Opinions On Where to Invest

[David Smith]

Hi Everyone, 

I have been a member on bigger pockets for a while, but this is my first post.  First a little about me.  I currently live in the Orlando, FL area.  My real job is commercial construction project manager, with significant residential construction experience via my own homes, served as GC on construction of my family's first home in Atlanta, would not advise while trying to maintain a full-time job and other home renovations and additions since then.    

My only experience with rentals was a previous personal home which we could not sell and ended up leasing for 2 years through property management company.   In the past 2 years, I have rehabbed and flipped two homes in Orlando.  The second home I actually purchased for a rental, it is a nice little home in a quiet blue collar neighborhood which required minimal work.  Long story short I completed the renovation and was starting to talk to property management companies, when the home across the street, which was also being renovated at the same time, went on the market.  The asking price was significantly higher than I would have guessed and it sold quickly.  Valuing mine against this comp,  I realized the rents in the neighborhood do not justify the current value.   So I called my agent and said we are selling.

So now I am back as square one,  I want to invest the proceeds from the sale of the in a couple of buy and hold rentals, this will be an all cash purchase.  My problem is that I am no longer confident in Central Florida market, I see way to many apartment complexes going up and current home prices seem out of line with rent.  My feeling is that when the eventual market downturn comes, many of the the people who are pouring into the state from Ohio, Indiana, etc. will be forced to move back wherever they came from, as they always do, as the Central Florida economy is built on disposable income.   Consequently, I believe, rents will suffer as all of these apartment complexes offer deals to fill space.  With all that said, my question is, does anyone have an opinion on good blue collar areas\neighborhoods in North Carolina, South Carolina, Georgia,  Virginia, to buy approximately 2 homes in the $70,000 range which return a good rental income?   My plan is to purchase and turn them over to a Prop Mgmt co.  Thanks for any ideas.

[Michael Farrugia]

Adam Adams i am very interested in these areas as well for a few rental properties. Any information your able to provide would be greatly appreciated.

[Christopher Bunge]

Mr. Smith,

I can tell you that Columbia, South Carolina is a solid market for homes in that price range and honestly, a bit less. Plenty of inventory in the 45k-to-75k range depending on the amount of rehab you are willing to take on.  If you are doing thing long-distance I would assume you want to avoid more than cosmetics.

Depending on the neighborhood you should expect rents for these types of houses to be from 750 to 1100 here. Columbia is the capitol city, there are several universities here including USC and we have a stable economy. 
If you look at Zillow or Trulia I think you'll get a feel for what 70k buys here. If you'd like specific examples or details about a particular home feel free to PM me and I can shoot you some addresses. I spent all day Friday and Saturday 'kicking tires' of houses and most were under 100k.
Best of luck in your search!
Chris Bunge

[Andrew Ashby]

@David Smith, I have to disagree with you on the impending doom in Central Florida. Central Florida's population boom (Orlando MSA has added 400,000 in the last 5 years alone) is underwritten by job growth. Orlando is even a serious candidate for Amazon's HQ2 and the northwestern section of the beltway will be completed within the next 2 years--bringing job and population growth to the NW suburbs like Apopka and others. I'll agree that the current retail prices on new home construction will likely see a correction in the near future when builders catch up with demand and saturate the market. However, there's still a ton of opportunity for cash flow in Central Florida in houses priced $100k-$200k. I even have investors that are willing to spend up to $300k for the right SFRs in highly desirable areas which have been desirable for decades and have VERY significant rent premiums attached to their zip codes. I'll also agree that "Multi-family Mania" has driven prices up and CAP rates way down to the 3-5% range in multifamily...but there's still a ton of investment potential in your Orlando Metro home market in SFRs and small multi-family especially.

[David Smith]

@Christopher Bunge,  Thank Columbia is a city I have not considered.  That is a great lead for additional research.  

[Christopher Bunge]

Originally posted by @David Smith:

@Christopher Bunge,  Thank Columbia is a city I have not considered.  That is a great lead for additional research.  

[Christopher Bunge]

https://www.trulia.com/property/5031150710-115-Par...

Here is an example.

750 or 800 dollar rental and I'll look at it in the morning but you should figure 65k total invested. If you are ok with that math Columbia is easy. Honestly? We can do probably do  better.