k-35k per month depending on the month. I know that $60k cash isn’t going to get me far investing out of state these days, I am planning on adding another 10-20k to that and going into something with 70-80k set aside for it. (Although if I can use less that’d be fantastic)  My fiancé (getting married this year) will also be able to qualify for Real estate professional status, which should hopefully help us with taxes.

I don’t really need cashflow in these first few years at least, I’m more than happy to keep working and using that income to build our portfolio. However, within 5 years or less I ideally would like to be able to at least cut back how many days per week I’m working, and start transitioning into doing real estate more, eventually full-time. 

My first option, which is what I'm leaning toward, is starting out with some BRRRR's in Detroit, as I could probably get in for 80k-ish and then hopefully get the majority of my money out. Recycle that money while continuing to save more to replenish it and keep BRRRR'ing until I have a nice chunk of equity. Then decide if I want to 1031 all of it into another market or whatever makes the most sense at that time. I really like the idea of pulling my capital back out and recycling it, which is why I like this option a ton.

Other option I'm thinking of is investing in a higher priced market with a potential for good appreciation. I have the ability to sell solar out in Florida and have done so in Tampa. You can still find houses around Tampa for like 200-250k, meaning my cash budget would cover a down payment. However, this wouldn't really leave me much room to do significant renovations to the point of being able to quickly pull out capital. I suppose I could find something out there for less that needs more work but I'm afraid anything much less than 200k in or near Tampa area is a total tear-down kind of job, which I don't want to do from across the country for my first investment. Tampa won't really cashflow much it seems after looking at a lot of deals out there, but I imagine appreciation will be significant and consistent there. Also, in the right areas in Tampa it seems that a STR could be great, and my fiancé does have enough free time to cover the extra time-commitment a STR would require, that part wouldn't bother us.

VERY open to hearing suggestions on other markets or other options to make things work in one of these markets. Trying to absorb as much info as possible while I’m in the last couple months of saving up for this first purchase! Thanks in advance! 

 Hey Sean, I am a realtor in Greater Cincinnati and I have to say, 50-60k is normally what I recommend people have to start investing OOS here. Cincinnati and Northern Ky is an area known for cash flow, but I would say Northern Ky is more what you are looking for because you likely won't see cash flow as much, but growth here is better right now, from what I can see. Let me know if you want any other details about the area or myself!

[Preston Dean]

@Sean Haran

Come to Texas. 

Here we have

4plex for $540K rents for $4,400 total

Duplex for $300K rents for $2500 (2 miles from TCU)

Main House + Back House for $299K rents for $2,755(my listing)

Best of luck 

[Jeremy Holden]

Arizona ;)

[Vadim Iuras]

Hi Sean, Kansas City offers great opportunities in midwest, Good luck on your journey !

[Mike K.]

Quote from @Samuel Diouf:

There are some great opportunities in the Ohio markets. Many investors from California, are choosing to invest in the midwest because of the low barrier to entry and yearly cash returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus due to the same reason.

https://www.zillow.com/learn/hottest-housing-markets-2024/

Columbus, Ohio is a great market to consider if you're leaning towards appreciation. Multiple, billion dollar companies are investing heavy in our area, such as Intel, Google, and Amazon. Which will bring plenty of other investors and general business to the area. I moved here from Florida after seeing the projected growth.

 Stay out of Columbus.  Fixer property I bid on had 30 cash offers in 3 days.  Too many investors chasing too few properties. 

[Alfath Ahmed]

Quote from @Sean Haran:

Hello all! I'm an aspiring investor, and I'm living in Los Angeles so investing local is basically out of the question. Even a house hack is super tough in the city now. If I find one of course I'll jump on it but anything with an ADU or multiple units and in a decent area is generally significantly above the $1M mark here.

So now I’m stuck at the stage of choosing a market.

I have ~$60k saved up and set aside (separate from personal expense/emergency funds). I work a 1099 job selling solar, making anywhere from 10k-35k per month depending on the month. I know that $60k cash isn’t going to get me far investing out of state these days, I am planning on adding another 10-20k to that and going into something with 70-80k set aside for it. (Although if I can use less that’d be fantastic)  My fiancé (getting married this year) will also be able to qualify for Real estate professional status, which should hopefully help us with taxes.

I don’t really need cashflow in these first few years at least, I’m more than happy to keep working and using that income to build our portfolio. However, within 5 years or less I ideally would like to be able to at least cut back how many days per week I’m working, and start transitioning into doing real estate more, eventually full-time. 

My first option, which is what I'm leaning toward, is starting out with some BRRRR's in Detroit, as I could probably get in for 80k-ish and then hopefully get the majority of my money out. Recycle that money while continuing to save more to replenish it and keep BRRRR'ing until I have a nice chunk of equity. Then decide if I want to 1031 all of it into another market or whatever makes the most sense at that time. I really like the idea of pulling my capital back out and recycling it, which is why I like this option a ton.

Other option I'm thinking of is investing in a higher priced market with a potential for good appreciation. I have the ability to sell solar out in Florida and have done so in Tampa. You can still find houses around Tampa for like 200-250k, meaning my cash budget would cover a down payment. However, this wouldn't really leave me much room to do significant renovations to the point of being able to quickly pull out capital. I suppose I could find something out there for less that needs more work but I'm afraid anything much less than 200k in or near Tampa area is a total tear-down kind of job, which I don't want to do from across the country for my first investment. Tampa won't really cashflow much it seems after looking at a lot of deals out there, but I imagine appreciation will be significant and consistent there. Also, in the right areas in Tampa it seems that a STR could be great, and my fiancé does have enough free time to cover the extra time-commitment a STR would require, that part wouldn't bother us.

