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Updated 2 months ago, 09/20/2024
Starting Out - How to Narrow in on a Decent Market
Hello!
We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list).
What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market.
Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.
Neighbourhood: Class B or C+ neighbourhood.
Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job.
Any input, advice would be greatly appreciated!
TIA :)
@Natasha Rooney
Columbus, OH would be a good fit for a long term buy and hold with enough cash to pay for itself and have a little left over every year to reinvest. Solid business and population growth to support long term appreciation.
Happy to happy!
- Evan Hopple
- [email protected]
- 614-924-8151
The five most landlord-friendly states are:
- West Virginia
- Arkansas
- Louisiana
- North Carolina
- Alabama
Alabama
Alabama residents enjoy a low cost of living and a thriving economy. The state’s housing is also ranked as the fourth most affordable in the country.
Alabama currently has the second-lowest average property tax rate in the country at 0.4%, which helps investors keep more of the money they earn.
- Greg Parker
- [email protected]
#2 Out of State Investing Contributor
- Real Estate Agent
- Columbus, OH
- 6,377
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- 5,419
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#2 Out of State Investing Contributor
- Real Estate Agent
- Columbus, OH
Quote from @Natasha Rooney:
Hello!
We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list).
What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market.
Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.
Neighbourhood: Class B or C+ neighbourhood.
Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job.
Any input, advice would be greatly appreciated!
TIA :)
It doesn't matter where you invest, as long as you can assemble a great team. Finding a trustworthy lender, realtor, contractor, and property manager is key. I was able to do that here in Ohio.
- Remington Lyman
@Natasha Rooney How would having a map overview of a market, showing the average Property Class of each suburban city and urban Neighborhood help you with your decision?
- Michael Smythe
What's up @Natasha Rooney! What market are you currently in, and why no interest?
The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.
Outside of just a good community, I love Chicago because:
1. In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points
2. In the south suburbs, there are tons of great single-family cosmetic flips
We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.
With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.
- Jonathan Klemm
- [email protected]
Hi Natasha, these areas in Columbus—North Linden, South of Main, Vassor Village, Woodland Park, MT Vernon, Milo-Grogan, Franklinton, Merrion Village, Hungarian Village, Southern Orchards, Driving Park, Olde Towne East, Franklin Park, King Lincoln, Old Oaks, and Livingston Park—are prime spots for quick gentrification and great long-term buy and holds. Let me know how I can help!
- Min Zhang
- [email protected]
- (614) 412-2912
Quote from @Greg Parker:
The five most landlord-friendly states are:
- West Virginia
- Arkansas
- Louisiana
- North Carolina
- Alabama
Alabama
Alabama residents enjoy a low cost of living and a thriving economy. The state’s housing is also ranked as the fourth most affordable in the country.
Alabama currently has the second-lowest average property tax rate in the country at 0.4%, which helps investors keep more of the money they earn.
Thank you! I will take a better look at Alabama for sure :) Any particular city that you suggest?
Quote from @Michael Smythe:
@Natasha Rooney How would having a map overview of a market, showing the average Property Class of each suburban city and urban Neighborhood help you with your decision?
That would be quite helpful!!
#2 Out of State Investing Contributor
- Flipper/Rehabber
- Pittsburgh
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#2 Out of State Investing Contributor
- Flipper/Rehabber
- Pittsburgh
@Natasha Rooney@Natasha Rooney
just to be blunt:
1. OOS investing is much more difficult than advertised. there are numerous recent threads on BP by folks who bought something because it looked nice, or an agent recommended it, and they didn't see it themselves and approach it with any skepticism. they immediately got crushed. examples:
Baltimore - a path to never-ending pain (biggerpockets.com)
Experience of OOS investing in Cleveland after 1.5 years. (biggerpockets.com)
so, if you're serious about a market - you need to go there in person. if you're not willing to do that, then don't invest there.
2. you're not going to cash flow in the first few years, in any market, period. not in Alabama, not in California. think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes. where is the cash flow? i say this not to discourage you from investing, but to help set your expectations properly.
my recommendation is always to invest wherever you can be hands-on and in-person. if your immediate market is too expensive, go a couple hours away.
hope this helps
Quote from @Jonathan Klemm:
What's up @Natasha Rooney! What market are you currently in, and why no interest?
The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.
Outside of just a good community, I love Chicago because:
1. In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points
2. In the south suburbs, there are tons of great single-family cosmetic flips
We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.
