BiggerPockets Real Estate Podcast - 840.5: The 8 Best Housing Markets in The US For Low Prices and High Cash Flow

Episode Date: November 6, 2023

We’re about to show you the eight best housing markets you’ve never heard of before. If you want boring, unsexy markets that give you mailbox money every month, have growing populations, cheap homes, and strong economies, bring your notepad because you probably haven’t thought of any of these markets before. We sent our On the Market researchers on a quest to find the country’s most boring, underrated, yet promising rental property markets—and we’re sharing the list with you today. From college football towns to underrated beach cities and strong manufacturing centers, almost all these cities have cash-flowing real estate where you can find steals and deals easier than already-tapped markets like Miami, D.C., or Denver. Some of these markets are on the smaller side. Still, with housing affordability tanking, these cheaper states could see a massive influx in population as coastal workers seek financially stable inland cities. So, if you’ve been saving up to buy your next deal but can’t find anything worth investing in around your area, check out ANY of these eight markets because if you don’t buy in them, we will (and Henry already has)! In This Episode We Cover: Eight boring, stable, cash-flowing real estate markets you can invest in NOW The East Coast beach city with MASSIVE population growth and cheap home prices The college football towns where you can make a killing on student housing Staying away from single-industry markets and what happens when employment starts to fall The state pushing for zero percent state tax that could see a significant population boost The growing city where Henry is gobbling up rental properties as fast as he can And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Forums BiggerPockets Agent BiggerPockets Bootcamps Join BiggerPockets for FREE On The Market Join the Future of Real Estate Investing with Fundrise Connect with Other Investors in the “On The Market” Forums Subscribe to The “On The Market” YouTube Channel Dave's BiggerPockets Profile Dave's Instagram Henry's BiggerPockets Profile Henry's Instagram James' BiggerPockets Profile James' Instagram Kathy's BiggerPockets Profile Kathy's Instagram Get on The Waitlist for BPCon 2024 in Cancún! The 4 Most Affordable, High Cash Flow Real Estate Markets of 2023 These Are The Top 20 Up-And-Coming Real Estate Markets Click here to listen to the full episode: https://www.biggerpockets.com/blog/on-the-market-155 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets real estate podcast for this bonus episode. What's up, everyone? My name is Dave Meyer, and today I am bringing you an episode from my podcast called On the Market, if you haven't heard about it. We created an episode recently talking about markets where deals are relatively easy to find right now. We all know that cash flow, it's gotten a little bit harder to find over the last couple of years, and some markets continue to do well, but some,

markets are correcting. So the on the market crew did a lot of the work for you. We found eight markets that have really strong fundamentals for buy and hold deals. Now, if you're looking for sexy markets, you're probably not going to find any of them on these lists, but these markets actually offer strong cash flow. They have great fundamentals like population growth and strong economies. And a lot of them are still appreciating. So if you're looking for a market where you can find a great deal in 2024, you're definitely going to want to listen to this episode. And if you like this kind of up to the minute market-based content, make sure to check out our podcast on the market.

Before we get into the episode, I do have a quick tip for you. And it's if you like one of these markets or if you're considering investing out of state or even nearby, there is no better way to get to know a market than by networking with an experienced investor-friendly agent. Bigger Pockets makes that super easy for you. If you just go to biggerpockets.com slash agent finder, you can enter in a little bit of information about yourself, your experience, your budget,

and you'll get matched with an investor-friendly agent completely for free. And that can help you get one step closer to your next deal and to financial freedom. So just go to biggerpockets.com slash agent finder to check it out. Hey, everyone. Welcome to On the Market. I'm your host, Dave Meyer, joined by Kathy Fecky, Henry Washington.

James Danard, fresh back from BPConn, 2023. Now, today we are going to get into a really, I think, helpful topic for a lot of people. We're going to be talking about a boring old strategy, long-term rental property investing, and we're going to identify eight different markets where you can still find cash flow. They also have really strong fundamentals like population growth and being under the median home price for the United States right now. And so these are markets that honestly most investors can get into. So hopefully this information will help you if you're sort of stuck trying to figure out

how to invest in 2024. We have some markets and strategies that are going to work for you. Before we get into this, all of these markets, the eight markets that we pulled, have to be under the median home price in the United States because at least if you think agree with me and a lot of us on the show, affordability sort of reigns right now. I want to quiz you all about what you think the median home price in the country is right now, according to HUD, the Housing and Urban Development Department. James, so what do you think the median home price is in the U.S. right now? You know what? I think last time I checked, it was around $410,000.

