All Forum Posts by: Eric Fernwood

Hello @Dexter Belleza,

So everyone knows where Sloan is, see the map below (click to enlarge). There is an unincorporated area known as Enterprise, northwest of Sloan. Enterprise is one of the few areas remaining in Las Vegas where there is undeveloped land.

I checked south of the existing developments in Enterprise, and like most undeveloped areas around Las Vegas, it is federal land. 90% of the land in Clark County is owned by the federal government. See the map below. Las Vegas is a small island of privately owned land in an ocean of federal land. The land shortage and rapidly increasing population are why prices and rents continue to rise quickly.

Could the land be transferred from the federal government? Over the years, there have been many proposals to transfer land from federal to private ownership, but it rarely happens.

There are other considerations about development south east of Enterprise.

• Raw land in desirable areas sells for between $1M to $3M per acre. As a result, most new homes start at $550,000. The tenant demographic we've targeted for the last 16+ years can only afford to rent properties currently priced between $350,000 and $475,000. So, even if the land came into private hands and homes were built, it would not increase the number of properties our target tenant segment can afford.
• Access will be an issue. As you can see, there are no major roads south of HWY 160 or near the Sloan area. The further south you go from HWY 160, the longer it takes to get to shopping, jobs, etc. This is part of the reason that we (our clients) have few properties well south of HWY 160.
• Infrastructure will be a long term issue. Stores, schools, all such developments are based on rooftop density in an area. It will take a long time to have a sufficient population density in this area to justify significant development.

In summary, I do not believe the area south of Enterprise and the Sloan area will be developed in the foreseeable future.

Hello,

Great comments on this thread. However, I believe the focus is almost exclusively on “deals” and properties. I think this is looking through the wrong end of the telescope. Why?

Never, in the history of the world, has a property paid rent. The tenant who occupies the property pays the rent. The purpose of the property is to attract and keep what I call a reliable tenant. A reliable tenant is someone who stays for many years, pays rent on time, and takes good care of the property. My focus when selecting properties is to buy only those that my target tenant segment is willing and able to rent. Results over the last 17+ years:

• Average tenant stays > 5 years.
• Seven evictions in 17+ years out of a tenant population > 1,000.
• During the 2008 financial crash, clients experienced no decrease in rent and no vacancies. It was similar during COVID and the eviction moratorium.

The process I followed is simple and virtually eliminates guessing and luck and has three steps:

1. Identify a tenant segment with a high concentration of reliable people. You can identify this segment by interviewing multiple property managers. If anyone want to know the specifics, let me know.
2. Once you know what and where this segment rents today, buy similar properties. This eliminates the guessing and luck associated with picking a property.
3. Work with a property manager who has a track record of selecting reliable tenants. I know of only two property managers with the skill in Las Vegas. You need this skill because even in a tenant segment with a high concentration of reliable people, not everyone is reliable.

There is another consideration: where to invest. Most cities I have researched have rent growth of 1% to 2% per year. Buying properties in such locations is a fatal mistake. Why? Because the goal of real estate investment is financial freedom. Financial freedom is not just about replacing your current income; it requires an income that increases faster than inflation. No fixed amount of money will enable you to maintain your current lifestyle over time.

For example, suppose you buy a property where rents increase by 2% per year and inflation is 5%. If the rent is $1,000/Mo, what will be the buying power of $1,000 in five, ten, and fifteen years?

• Five years: $1,000 x (1 + 2%)^5 / (1 + 5%) ^5 ≈ $865. So, even though rents increased by 2% per year, inflation was 5%, so your buying power declined. Buying power is not well understood. Suppose you go to the store today and the basket of groceries you need costs $100. If inflation is 5%, how much money will you need in 5 years to buy the same basket of goods because the purchasing power of the dollar declined due to inflation? $100 x (1 + 5%)^5 ≈ $127.63. This is why if rents do not increase faster than inflation, you can never maintain financial freedom because inflation is constantly eroding the buying power of the dollar.
• Ten years: $1,000 x (1 + 2%)^10 / (1 + 5%) ^10 ≈ $748.36
• Fifteen years: $1,000 x (1 + 2%)^15 / (1 + 5%) ^15 ≈ $647.39

What causes rents and prices to rise or fall? Population growth. In cities with declining or static populations, property prices are low because there is little demand so little appreciation. Rents follow prices, so where prices are low, there will be little rent growth. Only in cities with significant and sustained population growth will you find rents outpacing inflation.

