I lived in Houston for 25 years, through the “oil bust” when properties lost 1/2 their value in 3 years!!! Including the ones I owned!
For the past 4 years the only place I’ve bought has been the town that I live in (population 5,000), the little town across the lake (population 1,000) and another town 12 miles west (population 2,500).
Right now the MLS listings show properties from between $35,000 and about $1,200,000). There are “we buy houses” ads in the weekly newspaper and occasionally I’ll see bandit signs.
One thing that keeps the “quick flip” and L/O guys out is that in TX we’re lucky to see appreciation of 2%-3%/year. Not much equity to work with in this situation. Since we have real high property tax and insurance rates it’s difficult to get rentals to cash flow. Most guys that tell me they’re “cash flowing” are getting terrible returns IMO.
I am set to graduate college in December 05 with a computer science degree. I plan on moving out of my town to get a job in my field. Luckily though, good programmers can can find a job in any decent sized city.
Recently I’ve been bitten by the REI bug and cant wait to start trying some of the techniques i’ve been reading about here on creonline.com.
I’ve decided to try to kill two birds with one stone. I’d like to find a programming job in a town where I can continue learning and start practicing REI. Also it seems to me most investors are tied to the town where their properties exist, so I’d like to make a good choice. If you could start over fresh knowing everything you know now, where would you go?
More specifically, my questions are these:
Is there a list of cities that anyone could recomend as a great place for someone to get started in REI? I’m looking for a town that is large enough for plenty of action, but not something super hot like Pheonix or Las Vegas.
If there is no such list, what kind of criteria makes a particular city “ripe” for someone who wants to get started flipping houses then work his/her way up to bigger deals?
what kinds of cities should I avoid like the plauge? Obviously places like Phoenix or La Vegas sound extremely overvalued, but are there other teltale signs that might indicte someone is going to have rough sailing in REI.
Avoid any place where you wouldn’t enjoy the terrain or the weather.
Pick a place where you would love to live.
If not sure, research, visit first, or move around.
Pick places that have a good long-term economic outlook/job growth.
The real estate deals will follow.
Curt: Just because people aren’t advertising in the paper doesn’t mean there’s no competition. I refuse to advertise in my local paper in Harrisburg because the results are not worth the price. Others are like that here - and there’s tons of competition. I thought the same way you’re thinking - until I started in REI. Anyway, I agree with dealmaker. However, I think Harrisburg, PA, is a great place to get started. Unemployment is low because it’s the capitol of the state. Also, it’s easy to find rehab properties that only cost $15k-$45k (and higher) if you’re willing to do the work. And people are moving back into the city!! As for computer programming? Sky’s the limit here. You could work for the state or any of a number of Forbes/Fortune/Whatever 500 companies in a 35-mile radius. Congrats on your pending graduation and best of luck to you!
The best town to get started is WHEREVER YOU ARE. No joke, REI can be done anywhere. Your points about LV and Phoenix are well taken, I’d probably avoid CA as well, but keep in mind, PEOPLE ARE MAKING MONEY IN ALL OF THOSE PLACES.
I’ve done it in 3 places now. Mid-sized city, Major metropolitan area and very small town. It makes no difference. They keys are:
1, know your market
2, have your ducks (dollars) in a row
3, be “action” oriented
When you say mid sized city, how big are you talking about? Right now I live in a town of about 50,000.
We have 1 main newspapwer and several “penny saver” papers. I watch them all very closely, and I have only spotted one individual placing “we buy houses” ads. I also have never seen a bandit signs or billboards any where in town. I am assuming (and please correct me if I’m wrong) that there must not be much business around here because:
1)there appears to be no intrest
2)there appears to be no competition.