But that was a few months ago when I looked, but $410 to $415,000, right in there. Henry? $475,000. Ooh, Kathy. I'm just going to go with a clean 420. Classic California answer. Malibu lifestyle. Kathy, you won, though.

It's 430,000 according to HUD. And these estimates, just so you all know, they vary a bit based on the source. So HUD has won, Zillow has one, NAR has another. But they're all, from my observation, between about 400 and 440 right now. and that is up somewhere between 1 and 3% year over year. And so when we get into the eight markets, we're covering today, all of them will have the median home price under. And I think all of them are like pretty well under that mark.

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Amazon gift card. That's bill.com slash bigger pockets. All right, James, kick us off with your first market. And again, just to remind everyone, these are markets that we think work for most investors, even in a high interest rate. somewhat riskier environment like we're in right now because they are highly affordable. They have great fundamentals and they offer cash flow. So, James, what's your first one? All right. So I'm excited to talk about this one because I was just there.

Like I was on my conquest of the Carolinas and I was checking out North Carolina, South Carolina, all the coastal communities. And my first market I want to talk about is Myrtle Beach, South Carolina, which, you know, I was there with my daughter and my family. We had an absolute blast. She got Hannah tattoos. Great time. But more importantly, it's a very solid market to look at.

And, you know, what we've seen is we've seen a lot of these coastal community towns, the vacation towns, people, or, you know, after the pandemic, people have just been kind of like, forget it. I'm just moving to where I want to hang out and have fun. And this is one of those towns that people have been moving to. It is a very, very strong investing market. The average home price is at 336. So it's below the median home price.

It's got growth. I feel like it has growth. and it could easily get to the meeting home price over the next couple years. And the population is growing. It is grown nearly 4%, 3.87% year over year. It is that whole pandemic lifestyle. People are like, I want to live where I want a vacation, I think, and it is growing. And I don't blame them.

When we were there, the beaches were awesome. The weather was great. It was very good people watching on the strip. Had a good time. So I think people have learned that they want to live where they want to live, and that's why it's growing so much. And as far as an investor goes, you know, back to that 1% rule. We all know about that 1% coverage rule, and it's been very hard to achieve the last

couple years with the pricing going up and then, you know, interest rates are helping a little bit. And it's kind of became an outdated metrics, but it's close. It's at 0.67%. It's closer than most market is to get you to that 1% rule. So it's got high growth. It's got good income. And not only that, it's below the meeting at home price and it's a great place to live.

So based on quality of living, I think it has a lot further growth. And we're really seeing this in these coastal community towns. Nice. That's a great one. I just want to provide two points of clarification for everyone. First of all, population of growth of 4% is insane. The national average is about 1%. So four times the national average.

And James, I think in your research, you said that it was named the fastest growing city over the last year by U.S. News and World Report. So that is obviously strong fundamentals. Then I just wanted to follow up on the 1% rule that James just mentioned. What he's referring to if you haven't heard is something called the rent to price ratio. You divide one month of median rent by the median home price for a given market. And what you get is usually somewhere between 0.5% and 1.5%. And back, you know, in 2010, 2012, some investors came up with this rule called the 1% rule where you had to get it above of 1%, which signified that you could probably get great cash flow. Now, we all know it's not 2010 anymore.

And so finding markets that average 1% on that rent to price ratio is exceedingly rare. There are probably less than 10 in the entire country. That doesn't mean that you can't find cash flow in these markets. You still can because we're in a different type of market environment. And I've actually done some research into this. And if you have a rent to price ratio of anywhere from like point. 0.6 to 0.7 or above, there is usually cash flowing properties in that city. Now, remember, if I'm saying that the rent to price ratio for that market is 0.6 to 0.7, that is the average. So that

means there are deals worse than that, and there are deals better than that in that market. And as an investor, it is your job to go find the ones that are better than the average one. So just when we say a rent to price ratio is 0.7%, go out there and find yourself the 0.9% one, because that means that they exist there. So I just wanted to go on that. a diatribe and explain those things. But Kathy, I think you had something to add here. Oh, I just wanted to say I had to rewrite my book because of that 1% rule. People were like, I'm not going to buy anything because I can't get it, but I wrote that in 2014. So I had to revise it, came out with the new one. We are actually getting 1% in our fund, but that's active.

