Where are YOU investing? - Need help with choosing a market

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Where are YOU investing? - Need help with choosing a market

Henry Murray
Investor · Redondo Beach, CA · Member since 2018 · 56 posts · 38 votes

Hi BiggerPockets! 

So I live in Southern California and I've made the decision that my best course of action is to buy out of state where I can get a better rent/price ratio than around Long Beach (or SoCal in general). I recently read David Greene's book "Long Distance Real Estate Investing" and it has a wealth of knowledge, but I've never bought property before and since I'm going to start outside of California I feel like I have too many choices of markets around the US. I'm looking for a relatively cheaper (<100k, or ideally <80k) move in ready or turnkey SFR or duplex in a market with good rent/price ratios and also where jobs are being created & people are moving to but I care more about cash flow than appreciation potential for now.

So my question is: Where are you investing right now?  What sort of rent/price ratio is typical where you're investing?  Are jobs being created and are people moving there? 

And then if you're investing outside of your home market, How did you pick your market? Word of mouth from other investors? US census data by zip code?? Zillow Research Data? 

Any information/tips you can share is much appreciated! 


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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
@Henry Murray I’m in Cleveland and Memphis. If you want multifamily go to Cleveland. If you are okay with single family Memphis is a good bet. I can find 50-60k houses that rent for 800-900 in Memphis all day long. B areas for Memphis. It’s worth noting though that B in Memphis May be different then CA.
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  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    @Henry Murray I’m in Cleveland and Memphis. If you want multifamily go to Cleveland. If you are okay with single family Memphis is a good bet. I can find 50-60k houses that rent for 800-900 in Memphis all day long. B areas for Memphis. It’s worth noting though that B in Memphis May be different then CA.
    7Reply
  • Henry Murray
    OP
    Investor · Redondo Beach, CA · Member since 2018 · 56 posts · 38 votes
    8y

    Oh wow awesome! That's a much better ratio than I've seen in the SoCal area! Thanks for the tip @Caleb Heimsoth!

    Since it looks like you're from North Carolina, I was curious, how did you originally decide to invest in Cleveland and Memphis?  

    1Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y

    @Henry Murray I live in an expensive market.  When I started I lived in another expensive market (DFW).  Same reason people in CA invest elsewhere 

    1Reply
  • Henry Murray
    OP
    Investor · Redondo Beach, CA · Member since 2018 · 56 posts · 38 votes
    8y

    @Caleb Heimsoth Sorry, I don't think I phrased that well...  What I meant was how did you decide on those markets in particular when you were looking outside the expensive area you were living in?

    1Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y

    most of these markets are similar.  I found a couple that compliment each other and went with it.  There wasn’t a lot of rhyme or reason to it. Look at population tends, economic data and how many renters etc 

    2Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    8y
    @Henry Murray also in so cal. Invest in houston. Best of luck!
    2Reply
  • Henry Murray
    OP
    Investor · Redondo Beach, CA · Member since 2018 · 56 posts · 38 votes
    8y
    @Cody L. Thanks for the tip! How long have you been in the Huston market and what made you choose Huston specifically out of all the cities across the US?
    0Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    8y
    Originally posted by @Henry Murray:
    @Cody L. Thanks for the tip! How long have you been in the Huston market and what made you choose Huston specifically out of all the cities across the US?

     I was going there a lot for work.  When I was looking for a townhome to buy to stay in when there, I found two I liked. Reator told me if I bought both, she could rent out the second for a profit.  Lightbulb moment that I could buy and make money renting.  Started looking for others.  Moved to multifmaily.  Got to know the submarket well.  Stayed buying in Houston as that's where I built up a large team and know all the submarkets, what prices should be, who the players are, etc.  Never felt it was worth trying to replicate that elsewhere given there was always more deals in Houston for me.  However, now that the deals have dried up I was going to look elsewhere.  But decided against it (again) due to the fact it's dried up in Houston due to the fact mutlifamily is just dried up everywhere at the moment. 

    1Reply
  • Henry Murray
    OP
    Investor · Redondo Beach, CA · Member since 2018 · 56 posts · 38 votes
    8y

    Awesome! Thanks for sharing your story of how you got started in Houston @Cody L.!

    0Reply
  • Harrison Melton
    Seattle, WA · Member since 2018 · 18 posts · 4 votes
    8y

    Hi, @Henry Murray! I live in Seattle, and am in a similar situation to you. I also recently read David Greene's book, and would love to start purchase rental properties in the Midwest or South, where prices allow for the 1% rule to hold. I'd love to connect and share ideas about what markets might be good for first-time investors!

    0Reply
  • Benny Gelbendorf
    Holon, Israel · Member since 2018 · 86 posts · 14 votes
    8y
    Originally posted by @Caleb Heimsoth:

    most of these markets are similar.  I found a couple that compliment each other and went with it.  There wasn’t a lot of rhyme or reason to it. Look at population tends, economic data and how many renters etc 

    Hi Caleb, you have mentioned you are investing in Memphis and Cleveland (very popular investors areas) by following the numbers (pop. growth, economic data), but I have some concern with those. First population growth is negative in both cities, as too higher crime rate in comparison to OH and TN states. Could it be that when you started those numbers made sense but do not anymore ?

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y

    I've seen a couple of you guys talking about the Cleveland market. Figured I'd drop a link to The Ultimate Guide to Grading Cleveland Neighborhoods here for those of you researching that market. 53,000+ views on that thing, seems to be a fan favorite here on bigger pockets.

    2Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    Originally posted by @Benny Gelbendorf:
    Originally posted by @Caleb Heimsoth:

    most of these markets are similar.  I found a couple that compliment each other and went with it.  There wasn’t a lot of rhyme or reason to it. Look at population tends, economic data and how many renters etc 

    Hi Caleb, you have mentioned you are investing in Memphis and Cleveland (very popular investors areas) by following the numbers (pop. growth, economic data), but I have some concern with those. First population growth is negative in both cities, as too higher crime rate in comparison to OH and TN states. Could it be that when you started those numbers made sense but do not anymore ?

    Not sure what you’re looking at but I see Memphis population increasing, just very slowly.  Cleveland is dropping, but again slowly.  I’m fine with either.  Any place with reallt strong population growth will be an appreciation market anyways.

    As far as crime goes, I just look at the areas I buy in.  Every city has bad areas.  Memphis and Cleveland aren’t any different 

    2Reply
  • Sam Wilson
    Investor · Memphis, TN · Member since 2016 · 279 posts · 257 votes
    8y

    @Harrison Melton -  We are Memphis investors and will be in Seattle next week.  I'll send you some info if you are interested in talking about the local market and/or have questions we could help answer.  

    2Reply
  • AJ Singh
    Rental Property Investor · Orange County, CA · Member since 2016 · 512 posts · 374 votes
    8y

    @Henry Murray

    I live in seal beach and invest in memphis and inland empire locally

    3Reply
  • Henry Murray
    OP
    Investor · Redondo Beach, CA · Member since 2018 · 56 posts · 38 votes
    8y
    Originally posted by @AJ Singh:

    @Henry Murray

    I live in seal beach and invest in memphis and inland empire locally

     Awesome, thanks for sharing @AJ Singh! Where in the IE do you invest? I'm not originally from the SoCal area so I'm not very familiar with a lot of the cities and the markets around this area yet.  

    0Reply
  • Yong ParkPro Member
    Investor · Seal Beach, CA · Member since 2017 · 47 posts · 25 votes
    8y

    I live in Seal Beach too and I invest ( rather am trying to invest) in Chicago.

    1Reply
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