Where to invest in the US

Question

Hi All, I am a newbie RE  investor and currently using /learning with a mentor to do my first RE investment. My budget is around 80-120K for my first investment and I have explored those markets below:

Cleveland	OH Columbus, OHRochester,  NY Jacksonville, FLIndianapolis, IN

All look like great markets to invest( Large cities, still affordable, growing, low unemployment rate, etc) however, I find it hard to pick one for start. I would love to get some advice from other members and from guys with experience with investing in those markets.

Thanks in advance, Omer

Clifton Young · Answer

Hey Omer, I am currently an investor in Ohio. Columbus Market is hot right now! Prices maybe a little over inflated, but it is a great market if you can find a deal. I'm in the Cleveland market right now. Housing prices have been pretty consistent overall. In the short term, may not appreciate as much as Columbus, but Cleveland has a great rental market.

James Wise · Answer

Welcome to the forums Omer. Saw Cleveland's on your short list so I figured you'd get some value out of reading The Ultimate Guide to Grading Cleveland Neighborhoods. In addition some of the other popular turnkey markets out there besides Cleveland are listed below. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets.Cincinnati, OhioDayton, OhioToledo, OhioYoungstown, OhioCincinnati, OhioMemphis, TennesseeBirmingham, AlabamaKansas City, MissouriSaint Louis, MissouriIndianapolis, IndianaDetroit, MichiganErie, PennsylvaniaLouisville, KentuckyMilwaukee, WisconsinJackson, Mississippi

Each of these markets is popular with turnkey investors because of the low barrier to entry, high rental demand & high rent to price ratio. I recommend setting up keyword alerts for each area as they are discussed in the forums daily with advertisements posted in the BiggerPockets marketplace hourly.One thing to note when looking at the individual markets, you can make or loose money in any market. Don't think that one particular out of state market will shoot you to success or abject failure. It's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Google Clayton Morris and/or Morris Invest for a cautionary tale of what not to do when buying turnkey real estateUnderstand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

Jess Archives · Answer

@Omer Zakai

I originally considered Ohio. Could still work. But ended up going with Kansas City.

I wanted the population growth to match national averages and had long term diversified economic growth. KC had that more.

I’m putting my money where my mouth is. I’m investing out of state (out of country actually) in this area.

Jonathan Greene · Answer

Look for someone who comments with an area outside of where they work. When you tell an entire site, full of investors and agents, that you have money to deploy somewhere in the United States, you are going to get biased opinions. That's not to say the comments are wrong, but they are slanted toward their market. If a market is hot and everyone knows it, why would you want to invest there? That's the best way to make less money and it's not even safe in many of the Midwest towns because they are not recession-proof, depending on what you want to do.

If I am going OOS to invest, I am going to try to avoid excessive weather either way. Extreme cold (Rochester) or extreme heat (Arizona). When you are OOS, weather is very important, even when you have PM in place. The questions begin for you in how are you going to build your team on the ground and who are you going to trust?

Any Midwest market is not strong. Finding a local team is not easy. Picking a market is important and it should be one that you want to visit so you can build on one and find more. No market in the U.S. is identical if you are really tracking it.

Zeke Liston · Answer

Columbus, OH is a great market @Omer Zakai but like @Clifton Young said, it may be a little tougher to find a deal then it would be in Clevland. This is not impossible though and when you do find a deal, the payout is worth it!

Remington Lyman · Answer

@Omer Zakai Leave it to me to make the decision for you. Columbus, Ohio

Caleb Brown · Answer

Any Midwest market is strong. Find a local team and run with it. Don't be stuck in picking a market. Most of the markets are identical.

Robert Ellis · Answer

Like some of the other posters have said, for that price you can get a good single family that's renovated or a duplex in columbus. SFRs are going to appreciate a lot more

Calvin Ozanick · Answer

Rock County, WI. Janesville and Beloit markets are seeing tremendous economic development and continued growth. Couple that with the reasonable pricing and rents coming out to 1.5-2% of the purchase price, you have a really good recipe for success. Best of luck on the search, I would be happy to share more information and show you the potential of your cash.

Where to invest in the US

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