If you're an active investor, you can probably still get it, meaning you're buying something that's not very expensive or you can improve it and still get it way under market. But their strong rents. It's just not easy to do, especially if you're investing from afar. That can be difficult to do unless, you know, you're someone like Henry. He's probably finding that, but it's probably harder. Anyway, Myrtle Beach. Back to that. Love Murtle Beach. The southeast is my jam. This is so underpriced. The entire Southeast coastal market is so cheap. Find me somewhere in California where the medium price is $336,000 for coastal property. Like, it doesn't exist. So that's why it's growing so quickly. And the Carolinas specifically,

they're kind of referred to as the boomerang states because a lot of times the northeastern people who are just done with cold weather and they're able to retire or live remotely, they'll go to Florida and then sometimes think, wow, it's too hot and too humid. And so they boomerang back a bit to the Carolinas where it's a little bit less hot. and humid and still so affordable. Darlingtown, I surfed there when I went to check it out. It's still so affordable, considering what we just said, that the immediate home price in the U.S. is higher than that, and you could get coastal property in a really cute town. I mean, it's great. I don't invest there, but I can see where that would be a great opportunity.

Yeah, and the beaches are awesome. I know we're talking about unsexy markets, but definitely beaches are stack full of good looking people. I don't know how that works for investing, but it's a bonus. It is growing. The rents are up 33% over the last three years. Like it's, I mean, it's a growing town. It's quality living. And it's fun to go to.

So I definitely will be back. I've always wanted to go because I've heard there's great golf there. And I'm not great at golf, but I enjoy playing. So maybe that is not true. We golfed. Dave said he didn't golf, and Dave crushed the ball all day long. I was lucky I was paired up. Very, very inconsistent. But James and I played two other investors, and we crushed them.

So that's all that matters. Crushed. All right, James. What is your second market that you're bringing us today? So the second market is Tallahassee, Florida, which I have never been to. To be honest, I don't have a whole lot of desire to go there unless it's for an FSU football game. I think that would be pretty fun. But it's a very affordable market in Florida.

And as we know, Florida has gotten very expensive. And it's been hard to get cash flow in a lot of these locations. You know, pricing's way up in Florida. It's hard to make deals pencil. But there's still a lot of good markets around like Tampa, Tallahassee, that you can invest in. And what I like about it is the average home price is 272,000. So it's really, really affordable. And as these rates keep staying persistent and the money seems like it's going to be a lot

higher than we thought. You know, a lot of us were predicting that the rates were going to be down middle next year. That might not happen. It's a good market to be looking at because the pricing is so below the median home price and the quality living is really good. So it has some runway, in my opinion. The population growth, not as strong as Myrtle Beach, doesn't have the same trend. It's 0.72%. So it is growing below the national average. I don't really like that as much, but it does have steady growth. And then the overall investment, but I think there is other potential here.

The rent of price is at 0.54. So it's below Myrtle Beach, half of the 1%. But like Dave said, that's the average, and who wants to be average? You can find value in any market, but I do believe that this market has growth potential because it's so affordable. The quality of living is good.

they would rank the ninth best quality of living in Florida. And so people do want to live there. In addition to, there's a lot of college there. College towns are great for steady rent income. And as college pricing and the cost of college goes up, so will housing. They're going to go up one and the same. We've seen that in our Seattle market. We own a lot of rooming houses.

So I do like college towns. I like the quality of living. I think it's very dependable for an investor to be looking at. Yeah, I like this. because of, I just think college towns are great investment areas, especially when those college towns are surrounded by other major metropolitan areas. And so Tallahassee definitely takes those boxes. People think of Florida State when they think of Tallahassee, but you've also got Florida A&M University and a host of other small universities that are out there. And so you've got a large student

population, you've got, that means the universities are employing a large percentage of the people who are working there. And so housing, affordable housing is needed. And when you can get property in a college town, like the average home price, like retail is 270. Like that means if I go in there and start looking for deals, I'm going to be buying stuff for sub 100, just over $100,000 for, for properties, because I want to get really good at finding good deals. And so going out to a college town and buying a property for between 100 and 150 grand and being able to get the rent you're looking for because college students need a place to live, man, that's a dream. Knowing what I know about being a tenant in a college town has always scared me away

from being a landlord in a college town. But what you're saying makes sense. And I think they rage at FSU. I heard they like to have a good time. So you're going to want to get bulletproof rental specs. just make sure it can handle the durability. Yeah, I went to a pretty nerdy engineering school, and we destroyed properties. So I can't imagine what it would be like at FSU.

