Where Am I Investing Right Now?

The number one question I get each and every time I go to a real estate investment meeting is where are you investing right now? So I thought I would take some time to answer that question right now:

Salt Lake City, Utah:

This is not meant to be a knock against Salt Lake City, or SLC, but when you think of flash and sizzle in terms of a city this is not where the mind instantly runs too. Just the opposite as a matter of fact, however in real estate investing it is not about the flash and sizzle instead it is about substance and Salt Lake has plenty of that. Over the last half decade the youth migration toward the west has been substantial. Feeling the housing squeeze from a pricing perspective in the Northeast has sent millennials west. While Phoenix is a close contender for a top spot on this western demographic the growth of the health care jobs market and overall expansion of the downtown area and cost affordability from an acquisition standpoint gives this city a slight edge over its competitors.

Austin, TX

This has the potential to be the worst kept secret in the real estate market. A young and incredibly vibrant population that is fiercely loyal to the area combined with a high demand for student housing combined with a growing sentiment has a startup hub for small business and technology startups the demand for housing is going to continue to grow. Costs are rising from an accusation prospective based in speculation and failed speculation creates opportunity. The rapid growth from business and the influx of jobs over the next decade in the area make it too good to pass up.

Newark, NJ

Before you begin to laugh on this one this is the definition of a long term play and the ability to see the board as it plays out is critical. Newark downtown has been plagued over the last fifteen years has a city of starts, stops, and restarts. However, there is now a groundswell of support from civic and business leaders to revitalize and shoot some badly needed life into the city’s blood stream. This is always a positive sign to see when everybody is on board with a plan on top of low acquisition costs. For those who enjoy the long term play of buy and hold there are no many valuable opportunities over the course of a city anymore so here is the time to be early to the party than arrive fashionably late.

Madison, WI

There is a very simple recipe here- college town with young population looking for affordable housing. Also, a growing number of technology companies have moved operations to the Madison area starting a trend showing no end in sight thanks to Wisconsin and the city’s pro-business climate. Reasonable purchase price combined with demand for the quality spectrum make for interesting opportunities for interested real estate investors for those interested in the buy and hold or flip model.

The Watch List aka the runners up: Phoenix, Nashville, Hartford, and Milwaukee

Stay Away Froms:

Boston, MA

This is the exception to the rule about college towns and young populations, however rising costs from an acquisition cost combined with steep competition make this a no touch. There are pockets within the city still intriguing but hard buying competition from both causal and institutional investors have made the opportunity for long or short term profit harder and harder to come by. An incredible lack of supply has plagued the greater Boston market for a year creating outrageous bidding wars for those properties selling both on and off the market which shows zero sign of changing here in the near future. Continued growth of luxury apartment buildings have also created a bubble on the rental market that is doomed to pop in the next several years for the average landlord from a pricing perspective spelling trouble for their portfolios of multifamily. This is the case of cyclical investing that has turned to sit and wait, but could turn back to strongly invest question is how long before the merry-go-around comes full circle? There are better bets in the area out in the Western part of the state and down along the Massachusetts and Rhode Island border.

Atlanta, GA

Years ago this was a screaming buy but this is a case of the party is winding down and everybody is getting their last dances in. Growth is good and the fact that the city itself has reinvested in itself is a strong vote in its favor, however there is the worry that it was too much too soon over to wide an area. A city now dealing with a massive infrastructure problem, and long plagued commuting nightmares are still an issue that the city seems devoid of answers. Much like Boston where pockets of opportunity exist those pockets are winding down and the windows of growth are closing. If Georgia remains on your mind look to the eastern part of the state: Savannah, Athens, even parts of the greater Augusta area.

Seattle, WA

Here is a case of a twofold response in the case of institutional commercial real estate investing there show no signs of Seattle letting up anytime soon. Seattle has won the award for most cranes over a city for a couple of years in a row and has no intention of giving up that mantle of growth in the near future. However this has created a trickledown effect to the residential side of high demand with expensive supply. There are good deals to be found as the city expands in the Southward direction and could easily find itself on the invest list next year however with opportunities dwindling and costs rising this creates a hard driving problem for the investor on the residential side, though this is market worthy of careful consideration over the next year.

Detroit, MIIt is hard to ignore the growth of the city within the last couple of years, however the hole Detroit was in, and to a degree continues to exist in, will take many years to climb out of. Demand has not risen as much as either desired or expected on both the rental and sales side of thing. Detroit makes the watch list for the revitalization downtown and the high number of commercial institutional investors who are starting to pump into the area again, however it would be cruel to those who love Detroit to see this become a case of building everything and nobody coming. That said however Detroit does take the number one spot on the watch list as the top candidate for the city most likely to move from the stay away list to the invest in list but the next six to eight months will be watched very closely.