BiggerPockets Real Estate Podcast - Where We’d Invest in Real Estate in 2024 if We Were Starting from Scratch

Episode Date: August 21, 2024

New to real estate investing? In the beginning, you’re drowning in recommendations of where to invest in real estate, especially in 2024. Everyone is shouting different markets at you, “Cleveland! Tampa! Cincinnati!” the list goes on and on. But here’s where you’ll get stuck: most beginners think ANY market is good enough for them, except that isn’t true. There are some unique markets that most investors don’t know about, and they could fit what you need perfectly. Today, we’re sharing these markets (and how to find them) with you. We brought on expert investors Ashley Kehr and Henry Washington to give their picks for the best places to buy rental property in 2024. All of these markets offer something different; some have low price points with significant cash flow, while others have huge appreciation potential. We’re sharing our top three rental markets with you so you get in before the rest of the investors hear about them. We’ll also give you the criteria to pick your perfect real estate investing market and share where we first invested and where we wish we had invested. After this episode, head here to get all the data used in this show, then find your market, tag @BiggerPockets on Instagram, let us know why you chose it, and win some free swag! In This Episode We Cover: Where to invest in real estate if you’re starting from scratch with zero experience The best places to buy rental property in 2024 that most investors are overlooking Moving to invest in real estate and the city with a VERY high salary-to-home-price ratio Real estate market risks that we steer clear of whenever buying rentals Finding your market “advantage” and how to thrive in new a market using your skillset And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Find Deals in Any Market with Henry’s New Book, “Real Estate Deal Maker” Find an Investor-Friendly Agent in Your Area See Ashley, Dave, and Henry at BPCON2024 in Cancun! Top 10 Real Estate Markets for Cash Flow in 2024 Connect with Ashley Connect with Henry Connect with Dave BiggerPockets Market Finder Real Estate Rookie Podcast Post Your Market and Tag BiggerPockets on Instagram! (00:00) Intro (03:02) Ashley's First Market (06:19) Would You Move to Invest? (10:38) Henry's First Market (13:41) Where to Invest in Real Estate (14:38) Ashley's 2024 Market (21:16) Henry's 2024 Market (29:47) Dave's 2024 Market (34:06) Find Your Market "Advantage" (35:45) The Dish Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1007 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

If you could go back in time to the beginning of your investing journey, would you change something? Or would you do it all the same? Unfortunately, we obviously can't do that. But I've been thinking about this question quite a lot recently. Because for me, part of the reason I started investing is because I was already living in a city, Denver, that was just booming. And I wanted to be a part of this growing city. And I kind of got drawn into real estate because it was so obvious that prices were going

to appreciate real estate was going to do really well in that city. But given the state of the housing market and the investing climate today, I've been thinking a lot about whether or not I do the same thing over again or would I start somewhere else? What variables would I be thinking about when choosing physically where I was going to invest? So today we're actually going to explore this question in a fun and a little bit of a different way. And make sure to stick around because we're going to be issuing a challenge to this community where you'll have a chance to win some free swag and a shout out to the rest of the Bigger Pockets universe right here on this podcast. Hey, team, it's Dave. And for today's Deep Dish episode, we're cooking up something cool for you.

I've been working with one of my teammates here at Bigger Pockets. His name is Austin on answering this question about what I would do if I were starting over. And we've been approaching it two different ways. First, with market research. So we pulled together a totally new, unique resource for the bigger pockets community use. It has a lot of housing market information, job growth, economic information that can help you look at sort of in a holistic way, what markets will help you build your portfolio most effectively. But we, of course, can't just rely on data. We also need perspective. And for that, we're bringing on Henry Washington and Ashley Care to join us to talk about how they would interpret this question and the market.

research, because the reality is there's no single right answer. Everyone's going to approach this conversation differently. You're going to learn a lot about how expert investors choose markets, what variables you should be thinking about, and you can even follow along. All of the market research we've compiled is available to the BiggerPockets community entirely for free. Just go to biggerpockets.com slash where to start, and you can download the data for free. And if you need any more information about your market, just go to biggerpockets.com slash markets. All right, we're about to jump in, but I do want to just call out what the challenge is. You're going to hear from me, Ashley and Henry, what markets we would choose, but we want to know which one you would choose

or which one you've already chosen. So if you're listening to this on the day it comes out on August 21st, go on Instagram, tell us what market you chose and why. You can do this in a real story, post, whatever, and tag bigger pockets. And we are going to shout out the people who we think have the best analysis. And we're going to send you some swag from bigger pockets. So make sure to do that. All right, let's bring on Ashley and Henry. Ashley, thanks for coming over from the rookie show and joining us today. Appreciate the time. Yes, I'm so excited to be here again. Well, I figured with a how I would start or re-envisioning sort of like if you could go back in time kind of episode, you would be the perfect person to shed some light. So looking forward to

your insights. And Henry, I guess I look forward to your insights as well, but thanks for being here. I will gladly take second place to Ashley. You know what, Henry, you're here for the good luck. You know what? I'll take that as well. Yes, we have handsome Henry, but of course he is actually a very knowledgeable investor. And I do, of course, want your insight as well. But actually, let's start with you.