All right. Well, it sounds like a very interesting market. Again, yeah, so it sounds like, you know, Myrtle Beach has growth potential and a bit more cash flow. Tallahassee, maybe lower cash flow potential, still possible, but might have more room to run because it's really just very affordable in a state that is absolutely. booming right now. Yeah, I think the equity can grow a lot quicker, and that's going to make a big difference in your overall return. And if you can get that equity growth, that will offset your cash flow

that might be a little underperforming. 100% in Myrtle Beach for sure, but I think also in Tallahassee, you might look at short-term and mid-term rentals. We actually have a college in my town, and what I've noticed is that a lot of parents want to come and visit their kids. And so having a short-term rental, you're still kind of getting the benefit of having students in town, but you have parents living in the rental if it's a short term. If you've got a big party house, Dave, like you do in a ski area, well, then your short term rental might be a party house. But if it's little, just enough for the parents, that can stay rented. All right. Well, moving to another state that is absolutely booming. Henry, what's your first market? My first market is Jonesboro, Arkansas.

So this is a town maybe not a lot of people have heard of, but the numbers are kind of ridiculous. So check it out. Average home price of $188,000. So you're sub 200 on the average home price. So now we're talking retail, which means if you're looking for deals, you can get screaming deals. You're talking sub $100,000 finding good deals out there. That's crazy. But population growth is 1.29%.

So people are moving there. And that's due to the economy. It is an economy that hosts a lot of manufacturing. So that's what's most of the workforce is doing out there. So you've got Nestle, Unilever, Brito Lay, rice food and a couple others. But as well as healthcare is big out there. So you've got a couple of big hospitals that are also employing a lot of the people out there. And so you've got, Population growth, you're not far, you're not too far from Memphis. And so you're, you're not too far from a major metropolis. You've got unemployment at 2.9% and your rent to price is 0.74. So there is cash flow. And if you think about it, I was looking, the average rent for a two bedroom or for a three bedroom is just over $1,000. So if you can get a deal and find, and get average rents, then you're going to be able to cash flow, especially if you're finding a really good deal in this market. The other thing about Jonesboro is the vacancy rate is 6.7%, which means most everything is getting rented. Wow. So it's just, it's got all the, it's got all the right stats. Definitely, definitely really good numbers. I'm surprised because I've gotten leads for deals in Jonesboro and I've turned them down just because of how far it is proximity wise to where I live in Arkansas. And now I'm thinking I might need to take a second look at some of these leads

I'm getting out in Jonesborough. Okay. So this is not Northwest Arkansas. I'm looking up on a map right now. This is northeast Arkansas. North East Arkansas. Yeah. Okay. And as you mentioned, closest major city is Memphis is actually quite close to Memphis. Yeah. Yep. As he said. So Henry, knowing, you know, do you hear about Jonesboro? It's like, is it a big town? Yeah. Like, is it a place it's commonly talked about in Arkansas? Yeah, people talk about it all the time. I've just avoided it because of how far it is for me. It's about a, I'd say, a five-hour drive from where I currently invest. And so I just like to be able to get to my properties. It's just a personal thing for me. But, I mean, the market dynamics sound pretty good. Like I said, I get leads all the time coming through my website

from this area and I just pass them on to investors. I know that invest out there, but I'd never looked into it until this. This is cool. I mean, a market that is under 200,000, so less than half the median home price, population growth is above the national average. The unemployment rate is below the national average. It has really good rent to price ratio. I mean, those are pretty tough to find these days. This is pretty good. Pretty solid. I'm sold. You know what also sounds nice? Is the price, a problem, 100 grand. That is like our earnest money check. We have to write 100 deals. It's like, Like, Kathy, I think we're doing, we might be doing this wrong. I'm like, I'm listening to this.

I'm like, why not go out of state, you know, but you got to get outside your comfort zone when you get to long distance investing and you got to set up the right systems. And it's hard when you're, like Henry says, I'm a backyard investor too, like looking at these markets, but the math is saying that you should really explore it. And it's for investors to figure out the systems that's going to work. And so as these markets are getting more and more affordable compared to what the other markets, it's something I think everyone should be looking at. Yes, you have to set up new systems,

but those are great metrics to get good cash flow. And also, it allows you to invest very low risk. When you're buying properties at $100,000 and they sit vacant for a little bit, you can stomach that hit. But when you're dealing with expensive stuff and expensive metro right now, you really have to make sure you're on it or that debt cost, that vacancy cost, all these things can compound. And, you know, I definitely think I need to get some operators in different states and just start partnering up. It's 100 grand. That would be nice. What's your earnest money amount? Like, 1,500 bucks? That's awesome. Oh, man. The grass is always greener, right? We look at James, like, but, but you make hundreds of thousands of dollars on one transaction? And they're so sexy.

