Which state to consider next for OOS investing?

[Anshul Pandey]

I started last year and I have 5 units in Phoenix area and couple of primary (bought in 2014) and secondary home (bought in 2021) in Seattle which is where I am based. Phoenix is getting more and more expensive and numbers aren't working very well there anymore. 

What state should I consider and explore? 

Investment goal: 50 Units by 2025 

Primary goal: Cash flow

Looking for about ~200 per door. 

Any pointers would be super helpful. 

[Lee Ripma]

@Anshul Pandey

What about an analytical way to pick an out of state market? You’re really looking for B class areas in the path of progress. So is there a way to find those? Yes, I did this analysis for you so that you don’t need to spend the time trying to research areas. Briefly here is that methodology and the list. Feel free to DM me for a link to the complete article.

Filter for MSAs that have 150k plus people and are within 50 miles of a major airport (1M or more flights per year). 

Only look at zip codes that have a least 3k housing units (target rich environment) and a median home value of 100-250k. Rank by number of housing units that meet those criteria.

Here is the list by housing units. 

1. Houston, TX
2. San Antonio, TX
3. Las Vegas, NV
4. Philadelphia, PA
5. Indianapolis, IN
6. Jacksonville, FL
7. Phoenix, AZ
8. Tucson, AZ
9. Orlando, FL
10. Fort Worth, TX
11. Charlotte, NC
12. Minneapolis, MN
13. Columbus, OH
14. Miami, FL
15. Louisville, KY
16. Dallas, TX
17. Kansas City, MO
18. Oklahoma City, OK
19. Omaha, NE
20. Albuquerque, NM

Why not pick a few areas off this list and then find submarkets that work for you? That is what I did… I invest in Kansas City and it's a great market. 

Having a great PM and a great agent is key! I know you can be successful in any of these markets, so get going!