Focus on Your Goal

If your goal is financial freedom, focus on the tenant segment you want to occupy your property. Once you identify the segment, buy properties similar to what and where they rent today. Also, only buy in cities where rents and prices have consistently outpaced inflation for many years.

Sell (1031) or Refinance?

The decision to sell or hold depends on how the property has performed in the past. I created the following decision tree to simplify the process.

Ultimately, the decision to use a 1031 exchange or refinance and take out equity depends on your individual circumstances and investment goals.

We are now in Q3, and it is a good time to check in on the Las Vegas investment market's performance for the first half.

Before proceeding, note that the charts only include properties that fit the following criteria unless stated otherwise.

• Type: Single-family
• Configuration: 1,000 SF to 3,000 SF, 2+ bedrooms, 2+ baths, 2+ garages, minimum lot size is 3,000 SF, one or two stories.
• Price range: $320,000 to $475,000
• Location: All zip codes marked in green below have one or more of our client’s investment properties (click to enlarge).

How’s the Market Doing in 2024?

Prices and rents continue to increase steadily.

Sales - $/SqFt by Month

(Click to enlarge.)

The median sales $/SF was up 9% YoY and 6.7% YTD.

Rentals - $/SqFt by Month

Rents rose 4.3% YoY and 6% YTD.

The Market Remains Hot

Following the rapid inventory decline starting in Q1, the number of days on the market for sales remained below 17 and for rentals below 19, indicating strong demand for both.

Sales - List to Contract Days by Month

Rentals - List to Contract Days by Month

Rental trends tend to follow sales. When prices are high, more people are forced to rent, which results in increased demand and rising rents.

Inventory has been frustratingly low and is not getting better

Sales inventory plummeted at the beginning of the year and has remained below one month in Q2. 6 months is considered a balanced buyer/seller market. We are firmly in a seller’s market.

The rental inventory had a similarly rapid decline in Q1 and has remained below one month in Q2.

The stubbornly low inventory for both sales and rentals can only mean one thing—rising prices and rents.

Interest Rates in 2024

The interest rate dipped by about 0.5% starting in mid-December 2023 and January, which triggered an unseasonal price rise for both months (See Q1 2024 Las Vegas Market Update). The 30-year fixed rate ranged between 6.625% and almost 7.25%. See the chart below.

[Source: Freddie Mac]

Where Will the Market Go for the Remainder of the Year?

Interest rates

With the cooling inflation reports, the Fed is expected to start cutting rates in September. Whether that will happen remains to be seen. Additionally, lower Fed rates do not necessarily translate into lower mortgage rates. If the Fed does not increase buying of mortgage-backed securities, the mortgage rates will not drop significantly. I expect mortgage rates to remain within the same range as we have seen throughout 2024.

Prices and rents

Assuming interest rates remain stable for the remainder of the year, given the sub-one-month inventory for both sales and rentals, I expect the prices and rents to continue to rise for the remainder of the year. However, the rate of increase may be lower than that of Q1 and Q2. We’ve noticed a slight increase in inventory in July and a slight increase in time on the market. Time will tell whether that’s a blip or a trend. Based on our participation in the market in July, good properties priced correctly are still selling within days. Attractively priced properties still receive multiple offers, often above the asking price. The demand is still very strong.

Summary

The investment market in Las Vegas grew strongly in the first half of 2024 and is expected to continue growing, though potentially slower in the second half of the year (as long as the interest rate does not change significantly).