You'd have to do 10 deals. Yeah. But you can also lose 100, that thousands of dollars on one transaction. This is definitely my kind of market. I love that it's kind of off the radar, but it's got all the, all the things that you need in a good buy and hold market. So, yeah. Hey, Henry, James, you guys set something up there. I will be your buyer. I got you. Ditto. I got you.

Yeah. All right. Well, Henry, you got another fire market for us next? Yeah, this is a market that I actually currently invest in, Joplin, Missouri. So this is about a 50-minute drive from Northwest Arkansas where I live, and I currently invest there. I have seven doors there now, and I have another 16 doors under contract there now. So I am growing my portfolio in this market.

And why I'm growing my portfolio in this market is because of these pretty strong market dynamics. So average home price is just over $200,000 at $205,000, $206,000. It's got population growth of 1.1%. Now, I know that's not, you know, it's not the highest population growth on this list. But for a small market in southwest Missouri, that's pretty good. Low unemployment, 3% unemployment. And rent to price is at 0.65. And I'm buying cash flow deals in this market left and right.

I just closed on a house in Joplin two days ago. I paid $67,000 for the house. I'm going to put $30,000 into it. And it is going to rent for over $1,500 a month. Wow. And it has an extra lot next door that I'm going to either be able to sell for about 15 to 20 grand, or I can build a new construction home on because so many builders are building homes out there to infill because there's not enough homes for the people who live and work in that Joplin market. And so I love Joplin.

Another reason I love Joplin that you're not going to hear about or see about if you just kind of do the research on your own is because it's about a 50-minute. drive from Northwest Arkansas as Northwest Arkansas is expanding because of all of the big companies out here, a lot of people are starting to feel like, hey, this is becoming, you know, a little bigger and busier than I like. And people are starting to spread out and go a little further out. And so I think that that's driving some of the population growth in the markets like Joplin as well. And so you've got people moving there trying to get away from the hustle and bustle of Northwest Arkansas. If you can even say hustle and bustle in Northwest Arkansas in the same sentence. But that's So I really, really do like this market and I am growing and expanding in this market because of the solid dynamics.

As far as the economy goes, this is another manufacturing town. So there's lots of different manufacturers out there. You've got general mills out there. But it's a really, really big health care community. So many hospitals. There's a St. Johns. We've got Ozark Medical.

There's mercy clinics. There's tons of different health care out there as well. So it's a really solid market with solid market dynamics that's growing steadily, not super fast, but growing steadily. And you're just getting a lot of quality tenants because they have good jobs and they can actually afford the rents in the market. I had never heard of Joplin before the show Barry on HBO if anything to watch that. But I've long liked the idea of finding like a tertiary city outside. a main area that's like 50 to 60 miles away. When I was investing primarily in Denver, you saw Longmont, which is like a city where

Colorado State University is, but no one invested there. And like Denver just got so hot. Like to Henry's point, people just wanted to move somewhere a little quieter, or maybe somewhere even more affordable. And these places that are sort of, they're not like satellite cities, but it's nice to be close to a place with a big airport, for example, or be able to go to a big city within an hour, hour and a half drive, but has more of a small town feel. So I've always just sort of liked that approach. And it sounds like Joplin fits the bill for that strategy. And look how

wired Henry is on the market de-invest in. Talk about market research. He generally, passionately loves the market. He knows everything about it. You know, a lot of times people are like just going and buying that thing because they were told in a book or a podcast to do it. But Henry really tug into the market, knows it like the back of his hand. And that's why he's, he can grow is because he knows it. He believes in it so he can invest kind of carefree. So kudos to you, Henry. I mean, you definitely have this market down. Thank you, brother. All right. Well, I'm going next. And my first market is somewhere I've never really even been close to, but it is Tuscaloosa, Alabama. And the average home price there is 211,000,

so less than half our median home price. Population growth, 1.4%, so just over the national average. And just as we're saying, like, I think any market that's growing is pretty good, but it's always nice to be above the national average. The unemployment rate is at 2.4%. And the unemployment rate is pretty low everywhere in the country right now, but 2.4%'s about 30% lower than the national average. So that's great. And the red to price ratio is excellent at 0.8%. So I think this is really strong fundamentals for Tuscaloosa. Now, I looked all this up because I've never been here. But it is a lot of, but it is a very strong. a small city. It is a college town, which we've just been talking about the benefits of. The University of Alabama is from there. So a Stillman College and Shelton State Community College, which contribute about $3 billion of economic impact to the area, which is about 25%. So that's really interesting. Normally, I always like to say, like, you want to look for an economy that's well diversified. But when you have an economy that maybe feel free to disagree.

with me, that is based on something really solid, like a college or public sector jobs that are really stable. I think that is a relatively good foundation for an economy. So I really like that. Tourism has really been picking up. They also have one of the biggest, or maybe the biggest Mercedes-Benz assembly plant in the country. So there's a lot that's probably leading to that really high employment rate.

