Market Selection: Orlando, Arlington, Huntsville AL, or Ogden UT

[Casey Waters]

I am a new investor. My plan is to start by house hacking a fourplex, followed by purchasing a few more small multifamily properties (4-16 units) over the next few years in order to get the experience I need in order to become an apartment syndicator of much larger deals.

Most people in real estate seem to recommend investing where you live and work because familiarity with an area can provide a competitive advantage. Got it. Unfortunately, I neither live in nor am familiar with any city in which either the inventory of multifamily properties or the investment returns are sufficient. I don't want to start my investing career as a long distance investor, and since I work from home, I have the freedom to move my family anywhere in the country so as to optimize our chances of success in this business.

After much research, I have selected four cities that look promising: Orlando, FL, Arlington, TX, Huntsville, AL, and Ogden, UT. These all appear to be booming markets over both one and five year periods with good job, population, and rent growth, sufficient industry diversification, low vacancy, unemployment, and crime, favorable landlord/tenant laws, and potentially good cash flow and return on investment, provided a good deal can be found.

And that is the question: in which of these four cities do you think deals will be most available? I know they are all hot cities and we are near the top of a long climb in the market (in spite of this virus), but where will I potentially have the least competition from other investors. I plan to search for off market deals using several of the commonly discussed methods. If in your opinion, any of these markets would be poor choices, please elaborate. Thank you so much for your help.