Hello @Saeed J.,

What you should buy depends on your goals. If your goal is financial freedom you need an income that meets four requirements:

• Rent increases faster than inflation: Only if rents increase faster than inflation will you have sufficient dollars to pay inflated prices in the future.
• Sufficient to replace your current income: You must have sufficient income to replace your current income.
• Lifelong income: It must continue throughout your life.
• Low operating costs: Every dollar you lose to operating costs is a dollar less for you to live on.

Rents Increase Faster Than Inflation

We live on buying power, not a fixed number of dollars. For example, if today you require $100 per week in groceries and inflation is 4% per year, how much will you need in 5 and 10 years?

• In 5 years: $100 x (1 + 4%)^5 ≈ $122 or a 22% increase.
• In 10 years: $100 x (1 + 4%)^10 ≈ $148 or a 48% increase.

Unless your rents increase faster than inflation, you will not have the dollars to pay inflated prices and sooner or later you will have to go back to work.

The key factor for rent growth is significant and sustained population growth.

Sufficient to Replace Your Current Income

You will likely need multiple properties to replace your current income. How much capital you will need depends on the appreciation rate. Two examples.

Example #1: The appreciation rate is low, characterized by low cost properties. In such a city, every investment dollar must come from your savings. For example, if you need 25 properties to replace your current income and each property costs $300,000 and your only cost is a 25% down payment, the total amount from your savings for down payments will be:

• $300,000 x 25 x 25% = $1,875,000

$1,875,000 is a lot of post tax capital to accumulate

Example #2: The appreciation rate is 7%/Yr. each property costs $400,000, and you will put 25% down. The first property will cost:

• $400,000 x 25% = $100,000

Due to rapid appreciation, you can use cash out refinance to pay for additional properties. At 7 %/Yr, how many years will you need to hold the property before a 75% cash out refinance will yield $100,000? For simplicity, I will assume the payoff of the mortgage is the original amount of $300,000.

• After one year: $400,000 x (1 + 7%)^1 x 75% - $300,000 ≈ $21,000
• After two years: $400,000 x (1 + 7%)^2 x 75% - $300,000 ≈ $43,470
• After three years: $400,000 x (1 + 7%)^3 x 75% - $300,000 ≈ $67,513
• After four years: $400,000 x (1 + 7%)^4 x 75% - $300,000 ≈ $93,239

So, after about 4 years, a 75% cash-out refinance will pay for the down payment. Also, the property and the additional property will continue to appreciate, and you can continue to repeat the cash-out refinance process. Investing in high appreciation markets enables you to acquire the number of properties you need at a fraction of the cost of buying in a low appreciation location.

Lifelong Income

Many people face the nightmare of outliving their money. To avoid this, you need your rental income to last throughout your life. This requires that your tenants remain employed at similar wages. The problem is that all private-sector jobs are relatively short-lived. The average life of a company is 10 years. The average life of large corporations, like those on the S&P 500, is only 18 years and falling. So, in the foreseeable future, every non-government job your tenants have will vanish. Unless companies set up new operations in the city creating replacement jobs, all that will remain are lower-paying service sector jobs, which pay much less.

When average incomes fall, so do rents and property prices. City services are dependent on property taxes and sales taxes. If city revenues fall, their only option is to cut back on services, which includes police and schools. This results in increased crime and people leaving the city. This starts a downward spiral from which few cities have recovered.

The most important metric is crime. Never buy properties in high crime cities, which you will find here.

Low Operating Costs

It's not about how much you gross but how much you net. Property taxes and insurance are typically the two biggest recurring costs. Below is a comparison of three states with no state income tax.

Sources for insurance and property taxes: Insurance - ValuePenguin, State Property Tax Rates - Rocket Mortgage.

In order to demonstrate the impact of taxes and insurance on net rental income, I compared the overhead costs of a $400,000 property in three different states. (These averages represent state-level; individual cities may levy additional taxes.)

To achieve the same level of cash flow as a property in Nevada, you would need to generate a higher cash flow in Texas and Florida to offset the higher operating costs.