And that's all I know about Tuscaloosa. Have you guys, any of you ever been there? I have. I went to an Alabama Arkansas football game a few years back. Oh, how awesome is that. And it was, I mean, it is like, it's a thing. Like the whole, the whole everyone is there. So jealous.

There's the everything else is closed. It's only the stuff at the college that's open. It was just this super intense environment. But to kind of piggyback on your point, like when, you know, this is, this represents about 25% you said of the economy there. Like I think that that's okay in this situation because Alabama's not, University of Alabama is not going anywhere. Like those people would start a war.

If their fans are very passionate. If that school went anywhere. Like it is, it is safe and sound there. But no, it was a great place. I enjoyed it. It didn't feel that small to me.

You know, I was surprised to see it's only 100K people because it felt, much bigger than that. Well, I think a lot of times these college towns, they don't count students because they're not full-time residents. I know like Boulder, for example, Colorado, where the University of Colorado says it's like 100,000. And then when students are there, it's like 140,000. So it goes up by like 40%. I'm sure, I bet Alabama's even bigger than soon. Yeah. But it makes you think, like, based on what you're saying, Henry, that like, in addition to student rentals, short-term rentals probably do really well if people, if it's that big of a draw and people are coming for

for sports, among other things. You know, the university obviously has other draws. I actually saw that they just broke ground on a $50 million performing arts center at the university. So there's obviously a lot of attractions in the area that might warrant different types of rental strategies. Yeah. And I think that's a good call out too about the short-term rentals.

Because one of the things I like about my market, which is a college town as well, where University of Arkansas is, is there's just, there's not a ton of hotels. Like, there's a few. There's definitely not a bunch of nice ones. And so when you've got football season and people coming from all over to come to these football games, they've got to have a place to stay, the hotel sell out super fast. And so, like, these towns need Airbnbs because their economy is dependent on these people coming to visit. That's such a good point. That's why I like these sort of off-the-radar markets because you don't have builders flocking to them. They don't even know they exist. So you're not seeing new hotels and new homes. But when you're

seeing the kind of growth, population growth that this area is seeing, yeah, it's going to be good for short-term, medium-term, long-term. It seems like either way you go, you could make it work in this market. Definitely. Just make sure you have a big enough parking lot for people to tailgate in at your short-term rental. I wonder how much of the average home price, Nick Sabin's house drives up that number. Add like three zeros to that number. I think we should do, we need to explore the market and do a live podcast at a football game like the college football set up. Oh, that would be so awesome.

We could put one of those school, school mascot hats on you when you. I'm 100% in. Well, my next market does have a college in it. It's the University of Wisconsin-Ashkosh. I don't know if they have the same level football. ball team as the other ones that we've been talking about. I feel like you just made that up. I actually did.

It's a real thing. But the next market I have is Ashkosh, Wisconsin, which I have only heard of because as a kid, did you guys wear Ashkosh overalls or Ashkosh Baguash? Yeah. It reminds me of Chuckie. Yeah. Yeah. Exactly.

Yes. So Ashkosh, I've learned, is a really interesting town. It actually used to be known as the Saucosh. dust capital of the world because it has the most sawmills, I guess, in the world. No longer, but it did at one point. But really, they actually have really strong fundamental. So just to go through the stats, average home price is 265,000. Population growth at 0.9%. Unemployment rate, 3.5%. And a rent-to-price ratio of 0.6%. It's a small city of 67,000 people. But I started looking at this because I don't know if you guys have seen this, but when you look at lists of places with hot housing markets, even during this weird market we're in, Wisconsin is like one of the places that's always up there.

Obviously, you see a lot of places in the southeast, but Wisconsin consistently for like a year or two now has been up there. And so I looked into it. I literally just Googled why is everyone moving to Wisconsin and found out that there's just a lot to like about it. and really ranks high in terms of education, in terms of health care and health, one of the highest states for quality of life and safe places to live. And so it seems that a lot of people are moving to Wisconsin. And I think Oshkosh is sort of getting swept up into that. So sort of in our theory of auxiliary cities, you know, near big cities, maybe like near Milwaukee or Madison,

Oshkosh is near those and also near Green Bay. And so it might be one of those secondary cities where you can get cash flow now, but in a state that seems poised for growth given the recent trends. Wisconsin obviously is one of the hottest cities in the entire country, Sheboygan, Green Bay. It's near all of those. So it's kind of sandwiched in there and could sort of benefit from the tides that are raising all of those ships, so to speak. It's also on Lake Winnebago.

