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Updated over 5 years ago on . Most recent reply

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Jessey Kwong
  • Investor
  • Vancouver
9
Votes |
44
Posts

How to decide on a OOS property to invest in?

Jessey Kwong
  • Investor
  • Vancouver
Posted

Since I'm looking across the border (from Canada) into the USA, I will need to invest in a city that I have not much information on (at least not yet). Planning on a Buy and Hold.  But how does one decide on what city/state to invest in?

What factors must I consider before focusing on a city/region?

Given - I don't have much of a network (at least not yet).

Most Popular Reply

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151
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117
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Hank Keller
  • Rental Property Investor
  • Mansfield, OH
117
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151
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Hank Keller
  • Rental Property Investor
  • Mansfield, OH
Replied

@Jessey Kwong - Here's what I've learned about market research:

Four things to look for in a market

1- Population over a million and good growth rate. This ensures that there are plenty of available houses (with an approximate 3% foreclosure rate, there are about 3000 houses at auction each month), renters to choose from and that the city is growing rather than stagnate or losing population. Good markets didn't drop during the 2008 crash...

2- Cheap Houses. Make sure you get at least the 1% rule meaning $1000 of rent for each $100k of purchase. This should also ensure youre getting about 8% return on your money.

3- Business Friendly and Credit worthy State. Look at how easy it is to set up an LLC, the costs of maintaining the business and the cost and timing of evicting a tenant. Also look for states, cities and municipalities that have a good credit rating which ensures that they will be pouring money into revitalization which increases jobs, growth, appreciation and rents. it also ensures that taxes won't go up in the event that a city starts going bankrupt. (http://www.zerohedge.com/news/2017-10-05/these-two-charts-depict-which-cities-will-file-bankruptcy-next

4- Jobs. Look for cities where there is a good mix of manufacturing, warehousing and overall good job market with low unemployment.

Hope this helps!

Hank

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