Where ever you invest, stay away from raleigh NC, it is a horrible market here and investors are losing $$ big time.
John
I also live in S. Cal and the cash flow is not good. However, I am closing several deals for my clients (I am a lender) in Kansas City area and these are very nice. both SFR and comm’l. so I am going there next month to drive some areas and have a better idea of the values.
I think that looking for a good place to invest is a good idea in itself. I also, however, believe that you can invest almost anywhere as long as you make the right decisions and are patient. Maybe not NYC for a newbie, but generally speaking most markets present their own opportunities. I found for myself that patience, research, and forward thinking decisions eventually uncovered opportunity. I used those principles to make my first investment (also my first real estate purchase in general) in the difficult Boston area market. It took me about 3 years to find the right place - seriously, I looked with intention of buying for 3 years! I found a 2 family, that with moderate work, is bringing in $30,600/year on a $270,000 purchase price. Pretty good for the area and market I think. Soon I’ll put about $50,000 into renovating the barn for a 3rd apartment that will bring in an additional $900 per month. That’ll be $3,450/month on $2,500/month including taxes, insurance, and the refinanced mortgage for the barn apartment.
I think that knowing your area is priceless for making creative purchases in a tough market. I knew that my town had a special by-law for barn renovations that allowed additional apartments. That brought my deal “from good to great”, at least for my expectations.
I also believe that by ‘investing local’ we intrinsicaly help to create better communities while at the same time profiting more for ourselves in the long term. We get to know local players. I’m trying to develop a relationship with a local private school where I can get connected with teachers looking for housing. If I can be a go-to-guy for quality apartments, I can spend money to keep the up, be proud of them, and charge higher rents. If I were to move all of a sudden and buy in an overall better cash flow area, I may not have such good luck wih tenants.
I realize this is nothing new to most people here, I just thought I’d run with it for a couple of paragraphs!
SFH’s and Double’s are great investments to start with. Indianapolis this past month was #10 in the US for foreclosure. Meaning 1) lots of great deals on the market and 2) lots of people needing a place to live
GA was #4.