It looks very beautiful from the pictures I saw. So I really don't know any more about it, but it seemed like an interesting market. I'm like picturing a Lego town where everybody's wearing Oshkosh walking around. Everyone is a train conductor. Everybody's a train conductor. Is that company still in business? Oh, they've got to be. I bet it is.

It's timeless, dude. That does not go out of style. Yeah, I hope not. Well, I would go check it out. I've only been, I've been to Lake Geneva in Wisconsin. It was very beautiful. So I'm sure it's really nice up there. So there is a lot of smaller cities in that Wisconsin, Illinois kind of region that are growing right now where you can get amazing cash flow, like places like Racine, Wisconsin, which is like smack in between Milwaukee and Chicago, which is perfect because as those cities spread out and affordability gets worse there, you can buy duplexes there for, you know, 150 grand.

and cash flow them. It's insane. And on the lake. Really nice. Great dynamics out there. All right. Well, that turned into an advertisement for the entire state of Wisconsin. We've barely been to, but on paper, it looks very good. All right, Kathy, what about you? What's your first market? Well, I started to get a little like hair standing up on my arms or whatever when I saw this one because I don't like investing in. in places where it's really dependent on one economy, specifically oil. As you know, my heartbreak story buying in North Dakota. So, Odessa, Texas, it's in the Permian Basin. There is a lot of oil there, so that's good.

There's a couple of employers there you might have heard of Halliburton, Schlumberger. These are massive oil companies there. The average home price is $212,000. so that's below, far below the average. Population growth, not so impressive, 0.64%. Unemployment rate, 3.8% though. I looked at other sites and some said it's not, it's much higher than that. So, again, it's hard to get the actual information.

Zumper said that rents increased 17% year over year, maybe in certain areas. That's the thing about these oil towns is it's really volatile. And right now, you know, right now, I don't even know where, where prices are and oil just goes up and down. But I know the Permian Basin is doing better than North Dakota. But here's right off the bat why I would not personally invest in this area, 114,000 people. In the whole Permian basin, it's 500,000. I like to be in larger markets. I like to have a larger rental pool. So to me, it's just too small of a market, too dependent on one economy that is an economy that is manipulated by not America. Well, also America, you know,

depending on politics, it's manipulated, but then you've got, you know, its oil industry is manipulated in general. So I don't like it. I wouldn't invest there. With that said, I bet people are making a ton of money investing in this town. So just like you said earlier, if you know your town and you know where to buy and you know where the jobs are there to stay, you're going to do just fine. and the price point's right. Just to clarify, the way that we came up with this list is we came up with criteria, which is under the median home price, population growth, a good RTP above the national average, unemployment rate below the national average. And so what happened was our analysts of Bigger Pockets pulled that data and we were each assigned to look at one. So Kathy is presenting this,

but that does not mean she is endorsing it just to clarify. And like I said, You could make money in any market. So, you know, you don't have to worry so much about being in the right market if you know how to buy the right real estate. You know, I know there's locals in this market who are killing it because they know. You know how I know Kathy's not into this market because she's saying it wrong. Because if you're into it, it's not oil. It's old. It's old.

That's right. There's an old town. There's oil money out there. Yeah. Does that mean you've been down there, Henry? No, it just means I live in the South. But that is something to look for, you know, as the energy, you know, we're seeing a lot of different global things going on right now.

There's global conflicts, there's supply chain issues, a lot of these major countries. We're not getting along with a lot of major countries that do supply a lot of oil, and the U.S. might need to start generating more energy. And that could be some runway in these oil towns. Oil towns, Henry. There we go. Are you saying I should hold on to my land in North Dakota for the day that someday we decide that we might need to have some oil here? Do you have minimal rights?