VERY open to hearing suggestions on other markets or other options to make things work in one of these markets. Trying to absorb as much info as possible while I’m in the last couple months of saving up for this first purchase! Thanks in advance! 

Hey Sean, I would check out the Columbus market. It has been booming for the past couple of years with strong job growth and population increase. I personally invest here for both the cash flow and appreciation. I recommend looking into areas near economic bases - close to Nationwide Children’s Hospital, Ohio State Campus, New Albany, etc.

Most of my clients purchase turnkey investment properties in areas like Old North, Merion Village, Southern Orchards, Old Towne East/King-Lincoln Bronzeville, Driving Park, North Linden, North Hilltop, Franklinton, Reynoldsburgh, and Hungarian Village.

My BRRRR and Fix & Flip Investors like to buy in areas like Eastmoor, Hilltop, Whitehall, and Linden. These areas have appreciated a ton and have seen a lot of growth.

[Dave Skow]

@Sean Haran- thanks ...if you havent already done this - make sure to get fully pre approved with a lender  in order to make sure you can qualify for the loan amt you think you will need .

[Regina Blake]

Hi, as an Ohio Realtor, I came by to tell you that Ohio is a great place to invest in real estate. Please feel free to contact me for any questions and all your real estate needs. Thanks!

Regina Blake-Ohio Realtor

[Michael Smythe]

@Sean Haran one of your challenges will be understanding and deciding on a Property Class to target BEFORE you pick a location (our opinion).

Let's say you decide to invest in Class B properties:
- Where can you find them?
- What are the average prices in these areas?
- How much property info can you find in these areas?
- Who can you find that you can trust in these areas?

PM us if you'd liked to discuss more about all this...

[Samuel Diouf]

Quote from @Mike K.:

Quote from @Samuel Diouf:

There are some great opportunities in the Ohio markets. Many investors from California, are choosing to invest in the midwest because of the low barrier to entry and yearly cash returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus due to the same reason.

https://www.zillow.com/learn/hottest-housing-markets-2024/

Columbus, Ohio is a great market to consider if you're leaning towards appreciation. Multiple, billion dollar companies are investing heavy in our area, such as Intel, Google, and Amazon. Which will bring plenty of other investors and general business to the area. I moved here from Florida after seeing the projected growth.

 Stay out of Columbus.  Fixer property I bid on had 30 cash offers in 3 days.  Too many investors chasing too few properties. 

 90% of the deals I work on are off-market and have no major competition.

[Mike K.]

Quote from @Samuel Diouf:

Quote from @Mike K.:

Quote from @Samuel Diouf:

There are some great opportunities in the Ohio markets. Many investors from California, are choosing to invest in the midwest because of the low barrier to entry and yearly cash returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus due to the same reason.

https://www.zillow.com/learn/hottest-housing-markets-2024/

Columbus, Ohio is a great market to consider if you're leaning towards appreciation. Multiple, billion dollar companies are investing heavy in our area, such as Intel, Google, and Amazon. Which will bring plenty of other investors and general business to the area. I moved here from Florida after seeing the projected growth.

 Stay out of Columbus.  Fixer property I bid on had 30 cash offers in 3 days.  Too many investors chasing too few properties. 

 90% of the deals I work on are off-market and have no major competition.

 Are 90% of them in Cleveland?

[Samuel Diouf]

Quote from @Mike K.:

Quote from @Samuel Diouf:

Quote from @Mike K.:

Quote from @Samuel Diouf:

There are some great opportunities in the Ohio markets. Many investors from California, are choosing to invest in the midwest because of the low barrier to entry and yearly cash returns making more sense in these lower priced markets. Ohio markets show up 3 times in Zillow’s 2024 hottest markets, with Columbus and Cincinnati taking the top 2 and 3 spots. I moved from Florida to start investing in Columbus due to the same reason.

https://www.zillow.com/learn/hottest-housing-markets-2024/

Columbus, Ohio is a great market to consider if you're leaning towards appreciation. Multiple, billion dollar companies are investing heavy in our area, such as Intel, Google, and Amazon. Which will bring plenty of other investors and general business to the area. I moved here from Florida after seeing the projected growth.

 Stay out of Columbus.  Fixer property I bid on had 30 cash offers in 3 days.  Too many investors chasing too few properties. 

 90% of the deals I work on are off-market and have no major competition.

 Are 90% of them in Cleveland?

In Columbus and Cincinnati 

[Becca F.]

@Sean Haran

I agree with the previous comments on trying to find a house hack or something within a 2 hour driving distance.

I did  a local renovation where I was on site at least once a week, did multiple walk throughs will plumber, electrician and the contractor. If my tenant has issues, I can be there in 30 minutes. 

I spent 6 months doing deal analysis and attempted several offers to BRRRR in Indianapolis and the ARVs weren't high enough to refinance of to pull money back out of. I wound up buying older renovated homes in 2023 in Class C areas and they continue to be major headaches with constant repairs and me losing money.

 Nicholas referenced my very long post about investing OOS.  Yes it's landlord friendly and affordable in the Midwest but you have to have a trusted team 2000 miles away. There are winter weather issues and so many things that come up from not being physically there 

The numbers someone gives you on a spreadsheet are ideal scenarios.  Talk to local investors (someone unbiased not trying to sell you anything) in the areas you're considering. I recommend Class A or B if you're going OOS. Good luck.

[Regina Blake]

Hi, congratulations this is great news! As an Ohio Realtor, I would definitely say Ohio is a great place to invest in real estate. If you have any question, please contact me. Thanks! 

Regina Blake-Ohio Realtor