With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.
Hello, thanks for the comment on my post!
I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts.
Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first.
Do you mainly do business in Chicago then?
Quote from @Nicholas L.:
@Natasha Rooney@Natasha Rooney
just to be blunt:
1. OOS investing is much more difficult than advertised. there are numerous recent threads on BP by folks who bought something because it looked nice, or an agent recommended it, and they didn't see it themselves and approach it with any skepticism. they immediately got crushed. examples:
Baltimore - a path to never-ending pain (biggerpockets.com)
Experience of OOS investing in Cleveland after 1.5 years. (biggerpockets.com)
so, if you're serious about a market - you need to go there in person. if you're not willing to do that, then don't invest there.
2. you're not going to cash flow in the first few years, in any market, period. not in Alabama, not in California. think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes. where is the cash flow? i say this not to discourage you from investing, but to help set your expectations properly.
my recommendation is always to invest wherever you can be hands-on and in-person. if your immediate market is too expensive, go a couple hours away.
hope this helps
Thanks for the message! We plan to 100% travel to the area that we are going to be purchasing before making a purchase to meet people, network, and hopefully build a solid team.
My immediate market is far too expensive to invest in unfortunately - as well as anywhere within 2 hours. I am located in Western Canada (previously was in Toronto) and its just wild at the moment. So for us, Cross border investing may be what turns out to be the better option. Ideally, investing locally would totally be something we'd prefer to do. However, its not quite possible in today's market. We do own our primary residence but as far as investments go, this is not the place at the moment.
Quote from @Natasha Rooney:
Quote from @Jonathan Klemm:
What's up @Natasha Rooney! What market are you currently in, and why no interest?
The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.
Outside of just a good community, I love Chicago because:
1. In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points
2. In the south suburbs, there are tons of great single-family cosmetic flips
We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.
With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.
Hello, thanks for the comment on my post!
I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts.
Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first.
Do you mainly do business in Chicago then?
I am not sure where you are looking but I live in Calgary and I've been finding cash-flowing properties for over 10 years
Quote from @Natasha Rooney:
Quote from @Michael Smythe:
@Natasha Rooney How would having a map overview of a market, showing the average Property Class of each suburban city and urban Neighborhood help you with your decision?
That would be quite helpful!!
Then you may want to check out our website:)
- Michael Smythe
Quote from @Nicholas L.:
@Natasha Rooney@Natasha Rooney
just to be blunt:
1. OOS investing is much more difficult than advertised. there are numerous recent threads on BP by folks who bought something because it looked nice, or an agent recommended it, and they didn't see it themselves and approach it with any skepticism. they immediately got crushed. examples:
Baltimore - a path to never-ending pain (biggerpockets.com)
Experience of OOS investing in Cleveland after 1.5 years. (biggerpockets.com)
so, if you're serious about a market - you need to go there in person. if you're not willing to do that, then don't invest there.
2. you're not going to cash flow in the first few years, in any market, period. not in Alabama, not in California. think about a down payment, closing costs, light repairs, rent ready costs, commission to the property management company, then you fix a dishwasher, then in year 2 the furnace goes. where is the cash flow? i say this not to discourage you from investing, but to help set your expectations properly.
my recommendation is always to invest wherever you can be hands-on and in-person. if your immediate market is too expensive, go a couple hours away.
hope this helps
Most of this can be traced back to the investor thinking they could get Class A results when buying a Class C property.
We deal with it ALL the time:(
- Michael Smythe
#4 Multi-Family and Apartment Investing Contributor
- Investor
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#4 Multi-Family and Apartment Investing Contributor
- Investor
Do this diligence yourself.
You're just asking agents from their respective cities to chime in on why they're the best. This is doing you no favors, and an absolute wrong way to approach it.
Get an idea of what you're seeking, then research those cities yourself.
Hi @Natasha Rooney - You are most welcome!
That makes sense regarding the Canadian market. I lived in Toronto for a couple of years, and the real estate there is quite funky.
Making the trip and meeting people in person will be worth its weight in gold...GREAT CALL on that.
We work solely in Chicago as a general contractor...for now. We have big plans, but we need to have our business running like clockwork before considering branching out. Which is not easy in the renovation space, but that's why I love it!
- Jonathan Klemm
- [email protected]
Quote from @Anthony Therrien-Bernard:
Quote from @Natasha Rooney:
Quote from @Jonathan Klemm:
What's up @Natasha Rooney! What market are you currently in, and why no interest?
