St. Louis or Indianapolis for my first remote flip?

[Matt McConkey]

Hey BPers, 

My business partner (also my wife) are the competitive type. Now we're going to take this energy and put it toward finding, buying, rehabbing and closing a flip before year's end. She will be exploring a different market than myself. Whoever gets a flip under contract first wins.  

I've narrowed my two markets to: St. Louis and Phoenix. 

Quick Background -- We've been remotely wholesaling in Texas for the past three years, but want to open up a new market for a flip. 

Phoenix -- Pros -- We live here, I already know A LOT of people would could get the job done and it's in our backyard. Cons -- Extremely competitive market and higher entry point $$$. Less margin for error. 

St. Louis -- Pros -- I'm originally from central Illinois and my heart has always been in St. Louis. I eventually want to own rentals in St. Louis and not in Phoenix. Lower $$$ entry point. Cons -- I don't know a single person in the REI market. Remote flipping will be no easy task.

What would you do and why? 

***Sorry the headline says Indianapolis.***

[Account Closed]

I just moved from Arizona out here to Cape Girardeau, which is about 2 hours south of St. Louis. I was in Buckeye, just west of Phoenix. I know that I'm no help to you now, but I plan on investing in St. Louis as I get more familiar with the area. I'm going to be joining a local REIA pretty soon. Have you considered investing in other areas around St. Louis or is your target pretty firm in St. Louis? Just curious.

[Matt McConkey]

@Account Closed -- Right now, i am going to focus on St. Louis and the immediate surrounding areas. But once you get established, I would definitely want to connect, so we can bounce ideas and possibly do business. Thanks for commenting!

[David Ounanian]

@Matt McConkey I think St Louis is a great market for investors because of the price points you mentioned.  Let me know if you want touch base as I'm an agent-investor on the ground here in St Louis and always looking to meet new people and expand my network.

[Matt McConkey]

@David Ounanian Thanks for reaching out! I just sent you a message. Looking forward to connecting. 

[Marcello Oliveri]

@Matt McConkey

Good evening Matt, did you ever end up buying in St. Louis? I’m thinking about buying some buy and hold apartments there but am unsure because of the population decline. I’d love to hear how it went for you if you ended up buying.

[Matt McConkey]

@Marcello Oliveri

I did end up buying, rehabbing, selling and wholesaling in the St. Louis market. A little of everything. Yes, there is a population decline, but if you find the right areas, you'll never have an issue finding renters.

Like most cities, it can be street by street. I bought a fourplex on a rough street and two blocks north was night and day difference.

Don't expect appreciation unless you can do it via major rehab. It will happen, just slower. Buy for cash flow in St. Louis.

Some factors when buying:

1. Every property manager (I ever dealt with) will take first month's rent (usually up to $500). This is not the case in other markets I invest in. Usually half.

2. Expect 10% PM fees.

3. Evictions (non-COVID times) will take two months.

4. Water/sewage/garbage cost around $65 per month, per unit and rarely can you bill back to the renter.

More advice? DO NOT BUY ANYTHING UNTIL YOU VISIT THE CITY. I cannot stress this part enough.

You can find rentals in parts of the city where units cost $20k and rent for $550 a month, but they aren't for the faint of heart.