moving out of the city, where to go?

Question

hey guys, If you were to start building a portfolio from scratch, which city/state would you pick if you had a choice? I live in NYC, have one property (3 family) with decent cash flow. my wife and I are really tired of the city and want to move out. I really like North Carolina for quality of life and property prices. Could anyone give me an advice which locations are best for rental and if it is a good idea at all? what other locations/ states should I consider? here in NYC it's super easy to rent anything for good $. Is there a big demand for rentals lets say in charlotte or around? is it possible to mortgage properties and have decent cash flow? thanks for any advise

Mike D'Arrigo · Answer

@Andrew Malina It depends on what your objectives are. If your primary objective is cash flow and ROI which I presume for rentals it is, I personally think Kansas City and Indianapolis are the two best cash flow markets in the country today. I've been active in those markets since 2010 and love them. There are several cash flow markets, particularly in the Midwest but what I like about Indy and KC is not only do they cash flow well, the have strong economic and demographic fundamentals such as job and population growth. Some of the other popular cash flow markets have very stagnant jobs and populations. Others have like Dallas, Phoenix and Atlanta have strong job and population growth but low ROI. The chart below might be helpful.

DJ S. · Answer

Hi @Andrew MalinaYes I've been here since 2014 and Charlotte has had a huge influx of young professionals - banking is big here (Bank Of America HQ and Wells Fargo, Ally etc). Home prices have shot up in that time. Still compared to NY, its relatively speaking a better deal for some folks from NY.We also have a lot of local investors here so the competition is real. You may be hard pressed to find some 1% homes (rent is 1% of mortgage) in turnkey/MLS move-in ready but if you attend the local reia (charlotte has many reias - an event almost everyday) and network, you can find some rehab deals etc. Just go to meetup.com and search for "real estate".If looking for class A properties, then be ready to pay premium for the areas with good schools but that's also where the rent is higher. So in Matthews for example you can find homes for 350-450K that rent for around $2500-$3500. Just have to keep looking and get there first :-)Best of wishes.

Saami Siddiqui · Answer

@Andrew MalinaI live in California and have one investment property in Charlotte and have been actively looking to get more. To answer your questions, yes rental property is in high demand in Charlotte and you can get into cash flow positive investments off of the mls if you look a bit. However, like @Raul R. has said, it's not as easy as it was just 12 to 18 months ago. That statement though, you can probably apply right across the country. As far as other areas, Indianapolis is one area I closely looked at. Based on zillow estimates, it seems as if you can get good cash flow there as well.

Lee Ripma · Answer

@Andrew JohnsonI tend to agree with Andrew Johnson. You can make a lot of places work for RE investing. If you want cash-flow then you could go to the mid-west. I live in CA and invest in Kansas City and I really love Kansas City now. I actually would move there. Sounds like you already like Charollette so maybe stick with that for now. Go there, see if you can find sub-markets that will work for your strategy. I think you can make it work in a lot of markets but I agree that the barriers are tough in high-priced markets like NYC, LA, SFO, and San Diego. I don't invest in CA because buying property is simply too expensive and I understand cash-flow markets. There are those on here who say you should get started in your backyard, but I like your approach of choosing a new backyard! I actually think a lot of these high priced cities will see an exodus as remote work becomes more possible and folks tire of the high prices. When I think about markets to invest in I always think about jobs and population growth. Good luck and keep us posted!

Andrew Malina · Answer

Thanks for Lots of replies and advise guys. For some reason I did not get any notifications for my topic and never looked back, thinking Noone has responded yet. I am not really a 100% set on Charlotte yet. I'm just basically trying to feel out the market and do as much research as possible before I narrow it down to two or three places. currently my main source of income is my full time job for MTA in NYC. I make pretty good $ and benefits are good as well, besides that, I have a very nice cash flow from the 3 family house I own. I am also capable of making money trading stocks as a day trader. Did that before for a moment and made some nice buck, however when I do make the move I'm pretty sure I would rather open my own business. preferably I rather have few nice cash flow properties and just manage that while making some money on the market (or losing lol)

Audrey Truesdale · Answer

I’m here locally in Charlotte NC born and raised and from what I can see buy and hold investors are seeing cap rates on properties in the double digits in the more affordable rent markets here cap rates trend to go down further away from the city you go. Hope this helps in determining the move to Charlotte and be sure to go to a hornets game when you visit!

Hank Keller · Answer

@Andrew Malina - i love the saying live where you want to live but invest where the numbers make sense! Find a city that you are going to like living in and if it happens to be in a great market, that’s great but you can still make good returns from out of state. It always helps to invest in your local market...if the numbers work!Charlotte is consistently at the top of the “best places to...” lists including live and have real estate. I have 1 property in charlotte and while it’s more expensive than my Indy rentals, it’s @9% returns and phenomenal appreciation.

Raul R. · Answer

Andrew,I live in NYC and invest in Charlotte.. I've been investing in Charlotte for 2 years now, I have 3 investment Properties in Charlotte.Yes there is a demand for rentals in Charlotte, but competition is getting harder compare to when I started.What is your main source of income?? How will you finance your future investment properties?If you change jobs and you are looking to finance for new investment Properties remember, most banks will require to wait at least a year with new job before you qualify for finance.. Banks like stability...

Andrew Johnson · Answer

Andrew Malina You’ll like be better coming up with a Top 5 list of cities you’d want to live in, then look at real estate. Come to San Diego and it will rent easily for good $...but...that doesn’t mean it will cash-flow well for you. I’d imagine you’d have some similar (but not as sever) challenges in Charlotte, Raleigh, etc. That aside, I think Charlotte is an awesome city. You don’t have some the affordability, traffic, etc. issues that plague other places. But you do have some quality culture, good food, pro sports, solid economy, etc. If I could randomly “pick up and move” it would definitely be on my short list.