The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.
Outside of just a good community, I love Chicago because:
1. In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points
2. In the south suburbs, there are tons of great single-family cosmetic flips
We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.
With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.
Hello, thanks for the comment on my post!
I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts.
Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first.
Do you mainly do business in Chicago then?
I am not sure where you are looking but I live in Calgary and I've been finding cash-flowing properties for over 10 years
Really?! We are in Calgary as well haha I'd love to meet up and chat sometime over zoom or in person!
Quote from @Natasha Rooney:
Quote from @Anthony Therrien-Bernard:
Quote from @Natasha Rooney:
Quote from @Jonathan Klemm:
What's up @Natasha Rooney! What market are you currently in, and why no interest?
The main thing I am looking for in a market is the right team! Someone is making good money in every market. I am a biased fan of Chicago, Illinois, because of the awesome real estate community here.
Outside of just a good community, I love Chicago because:
1. In the city, there is a plethora of old multi-family properties that need to be renovated at all different price points
2. In the south suburbs, there are tons of great single-family cosmetic flips
We do have winter, high taxes, and crime, but like anything else there is pros & cons to everything.
With the right team, you can be successful in any market...focus on networking and figure out where you might have a competitive advantage with some boots on the ground.
Hello, thanks for the comment on my post!
I have pretty much zero interest in the market I am currently in - its WILD haha Canadian housing has no potential to provide positive cash flow. I am currently in Calgary, AB and used to be located in Toronto - real estate in Canada is nuts.
Sounds good! Yes, I think a good team is crucial to being successful in any market and you're right - people are making money in every market. I think we may focus on somewhere in the midwest and plan to make trips out when purchasing and to meet people and network first.
Do you mainly do business in Chicago then?
I am not sure where you are looking but I live in Calgary and I've been finding cash-flowing properties for over 10 years
Really?! We are in Calgary as well haha I'd love to meet up and chat sometime over zoom or in person!
Hi Natasha,
I am in Calgary and have been investing here in Alberta for about 5 years and I am, also, going south to expand my business.
Let me know if you would like to connect to chat about it.
Quote from @Marcondes Franco Da Silva:
Hi Natasha,
I am in Calgary and have been investing here in Alberta for about 5 years and I am, also, going south to expand my business.
Let me know if you would like to connect to chat about it.
#3 House Hacking Contributor
- Real Estate Agent
- Los Angeles, CA
There are couple of things to think about:
1. Be careful when you post questions like this. This is when the Realtors come out and say their market is best.
2. You can make it work in almost any market. I could make a strong argument for both Birmingham Alabama and Los Angeles California.
3. House Hacking is a great way to get into investing. By house hacking my first condo, I've been able to scale to now 14 rental doors between four different states.
4. I do look at the population, rental laws, rental laws, and major businesses/organizations (hospitals, universities, big business, etc.)
Quote from @Natasha Rooney:
Hello!
We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list).
What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market.
Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.
Neighbourhood: Class B or C+ neighbourhood.
Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job.
Any input, advice would be greatly appreciated!
TIA :)
You can have a great plan but if you can't properly execute it, it won't work. Focus on the area you can best manage properties in an area that also makes sense from an investment point. Don't worry about all the other details. There are mega-successful investors in every market even the ones that are not landlord friendly.
- Tim Swierczek
Quote from @Natasha Rooney:
Hello!
We are just starting out in all this and I have been looking at a few potential broad markets/states to start doing OOS investments, potentially in Ohio, Alabama, Connecticut, North Carolina, Illinois, Minnesota (I know - lots on the list).
What are the main things that you look for when trying to really narrow down on a market? There are just so many markets that could offer decent potential cash flow. I know there are lots of stats and things to look at when analyzing deals as well as markets like job growth, unemployment, etc. I guess I am just having a hard time really trying to decide on a market.
Goals: Looking for a buy and hold multifamily property. Decent cash flow but not looking for a home run the first time around (although that'd be nice!). Hoping to buy one property by the end of this year, 2 next year and to scale up.
Neighbourhood: Class B or C+ neighbourhood.
Rehab: Comfortable with cosmetic and upgrades to the property but not a whole tear down gut job.
Any input, advice would be greatly appreciated!
TIA :)
Natasha - happy to help. Made a quick video for you on what I look for in markets and how I do it!
https://www.loom.com/share/79170bf16882465e8fca26369a1fa1a7?...