What are attractive markets to invest in right now?

Question

I live in California, everything is expensive here. Looking to invest outside of CA and perhaps in southwest, Texas, AZ, NM, what are some good markets right now and why do you like them?

Coco Cook · Answer

@Kevin Reinell

I'm going to look at Las Vegas, Austin and Phoenix. We're in Columbus, OH right now and it's been a great market work good appreciation with affordable prices, especially for A Californian.

James Wise · Answer

Hey Kevin welcome to the site. This a super popular question among investors living in California. Many people are in the same boat as you and most of them turn to what we call the turnkey markets. There are tons of turnkey markets out there. Many of these markets are very well represented by sellers & turnkey operators here on BiggerPockets. In no particular order I have listed some of the most popular markets for out of state investors

• Cleveland, Ohio
• Dayton, Ohio
• Toledo, Ohio
• Youngstown, Ohio
• Cincinnati, Ohio
• Memphis, Tennessee
• Birmingham, Alabama
• Kansas City, Missouri
• Saint Louis, Missouri
• Indianapolis, Indiana
• Detroit, Michigan
• Erie, Pennsylvania
• Louisville, Kentucky
• Milwaukee, Wisconsin
• Jackson, 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.
• Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

Evan Brookman · Answer

I'm going to look into Seattle and Phoenix. My friend told me that Phoenix is a hot spot now.

Kevin Reinell · Answer

@James Wise

Thanks for the tips, I will keep these in mind as well as the markets you mentioned as I look for out of state opportunities.

Account Closed · Answer

@Kevin Reinell - We've been active in Cleveland for several years, one of our best markets.

Sean Mcintire · Answer

Jeff S. is right. I live in Arcadia lite and have since 2007.  Do not invest here in Phoenix, way way way way better CF out of the rust belt in NON I  REPEAT NON-WAR ZONE areas.

You will notice that the only positive (hyped up in other words) advice on this post are people in support of YOU investing in the valley are people with a vested interested in getting your $$$.  just stating a fact.

Jeff Schneider · Answer

You will have a hard time getting close to the 1% rule in most areas in Phoenix or Scottsdale. The least expensive house in Scottsdale right now is less than 1200sf, needs work to make it cute and is almost 300k, you would be lucky to pull $1700-$1800/month out of it.

Melanie Johnston · Answer

@Kevin Reinell

Here are 2 good options to get you started so that you can run your numbers:

https://www.brewerstrattonpm.com/

https://www.eandgrealestate.com/owner/management-services/

I can provide more if you need them. Happy to provide any support I can to help you pursue your investing goals!

Melanie

Kevin Reinell · Answer

@Melanie Johnston

Thanks for the recommendations, I have seen the data on the rising rental rates and have visited PHX/Scottsdale recently and quality of life is good. I do like the fact that it’s close to CA so easy to visit. Do you have any property management contacts I should look into?