Set for Life: Best Upcoming Market

[Michael Delpapa]

Hello all,

I am 23 years old looking to build long-term wealth from real estate.  I have complete location mobility and can move to any city in U.S. My plan is to have an owner-occupied multi-family as my first investment.  Live in the unit for 2 years (no capital gains if sold) and then repeat.  With my mobility I have general questions about the real estate market.

1. Which cities do you see as having the most potential for long-term growth (20+ years) in property values based on population growth, job markets, location? I have complete mobility (my advantage, i currently have little capital or experience)

2. Are there certain states that are very real estate tax-friendly?

3. It appears we are at the top of a credit cycle. Do you advise to be on the sidelines next few years and build capital? If I get 40,000 in capital should I stay out of market until there is a correction?

4. Do you believe there are always good deals in real-estate since it is an inefficient market?  Each sale has personal factors (i.e. seller moving)

In terms of funding the real estate business, I am currently searching for a W2 engineering / manufacturing job in the Miami area . I just graduated with Master's Degree in Mechanical Engineering. I also am owner of a new sport called CROSSNET (check out crossnetgame.com if your interested!). Any advice on markets to take advantage is appreciated!

I love the San Diego area.  I am very interested in CA and CO. I want to take into account quality of life in a given city.  I just took class to become a licensed real estate agent in Florida. 

If you have not read Scott Trench's book Set for Life, you should it was one of the best real estate books I have read for a young person.

[Ray S.]

I think the answer to most of your questions comes down to your personal goals. If you want to accumulate a large portfolio of income properties, do you want to buy short term vacation rentals, do you want to flip, house hack, a combination of them all? 

I also live in Miami Beach. I can say, Miami is an amazing place to live, but a terrible place to try and make money. If you can make your money elsewhere and live here though, it's a great place to be. The real estate here is so expensive, but the rents are so low. The property taxes and insurance are very high, specially flood insurance if you buy on the beach. HOA fees are also very high if you buy a condo. Becoming an agent here is very challenging because everyone and their grandmother has a real estate license.

I bought property here when I felt there was still money to be made and am now looking to take my gains and run somewhere else because my cap rate is rapidly eroding due to the sky-high expenses here.

I'm also looking for the best areas to invest outside of FL, because it's hard to make money here and dealing with hurricanes is no fun!