Looking for good market suggestions

[Samat Davletshin]

Hello BiggerPockets!

I am excited about starting my REI journey this year! I live in San Francisco and looking to invest out of state using BRRRR strategy. Brandon says he doesn't like the question "What is the best market?" because "the best market is where you have your team". The problem (or the opportunity) is that I don't have a team yet so I am free to choose the state/city/area.

I know it will be challenging to implement fully on the first deal but this is what I am aiming for:

- Get a full refinance and take all the spent money out of the deal. So that would require the 70% rule in my understanding.

- Have a mix of appreciation and positive cash flow. So I am thinking a B- neighbourhood would be good.

- Invest $20k-$30k with a conventional loan. So I would imagine it would be a $50k-$75k house ($10k-$15k down) and average renovation (good foundation, walls, roof, electrical, plumbing, and $10k-$15k for the rest). So the renovated house would have the appraised ARV of $90k-$130k.

I am not sure what would be a good market for it (if any) but I am considering at Memphis, TN; Birmingham, AL; Oklahoma City, OK; Rochester, NY; Pittsburgh, PA; Cleaveland, OH;

Would appreciate any tips on what could be potentially matching markets for my criteria! Also please let me know if any of my plans/calculations are missing something.

Thanks!

Sam

[Jim K.]

Originally posted by @Samat Davletshin:

@Jim K. thanks for the tip! I agree there is probably a lot that I don't know. Any particular points that I should pay attention to?

My current plan is:

1) Find a good market that will work for me matching the criteria I described above

2) Using the power of BP and the internet ask for recommendations in that city for great reputable investor-friendly agent and property managers

3) Ask the agent for a good lender. Ask the property manager for a good contractor recommendation.

I am likely missing multiple things here and would appreciate valuable advice that will save me tens of thousands of dollars!

Samal, I'm going to be direct. Please don't take that to mean that I'm trying to be cruel. I'm not, I'm just not going to sugarcoat things.

1. Brandon explained that you need to stop asking the question "What's the best market." You shrug and say, "Well, I don't have a team, so I'm free to choose." No, you're free get SCREWED if you do that. Find your property manager through BP or other means FIRST. Worry about your market second. Brandon is right, don't screw this up.

2. It's the end of June. This is the absolute WORST time of the year to look for a good general contractor.  In my area, the guys you would want to work with will tell you to call them next year. Anyone who's willing to work for you now is completely suspect. This varies in different parts of the country, but here? It's set in stone.

3. You need to better understand how tight the housing market is right now. Properties are being sold just one or two days after they're listed. I don't think your atrategy is going to work well. Our last acquisition went on the MLS at $69K. We called the same day, got a showing the next day, put in our cash offer for the full price immediately after the showing. All the same, we had to beat out four other offers to get the property. To be clear, the property then appraised for $70K. This was not some wild-and-crazy deal, just an ordinary sale. So you're going to need to devote significantly more money to your acquisition strategy to beat out people like us.