• Texas: The property must generate $5,752 ($9,256 - $3,504) more cash flow annually to compensate for the higher operating costs in Texas.
• Florida: The property must generate $2,343 ($5847 - $3,504) more cash annually to compensate for the higher operating costs in Florida.

Overhead costs can have a large impact on cash flow.

A Process For Selecting an Investment City

There are too many potential cities to evaluate each one. However, you can start with a list of potentially good investment cities and remove those that fail to meet additional criteria. Below is the process I used.

• Sufficient population: cities with a metro population greater than 1M. Small towns may rely too much on a single business or market segment. Wikipedia
• Significant and sustained population growth: Never invest in any location with a static or declining population. Wikipedia
• Low crime rate: Never invest in any city on Mapped: The Most Dangerous Cities in the U.S. list.
• Low operating costs:
  • Property taxes: State Property Tax Rates - Rocket Mortgage.
  • State average insurance cost: Insurance - ValuePenguin

If you follow this process, you will have a short list of cities for further investigation.

An Additional Consideration

One additional consideration is an experienced investment team. Everything you learn from books, seminars, podcasts, and websites is general information. However, you will buy a specific property, in a specific location, subject to specific conditions. The only source for all the resources, expertise, and processes is a local investment team.

Saeed, I hope this helps you select an investment location that will enable financial freedom.

Hello @Breanna Green,

I recommend first determining your financial goal and then selecting a location that best supports that goal. If your goal is financial freedom, choosing the right location is the most important investment decision you will make because it affects all long-term income aspects, including:

• Whether rents keep pace with inflation is crucial. If rents don't keep up with inflation, owning multiple properties in such locations won't matter because buying power decreases daily. We live on buying power, not a fixed income. This is evident from price increases every time you go to the store. Unless rent growth outpaces inflation, you will either have to continuously reduce your standard of living or get a job. The best indicator is whether the city has significant and sustained population growth. Wikipedia

• How long will your income last? Too many people face the nightmare of running out of money during retirement, a time when they are least able to reenter the workforce. Income persistence requires that your tenants remain employed at similar wages. The problem is that all non-government jobs are relatively short-lived. The average life of a company is 10 years. The average life of large corporations, like those on the S&P 500, is only 18 years and falling. So, in the foreseeable future, every non-government job your tenants have will vanish. Unless companies set up new operations in the city creating replacement jobs, all that will remain are lower-paying service sector jobs. Crime is a major factor companies consider when selecting cities for investment; companies are unlikely to set up new operations in high-crime cities. Rank of the top 50 most dangerous US cities.

• Operating costs. Every dollar you lose to operating costs is a dollar less you have to live on. There are direct costs and indirect costs. The major direct costs are property taxes and insurance. Below is a comparison of average annual property insurance and property taxes for 5 states:

  • Texas: average insurance: $2,536, property tax percentage of value: 1.68%
  • New York: average insurance: $1,418, property tax percentage of value: 1.40%
  • California: average insurance: $1,839, property tax percentage of value: 0.75%
  • Nevada: average insurance: $1,144, property tax percentage of value: 0.59%
  • Florida: average insurance: $2,207, property tax percentage of value: .91%

  To put these costs into perspective, below is a comparison of the annual cost for a $400,000 property.

  • Texas: $2,536 + 1.68% x $400,000 ≈ $9,256
  • New York: $1,418 + 1.40% x $400,000 ≈ $7,018
  • California: $1,839 + .75% x $400,000 ≈ $4,839
  • Nevada: $1,144 + .59% x $400,000 ≈ $3,504
  • Florida: $2,207 + .91% x $400,000 ≈ $5,847

  Sources: Homeowners insurance, state average property taxes

  Indirect costs: Rent control is a hidden tax that may limit your ability to select the best tenant, remove a non-performing tenant, and increase rents enough to compensate for inflation. The best source for information is a Google search for the specific city or state.

Breanna, I urge you to not narrow your focus to a city based on your familiarity. Instead, choose a city that best supports your long term financial goal.

