Rental Property Investor · Pasadena, CA · Member since 2013 · 22 posts · 1 vote
I live in Los Angeles and feel like I don't know where to find good investment properties (I'm interested in buy and hold). I've used the rental property calculator, but not sure where to look. How do you even decide? Just keep running the numbers? Areas I know well are Portland, Oregon, San Diego and Pasadena - pretty much all places that are very expensive...
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
11y
Hey Colleen! The best way is usually just asking around, checking out the forums...you'll start seeing where people are buying. Unfortunately you won't hear much for LA for cash flow buy and holds, because cash flow is next to impossible to obtain here. Some folks have drifted towards Bakersfield for it, some Inland Empire (all still debatable for cash flow), and others out-of-state. I live in Venice Beach and I have always bought out-of-state. All just depends on what you are looking for.
I live in San Diego and although I do have a rental property here, and one in Phoenix, I recently decided to search the country for the "ideal" rental home market. I looked at Florida, Birmingham AL, Detroit, Chicago, Philly and several other areas. My goal was to try to find a working class area and stay away from the "war zones." I also took into consideration the property tax rates and the landlord/tenant laws. Ease of travel was my final criteria as I figured I would need to go check up on my places from time to time.
I did a lot of recon using Bigger Pockets and that led me to some turnkey companies in many of these locations. Unless you have someone local that you can trust to get the rehab work done, you are likely to want to go the turnkey route, with a Tenant already in place and paying rent. You pay a bit more for these deals, but managing a rehab long distance can drive you crazy. I did that in Phoenix, and it was very hectic. You may be able to work out a deal with a turnkey operator to get a better deal by purchasing the homes yourself, and then paying for the work plus a fee to the operator for handling the coordination. Paying the fee does make me cringe a little, but I have some really great deals, about a 2% gross rental return monthly, and a fair amount of paper equity from the deals I have done so far. My partner is great and we have also done a couple of flip deals to boost our respective rental housing funds.
I closed my first 2 deals in Fall, and purchased 4 more so far this year. I'm heading to my market tomorrow to go to an unpaid property taxes sale and then the Sherriff's foreclosure sale as well. Hopefully I will come home with 2 or 3 good new deals. Next on the list is to get a blanket loan to get my cash back and then try to do it all again. I'm having a blast getting a bigger and bigger rent check every couple of months or so.
Real Estate Agent · New York, NY · Member since 2015 · 31 posts · 13 votes
11y
I live in New York. I normally focus on B areas with positive cashflow. What i meant by B areas are where the location has an average income close to the median income in your specific State. As a novice investor, i highly recommend to obtain positive cashflow to minimize your financial burden.
were you trying to hide and not name the market you ultimately decided to invest in, or were you implying that you are investing in all the markets you named (Florida, Alabama, Detroit, etc)?
Realtor · Omaha, NE · Member since 2011 · 110 posts · 25 votes
11y
You can invest anywhere. I like to invest in dense parts of a city population where there is big business/universities/malls etc.. you can always find a good renter.
Rental Property Investor · Woodbridge, VA · Member since 2014 · 249 posts · 81 votes
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The obvious answer is look at the financials. Also stated was a reference to The One Thing (great read). My wife and I look at where we live and where we have support systems in place. For example, we invest with my parents in upstate NY, we travel there several times a year and housing is cheaper than in the DC area. So for us - upstate NY makes sense even though the taxes are higher. We also hold property in Las Vegas and since we have a network of maintenance people and family out there, it again makes sense for us.
Bridgeville, PA · Member since 2013 · 395 posts · 105 votes
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While like @Josh Caldwell I am also in Pittsburgh a nice buy and hold market, if you look hard enough you will find good deals within a short drive from just about anywhere.
If you want to learn more about the Pittsburgh market feel free to reach out to me I would love to help.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
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You can do great in all the cities mentioned or a whole host of others. Perhaps check locally first as there are still pockets in East LA that have yet to be gentrified and will reward buy and holders handsomely. The far away other stuff will always be around. Good luck with your search!
Investor · Orlando, FL · Member since 2013 · 99 posts · 69 votes
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@Colleen Pelliccia lavin I'm out here in Orlando, so I don't know much about your individual area. However a good investment is determined based on your individual investment goals and tolerance for risk. First you should determine your budget per property and then do some research to see what you can afford with your specific budget in those areas. Based on what you can afford, determine which areas offer the best rental returns, show the best equity growth trends, and provide a variety of exit strategies should you want to liquidate in the future. Keep in mind that higher returns typically equate to higher risk areas. For example in Orlando we have lower income areas in the West side that are typically considered higher risk, but give high returns. You can pick up a property for $50k that can bring in $950 monthly in rental income, but the equity will not grow considerably over time as these are lower income neighborhoods. Then there are areas like East Orlando that have been showing a 10% growth in equity from year to year, but homes are purchased above $100k and bring in about $1,200 in rental income monthly. It's just a matter of your comfort level and investment strategy once you have all of the numbers in front of you. Hopefully this helps...either way keep us posted on your progress and utilize all the resources here on bigger pockets in you research!
Investor · Encinitas, CA · Member since 2013 · 116 posts · 48 votes
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I'm going to Chicago, but my properties are in NW Indiana. Better taxes, better landlord laws and still a suburb of the third largest city in the USA. 40 minute drive to downtown, or you can ride the commuter train.
Residential Mortgage Specialist · Dallas, TX · Member since 2014 · 18 posts · 3 votes
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I moved from Austin TX late last year and home prices are blowing up. It's a bit cut-throat out there to try and actually get a contract accepted because most homes are going for 10k to 20k above asking. If you can get into a house though, especially in South Austin, it would be ideal. Also the areas bordering Austin (Round Rock, Pflugerville, Cedar Park) are experiencing growth that isn't as aggressive as Austin. One of my co-workers's house in Round Rock increased in value from 187k to 205k in one year on a 3/2/2 that was 1400 sqft. She made no improvements and barely even made it ready to sell. 18k appreciation a year isn't going to set any records but it's a great way to start off. Good luck and let me know if you do decide to go that route. Good luck!
Real Estate Investor · Austin, TX · Member since 2014 · 21 posts · 24 votes
11y
My best advice: Stop deciding. Start doing.
There's a book or four out there somewhere that goes into great detail on the topic, but that's the summary of the back cover of the Cliff Notes version, and it's really what it all boils down to.
There's a book or four out there somewhere that goes into great detail on the topic, but that's the summary of the back cover of the Cliff Notes version, and it's really what it all boils down to.