Denver, CO and/or Gulfport, Mississippi & surrounding areas?

Question

Hi, I'm VERY new to the BP site and forums in general & am also in the novice stage of my real estate investing journey and want to get out of my current state of analysis paralysis :). We're located outside Denver, so happy to discuss CO as a whole, but for many reasons I have been interested in other markets as well. I'm reaching out to see if anyone has any thoughts on the current market in the Gulfport, MS area? Initial analysis of the area is positive. I like the prices vs. rental rates which seem to offer good cash flow, schools have good ratings and so on. Appreciate any insights.

Arushi V. · Answer

@Christine Lindsay, did you invest in Gulfport and/or the area? A couple of investors including myself are looking at multifamily there, dm me.

James Carlson · Answer

@Christine Lindsay Take what I say with a grain of salt since we work in the Denver market and think it's pretty dang great. But I think first-time investors should start in their own backyard. You know the market and the nuances of neighborhoods way better than anything out of state. You can also better learn to manage if you're close. Once you learn the ropes, sure, go out of state, but I think that first one should be nearby. If the Denver prices are turning you off, there are some other nearby markets that might be interesting. I think Northglenn, 20 minutes north of Denver, has nice neighborhoods with somewhat reasonably priced homes. (They also allow for short-term rentals, so you might explore STRs and Airbnb as a way to increase your revenues.) Colorado Springs is a great market as well. Good economy, growing population, tons of new development going on in the northwest side of town and in the southside of downtown where there's opportunity at a lower price than Denver. Whatever you decide, I wish you the best. Cheers!

Ben Einspahr · Answer

Welcome @Christine LindsayDenver is an excellent market to invest in plus it is in your own back yard. If it has not already been mentioned in this thread, House Hacking would be a great strategy to start off with to start your REI journey. One thing you mentioned is cash flow. Keep in mind cashflow is not everything. That is only one very small piece of the pie. (Cash flow, Appreciation, Depreciation, and dept pay down) I just finished a report with various house hack case studies for Denver with the new higher interest rate environment. I'll shoot you a DM so you can take a look. It should give you a good foundation for the current market. Thanks

Andre Crabb · Answer

hey @Christine Lindsay, I've been helping people compare markets from cities down to specific neighborhoods. Those two are clearly very different markets...Denver looks more stable (better growth metrics), but is more expensive. So it might come down to your budget. I'm happy to jump on a call if you want to dive in further or compare other cities/areas.

Lane Kawaoka · Answer

We just sold out on our two apartments in Gulfport. The market did not go up as much as we had hoped. It was a fraction of the other markets we are in Houston, Phoenix, Dallas, Huntsville.If you buy the right deal sure... but its always nice to invest in the places where the tradewinds are at your back. Also if you do anything in FL or gulf make sure you get real insurance quotes (north of Birmingham you should be ok) as we got killed with increases these past few years.

Drew Sygit · Answer

@Christine LindsayYour biggest question shouldn't be WHERE to invest, but HOW you will invest! Many OOS investors set themselves up for failure because they don't truly take the time to understand: 1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area. 2) The Class of the PROPERTY they are buying - which is relative to the overall area. 3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area. 4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area. 5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area. 6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS. 7) That OOS property Class rankings are often different than the Class ranking of the local market they live. 8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance. 9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them. 10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them. 11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them. ***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher. https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799 Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC? Good luck with whatever you decide😊

Crisselda Clark · Answer

Hi, I'm here in Colorado Springs. Yes, look at news articles related to cities and counties investing in tourism etc. See what new developments are on the horizon for these areas, watch population trends, look at rentals available, use market research data trend tools, and talk to local realtors and other local investors to see what they're watching and doing. Be wary of last 90 days sales metrics, a lot of that data will be skewed and inapplicable to current rates and data. For example, there is a new development being planned for 19th and Uintah here in Colorado Springs, it is a MF 50 units for at risk youth. This will likely bring down neighboring property values, and might even spook some residents into selling, however the development might also bring some commercial investors into the area too? However that is just speculation, no matter what is happening there is opportunity with creativity.

Pat Heidingsfelder · Answer

Hey @Christine LindsayI've been investing in the Gulfport/Biloxi market for years and think it's a great place for both short and long term rentals. I'm a cashflow investor and have been able to build up enough cashflow to be in the beginnings of FI. You'll definitely want some boots on the ground in the area, as with all areas, there are some better spots than others. I'd say you're best bang for the buck purchase price to rent ratio is going to be Gulfport but Biloxi also has some hidden gems. I'd be happy to help with any possible deals. If you're looking for property management we can help you out there as well.

Justin Allen · Answer

Hi Christine,I've been helping a lot of fellow investors in my area which is Gulfport, MS. Since the AirDNA article came out, I get approx 3-4 investors reaching out to gain insight on our area. I'm also a broker who owns my own brokerage and runs the MS Coast REIA in Gulfport. Let me know when you want to do a Zoom call and we can take it from there if you're ready. Love the Denver area BTW!