In the last 16+ years, I’ve worked with many investors. Occasionally, I'm asked about two or more people pooling their resources to buy properties. This can work, but there is a potential pitfall: assumptions.

NOTE: I am not an attorney or business advisor. The following is a list of topics I've encountered in partnership agreements, although it's not exhaustive. I advise working together to identify and agree on potential issues. Then, have the document reviewed by an attorney.

For example, suppose two people decide to pool resources and invest together. They have known each other for many years, so no issues are anticipated. A few months later, the refrigerator breaks down at a property. One wants to install a used refrigerator to save money, while the other wants a new refrigerator with a warranty. Although this seems trivial, I have seen friends argue over less. How do you minimize future problems? By writing and signing an agreement that covers as many potential issues as possible. Below are some items I’ve seen in teaming agreements.

1. Ownership Interest: Clearly define the percentage of ownership each party has in the property. This is usually based on the proportion of the down payment, mortgage payments, and other costs each party contributes.
2. Financing Details: Define who will pay for what. This includes the mortgage, who will be named on the mortgage, and how you'll split the mortgage payments. Also, define how you'll share the acquisition costs, such as the down payment, renovation, and closing costs.
3. Payment Responsibilities: Explain how to divide and pay for regular costs like mortgage, property taxes, insurance, homeowners association fees (if applicable), and upkeep expenses.
4. Management and Maintenance: Agree on how property maintenance, repairs, and improvements will be handled, including decision-making processes, funding for these activities, and responsibilities for performing or managing the work.
5. Single Decision Point: For example, I've seen situations where one person agreed to replace an appliance while another strongly opposed it. This kind of indecision is harmful when running a business. One individual needs to make the final decisions.
6. Dispute Resolution: Define and agree on a method for resolving disputes that may arise, such as mediation or arbitration, to avoid litigation.
7. Change in Marital Status: What happens to the ownership if a party gets married or divorced? What happens if a party dies or becomes incapacitated?
8. Exit Strategy: Include provisions for what happens if one party wants to sell their interest in the property. This could involve a right of first refusal for the other party, buyout terms, and a method for determining the sale price.
9. Rental and Use: Define the rules for renting out the property or parts of it, including how income and expenses will be divided. Also, agree on how the property will be used, who can live there, and under what conditions.
10. Contribution Reconciliation: Determine a process for handling situations where one party cannot meet their financial obligations or if there are significant discrepancies in contributions to expenses.
11. Legal and Professional Fees: Decide how legal and other professional fees related to the purchase and management of the property will be shared.
12. Taxes: How will the tax advantages be divided?
13. Signatures and Legal Advice: All parties must sign the agreement, and each party is advised to seek independent legal advice to understand their rights and obligations fully.

Summary

The hours you spend creating the agreement will likely save your friendship and legal fees.

Hello Michael,

Your comment on unlearning is well-founded. The last person we added to the team was unlicensed. Today, we have an increased volume of clients, so we need a licensed person. 

If you know someone who might make sense, please send them our way.

...Eric

Hello @Abigail Lipson,

You are right to spend the time selecting an investment city. The location where you invest determines all long-term income characteristics essential for achieving and maintaining financial freedom. The characteristics defined by the location include:

• Total capital required: If you can grow your portfolio using accumulated equity by cash-out refinancing, which is only possible in areas with high appreciation, you'll need considerably less capital from your savings.
• Inflation protection: Whether rents outpace inflation, enabling you to sustain your lifestyle indefinitely, only occurs in cities with significant and sustained population growth.
• Income persistence: How long your income will last. This is dependent on the city's long-term economic growth.
• Natural disaster risk: Certain locations are more prone to natural disasters, such as hurricanes, tornadoes, earthquakes, fires, and floods. Although insurance may cover the rebuilding of your property, it could be vacant for months or years until the community recovers and people return.
• Operating costs: Every dollar lost to property taxes, and insurance is a dollar less for you to live on.
• Rent control: Government control of your rental property can transform a promising investment into a nightmare.

