What areas do you like?

Question

I am an out of state investor.  Just bought a couple investment properties in Memphis.  One rented, waiting on the second.
                              
                              What are some other good relatively stable and preferably cash flowing areas to invest right now.  Dallas?  Atlanta? Paris? Athens? Mogadishu (prob some cheap deals there!)?
                    
                    And please, I am not looking to be solicited.  Just looking for honest opinions from other investors.

Thanks

Joseph M. · Answer

I saw this article on msn today which I thought had a pretty funny title.

"You can buy a home for under $150,000"

http://realestate.msn.com/article.aspx?cp-documentid=21364704&GT1=35000

It's clearly targeted towards owner occupants but still.

How about the top places where you can find homes under $50,000..now that would be more interesting.

It's not that hard to find a home under $150k these days.

I'm thinking most of these writers are from NYC or other high rent metros, so they are impressed with places under 150k.

Also thought it was funny that the article from Forbes referenced above starts out with "The days of flipping houses for profit are over.."

When people on this board appear to be making their living flipping homes!

And the example that they use of a guy that is making a decent return in the rental business...fails by the 2% rule!...

$127,000 purchase price , with a rent of $1150 a month!

That is nowhere near a good deal...

How come these article writers never write about the kind of deals that really cash flow?... I guess they are just clueless.

Wow.

George Roberts · Answer

I like Florida as a longer hold. A lot of people have now left the state.

Tony Tomasek · Answer

Check out Indianapolis for a cash flow market

Sean Schellenger · Answer

There are many great areas to invest in all over the country right now.

If you are looking for maximum cashflows however, I suggest looking into student housing.  Many colleges have old run down housing that will rent for top dollar once updated.

I am currently in philadelphia focusing on Temple University's Medical School area in the North section of the city.  Philadelphia also presents great opportunities to flip in the south(more specifically, point breeze and the graduate hospital area).  Check it out!

Joseph M. · Answer

True, people are focused on price. But as far as single family homes go, it doesn't seem that you can typically cash flow on a 300,000 house.

As the price of a single family home goes up the rental rate seems to go down (percentage wise).

I am wondering why you would just want to break even in this market, if there are plenty of deals that will cash flow today?

Ted Harris · Answer

You might find this interesting ... from Forbes magazine:
          
          High-Rent Districts
          
          Owning residential rental property is a tough way to make a buck. In these cities landlords earn some of the best returns for their trouble. 
          
          City, State              Avg CAP Rate   Avg Price ($thou)
          
          Baltimore, MD                 9.3%               $120 
          Las Vegas, NV                8.9                    100 
          North Las Vegas, NV       8.8                    113 
          St. Louis, MO                  8.8                     78 
          Phoenix, AZ                    8.8                      81
          Indianapolis, IN                8.7                      92 
          Atlanta, GA                     8.7                     120 
          Hollywood, FL                 8.6                     137 
          West Palm Beach, FL      8.6                     120 
          St. Petersburg, FL           8.6                      104 
          
          *Operating income from a property (annual rent minus upkeep, insurance and 
          management costs) divided by sale price. Sources: InvestorLoft. 
          
          complete Forbes article here:
          http://www.forbes.com/forbes/2009/0803/real-estate-rent-property-landlord-game.html

Ted Harris · Answer

Have you checked out Phoenix?  Another warm place that's been hit hard and could eventually have a nice rebound ... I think it offers a place where both working and retired folk like to reside so increased population.  I think there are a lot of homes less than 3 yrs old you can make cashflow which helps as well.

Joseph M. · Answer

Yeah that is the frustrating part. You hear about all these REO properties on the market. But to actually get an accepted offer on one is very difficult in a competitive market. I guess you have to just make several offers. It becomes more difficult when agents price homes significantly below the 'market price' in order to incite a bidding war of sorts.

Lisa Prieto · Answer

Tom - I live in Central Florida - Orlando area...the market is decent - not as bad as south FL where it's inundated with inventory...the good houses are moving. I have one investment property here that I rent out. I would say it may be a good spot b/c of the college and some movement to bring in more industry and jobs. Also the hurricane insurance isn't as bad as the other parts of the state and our taxes are fairly low also. Just beware closing costs and FL are high..

Good luck and feel free to ask me about any areas...

-Lisa Prieto

John Smith · Answer

mogadisu is a bad choice I think.so much risk in it.dallas is a nice place to invest in.you can a get high profit from there. I had invested there a year ago and got some real good profit.

What areas do you like?

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