Just hang on. Okay, because you said so. You'd be like the Malibu Hillbillies. All right. Kathy, was your second market we assigned you a little bit more inspiring to you? Yes, the second market is more diversified. It's a very good, in my opinion, stable cash flow market. at Oklahoma City, Oklahoma. This is a market where if you just want cash flow and no surprises and

not a volatile market, it's going to be here. I know a lot of people who have invested in Oklahoma City and have been happy they did. Population growth is just so-so, 0.94%. So about average. Average home price, $2,000. That's way below what we saw in the median. And you can probably make the numbers work there. Unemployment rate, 3.2%. and the rent to price ratio about 0.6, but again, if you buy right, you can do better than that. Rent growth, unfortunately, has not been too impressive in Oklahoma City this past month down 0.3%, but year over year up 0.3%, so flat. Let's just call it flat. But that may be because in 2022 rent growth was massive, one of the most and highest in the country, actually, 24%. So

something happened there during, I would call it. call it a pandemic. So rents went up massively. But that means that you can't look at the past. You've got to look at what's next. And with rents going up that much so fast, it may stay flat for a bit so that wages can catch up. But one of the issues is lack of housing and lack of affordable housing that we're seeing

everywhere. So if you are interested in more Section 8 housing, apparently there are 30,000 people on the wait list for Section 8 housing in Oklahoma City. And that can be a great investment, right? Steady income from the government. 330,000 new jobs created over the past decade. So supply is low, but demand is high, which is why 40% of residents say they much rather rent than own

because owning just doesn't make sense for them right now. So a strong rental market, very diversified. Now, I like to be in markets where there's going to be, a boom of some kind. I don't want a boom market dependent on one thing, but I do want something that's going to make it boom. And something that might make that happen and is very exciting. And one of the reasons why our new rental fund is in Oklahoma is the governor is pushing to get the state income tax to zero like Texas to compete with Texas. If that happens, I really think we're going to see quite a boom. Interesting. Yep. So I love Oklahoma City. It's another sleeper market

because it is a major metropolis, but you can still get like smaller city economics there, smaller city numbers there. Also, there is a little bit of a tech boom happening in Oklahoma City. Lots of tech companies are opening offices there. And so there's lots of tech jobs, which bring in younger, younger employees. And so that creates growth over time. They did lose a lot of people to the Texas or Dallas area during the pandemic. A lot of people moved over to Texas, and that may be what's pushing some of this for trying to get to the zero income tax like Texas there. But it's also not only technology jobs, but it's the home of, it's the home office for Sonic, for Sonic, the fast food restaurant. So there's lots of good stuff happening there.

I've never been to Sonic in my whole life, and it's one of my biggest regrets. Oh, the food isn't worth it, but the drinks are great. I just, the commercials of those two guys. hilarious. Seared into my brain for the rest of my life telling me to go to Sonic. Yeah, I've known a couple people who invest in Oklahoma City and actually some of the cities around it and it just seems like an excellent place. Like there's just not a lot of downside or risk that I say. It just seems like pretty strong fundamentals everywhere.

Just tornadoes would be the risk and you know, you have insurance for that. Just tornadoes. Just tornadoes. Something never having lived in the Midwest or the South have ever thought about. But yeah. I mean, it's about an hour and a half west of Tulsa, which is another decent market for cash flow and then about three hours from here in northwest Arkansas. So, I mean, it's not, it's a, I like it.

Cool. All right. Well, those are our eight markets. And again, what we're talking about here is markets where even during a confusing market where some markets are going to do well, some markets are not going to do as well, we think these eight markets offer strong potential. there are no guarantees, but strong potential to do well over the next year, even as affordability is low.

And there are some questions about what's going to happen over the coming year. And as we talked about a lot at the Bigger Pockets Conference, you know, if you're going to be an investor, it's okay to change tactics. It's expected to change tactics based on what's going on in the economy. But at least for I know the four of us and for many of the people I talked to there, what people are not planning to do is to just stop investing altogether. It's to try and figure out, like Kathy said earlier, what is working in this market and adjusting your strategy accordingly. So we hope that this is really helpful for you.

We'd love to hear from you in the comments or reviews. If you invest in any of these markets, tell us a little bit of more about them. Obviously, if you're listening on YouTube, you can put those comments in there as well. Specifically, Ashkosh. Is that still a thing? Is there, can we still get overalls? Yes. We want to, next episode, we're all going to be wearing Ashkosh, baghosh overall.

and going to Oshkaw. Really? Okay. I mean, the minions still wear it. The minions still rock Oshkosh. We love minions. All right. Well, thank you all so much for listening. We really appreciate it. And we'll see you for the next episode of On the Market.

On the Market was created by me, Dave Meyer, and Kailen Bennett. The show is produced by Kailen Bennett with editing by Exodus Media. Copywriting is by Calico content. And we want to extend a big thank you to everyone at Bigger Pockets. for making this show possible. Thank you all for listening to the Bigger Pockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday.

On the host and executive producer of the show, Dave Meyer, the show is produced by Ian K, copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing.

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