Location Selection Process and Tools

You can try to analyze all possible cities in the US and select the “best”. But it could lead to evaluating hundreds if not thousands of cities, which is impractical due to the time required and insufficient data for smaller cities.

The other method is to eliminate all cities that are unlikely to be good investment locations, and the remaining few are worthy of further investigation. This is straightforward and practical.

The process starts with an initial list of candidate cities. Start with cities with a metro population of >1M if you want long-term, reliable income. Smaller cities may rely too much on a single business or market segment. Source: Wikipedia

From this initial list, eliminate cities that do not meet the following additional requirements.

• Minimize total capital required (to achieve financial freedom): To replace your current income, you'll need to buy multiple properties. The capital needed from your savings will depend on the location's appreciation rate. In low appreciation areas, you'll need to cover the cost of purchasing multiple properties entirely from your savings. However, in cities with higher appreciation rates, you can leverage the accumulated equity to buy additional properties via cash-out refinancing. Therefore, you'll need less capital in rapidly appreciating cities than in lower-cost locations. Never buy in slow-appreciating cities. Source: FHFA House Price Index
• Inflation protection: The only way to maintain your purchasing power and living standard is if your rents increase faster than inflation. Prices drive rents. Where prices are higher, fewer people can buy, so they are forced to rent. This increases demand for rental properties, which drives up rent. Where prices are low, more people can afford to buy, so fewer people rent. Where prices are low, rents increase slowly, so you will not have the money to pay inflated prices. Only buy in cities with significant and sustained population growth. Never invest in any location with a static or declining population. Source: Wikipedia
• Income persistence: You need a rental income that will last throughout your lifetime, which requires your tenants to remain employed at similar wages. Non-government jobs typically last between 10 and 20 years, so every non-government job your tenants have will eventually disappear. Unless new companies move into the city and create replacement jobs that pay similar wages and require similar skills, the only available jobs will likely be service sector jobs, which pay significantly less. Companies are unlikely to set up new operations in cities with high crime or high overhead costs. Never invest in any city on this list: Mapped: The Most Dangerous Cities in the U.S.
• Low natural disaster risk: A natural disaster can be a financial disaster for you. The issue isn't your property. Insurance will cover the cost of rebuilding. The problem is the community. Jobs, stores, roads, healthcare services, and gas stations can all be destroyed in a disaster, as is often shown in the news. With the community destroyed, your tenant has no choice but to move somewhere they can live and work today. It could take years to rebuild the community, and it may never recover in many instances. Meanwhile, debt service, taxes, insurance, maintenance, and other expenses continue without pause. The relative cost of homeowners insurance is the best indication of a high-risk location. Source: Insurance - ValuePenguin
• No rent control: Some states and metro areas have implemented various kinds of rent control. Rent control may prevent you from increasing the rent fast enough to keep pace with inflation, limit your ability to select a reliable tenant, and make evictions of non-performing tenants difficult or impossible. Never invest in any city with rent control. Source: Google search.
• Low operating costs: It's not about how much you gross. It's about how much you net. Every dollar lost to operating costs means one less dollar for you to live on. The two most significant operating costs for investors are property taxes and insurance. Operating costs vary significantly by state; only invest in states with low operating costs. Source: Insurance - ValuePenguin, State Property Tax Rates - Rocket Mortgage.

Lastly, select a city with an experienced investment team to narrow the list of cities further.

We are hiring! Due to the increasing client volume, we are adding an investor agent to our team.

Who Are We?

- A team of investment realtors with over 16 years working exclusively with investor clients.

- Delivered over 500 investment properties to 180+ clients worldwide.

- A repeat business rate of over 90%. Over 90% of clients are remote.

- Our services encompass property selection, evaluation, renovation, and management. [Watch a 2-minute video overview of our investor services](https://tinyurl.com/yjpfbyw3).

Our core team consists of four members:

- Cleo Li: Engineer & Co-Founder - CEO. Manages the business and strategic direction, ensuring client success.

- Eric Fernwood: Engineer & Co-Founder - Specializes in data mining, analytics, software development, and process improvement. Handles new client onboarding.

