One business town vs small satellite town with only commuters

[Keith Cox]

Hello. My market is much too hot to cash flow so I have been looking out of state in Ohio, Florida etc. I then realized that I have two markets near by that should meet the 1% rule.

First is 45 min from town with 800 residents and almost completely composed of people commuting in. The other is farther, 1.5 hour out and composed of almost entirely state jail employees. The second is a larger more established town with enough folks to support a Walmart and an ace hardware. The first is more like a small general store and a hair salon kind of town.

Just off of the surface which jumps out as a better market to enter?

My calculus is that in a market dip these satellite locations get absolutely hammered valuation wise and I worry rents would drop below cash flow.

The one industry town is not as subject to price run up from my frothy market so might stay good in a dip... unless of coarse the state shut the jail down or began furloughing workers.

I have decided I don’t yet have the balls or experience to brrrr in a location I can not drive to on the week end so am pretty limited on locations that meet the numbers.