- Taylor Koki: MBA - Investor agent. Primary client contact and on-site property evaluator. (Taylor has been with us for nearly 7 years.)

- Selena Tsai: Manages transactions and renovations, including vendor and property manager handoffs. (Selena has been with us for over 4 years.)

Our Client Base

Our clients are high-income professionals, such as engineers, doctors, finance professionals, and business owners who are all highly intelligent professionals with cash and credit but limited time. They purchase passive income stream services, not traditional real estate.

Our average client buys 2.8 properties. Repeat business is our business, this requires customer satisfaction. This means that you will work with the same people over many years.

What You Will Receive

• Training: Comprehensive investment training, including directed reading, one-on-one sessions, and field training.

• Client Assignments: You will receive fully qualified and trained clients who have signed our buyer representation agreement, obtained loan pre-approval, and are ready to invest. NO lead generation, cold calling, or prospecting.

• Property Assignments: You will receive and evaluate potential investment properties that meet our proprietary algorithm criteria and align them with your client's goals.

• Client Contact: Client interactions primarily via Zoom/email/phone/text. You will rarely physically meet clients. Most clients live in other states or countries.

• Support: You are the client relationship manager and will be fully supported as needed throughout the entire sales cycle.

Who We Are Looking For

- Integrity: Someone who prioritizes the client's interests above their own. We value long-term relationships built on trust.

- Tech-Savvy: Comfortable with technology and detailed analytics.

- Confidentiality: You must be willing to sign a non-disclosure agreement.

- Commitment: You must be motivated and committed to a career as an investor realtor.

- Client Relationship: This is not a typical realtor position involving house showings. You will act as a trusted advisor to high-income individuals seeking financial freedom, not a traditional realtor.

- Excellent Writing Skills: Strong written communication is crucial.

- Self-starting: Excellent time management and organization skills.

- Licensing: Must hold a Nevada real estate license.

If you are passionate about investment real estate and eager to join an elite team dedicated to helping clients achieve financial freedom, we would love to hear from you. Please reach out to me.

Hello @Jesse Rathe,

So we are on the same page, I will assume that your goal is financial freedom.

Financial freedom is more than just replacing your current income. Financial freedom requires:

• Your rental income must increase faster than inflation so you will have enough money to cover inflated costs in the future. For rents to rise quickly, housing demand must continue to increase. Therefore, the city you choose must have significant and sustained population growth.
• Sufficient rental income to replace your current income. This will require purchasing multiple properties. If you buy in a location without significant and sustained appreciation, every investment dollar must come from your savings. If you buy in a location with significant and sustained population growth, you can use a cash-out refinance to reinvest accumulated equity as the down payment on additional properties. This will greatly reduce the total capital required.
• Lasts throughout your lifetime. Your rental income depends on your tenants remaining employed and paying rent. However, most private-sector jobs last between 10 and 20 years. So, unless replacement jobs are constantly being created, your tenants will not be able to continue paying current levels of rent. This requires a city that attracts new companies who will create the replacement jobs. Companies expand to locations with low crime, low operating costs, a pro-business environment, and a metro population >1M.

Having defined these three requirements, I will now provide the sources for the necessary information.

• Cities with a metro population >1M: Small towns may rely too much on a single business or market segment. Source: Wikipedia
• Population growth: Source: Wikipedia. Never invest in any city with static or declining population.
• Crime rates: Never invest in any city on this list: Mapped: The Most Dangerous Cities in the U.S.
• Operating costs: The best indicators of operating costs are state income taxes, homeowner’s insurance, and property taxes. Source: Insurance - ValuePenguin, State Property Tax Rates - Rocket Mortgage. State income taxes - Intuit

Another factor to consider when choosing a city is rent restrictions. I would never purchase property in a city with such limitations. Rent restrictions can limit your ability to select the best tenant, increase rents, and evict non-performing tenants. The best way to determine whether a city has rent restrictions is a Google search for rent restrictions in the specific city you're considering.

Jesse, these information sources should help you on your investment city search.