Because the idea here is like if you were to start all over again, where would you invest? But let me just ask when you actually started, did you just invest locally where you were living? Yep. And it was where I was a property manager. And it was literally like one minute drive from the high school that I went to. So very, very comfortable and familiar with the area to get started there. And did you ever consider investing elsewhere?

So even to this day, for me, just going to another county seems like a big deal for me is learning all the rules and regulations, even just the closings, how they can be different. but I've pretty much stayed within 50-mile radius of a Buffalo, New York. And for your first deal, did you just pick the market and you were comfortable with where you were living because it fit your price point, because it allowed you to do the right strategy? Or is it just like, if I don't do it right in front of my face, I'm never going to do it? It was honestly because I started investing about three years before I found bigger pockets. the only investor that I knew was the guy that I was managing his rentals for. So I really just didn't know that you could actually go and buy property anywhere. I thought you had to pay cash

for property. I had this huge, limited mindset as to what could actually be done. So I just didn't even know that it was an option to go to any other market. And knowing what you know now, obviously you've come a very long way from that newbie status. But knowing what you know now, do you think investing in Buffalo was the perfect place for you? Or would you have considered a different market? I think it was perfect to get started in the small rural town I did just because I was so hands-on at first. I had no money. I had a partner that gave me all the capital to purchase the first property.

I was at the property every day when we did like this light cosmetic rehab. I was showing the apartments. I was a property manager. I would sometimes even do some maintenance. So having it so close in proximity, it definitely made me feel safe with my investment that I could be there to take care of things. Since then, I've realized that I don't need to be there and I don't go to any of the properties anymore. But I think it was a great comfortability for me. And I was very scared getting started.

Absolutely. And I totally resonate with that. I think everyone is scared when they first buy their property. And just because we're doing this episode where we're talking about picking market, Ashley's totally right. There's a lot of validity and a lot of reason why you may want to invest locally. Or I'm going to ask you a question, Ashley, because we were working on this data set. And one of the employees here at Bigger Pockets was saying that he was thinking about moving to a different location based on some of the information he's been uncovering as a Bigger Pockets employee. As the host of the rookie show and someone who advises new investors all the time, do you hear people do

that or do you think that they should do that like move to a different city because it will set them up because they can invest locally first of all and because it will like be in the right price point or the right strategies and like set them up for long-term real estate success i think if you aren't tied down with your job you can telecommute with your job so whoever whatever employees said that don't quit bigger pockets he's already remote don't worry so i would say that if you are okay with going. I think really the biggest thing moving to a new city is mindset. Can you be away from your family? Can you be away from your friends? Are you extroverted enough to go and make new friends? Are you going to move to the city? Be completely lonely, not talk to anyone

and regret your decision. But yeah, I would say definitely move for a financial decision. I mean, people make moves all the time and it may be not to another market, but it may be to a different house or to an apartment based off their financial situation. And people move to other cities for jobs all the time, like for your W-2. I feel like that's just a really common thing. So I'm just curious that that's going to become a popular thing. We see this really big difference in affordability, you know, places on the West Coast, for example, you talked about Seattle.

Like, those are super expensive places. If you can work remote and you want to be in real estate, like, maybe you should move. I don't know. That's obviously a huge life. decision. But I just thought it was super interesting to hear he's a relatively young guy, young investor. Think about doing something like that. Are you kidding me? You should absolutely do that. If real estate investing you see as a path to financial freedom, arguably, that should be more important than essentially what your day job is. Because if you're thinking long term,

right, the long term goal is to not have the day job, but you would move for a day job. Why wouldn't you move if you can keep your day job and then learn a market because one of the biggest strengths in investing in a market is your understanding of that market and there's no better way to gain an understanding of a market than just to go spend some time there and real estate a bit like short-term paying for long-term game if you're not tied down meaning you don't have a spouse and kids or if your spouse and kids are totally cool with moving and it's a safe place for you to live like out you should 100% you should do that you're going to get superpowers because you're you're your superpowers are going to be that you can build relationships in person.

You don't have to stay there forever, but you go there, you build relationships, you begin to invest, you begin to grow that portfolio. And then you can move to wherever you want when you're done. You can go pull a Brandon Turner and live on Maui. Like just, but yeah, absolutely. Well, I think we know a perfect example of this is James Dainard from on the market podcast who just moved from Newport Beach, California to Arizona. and a lot of that was financial.

I mean, the taxes he would have been hit with living in California greatly differ from Arizona. So even successful investors who've already made it, don't tell them, I said that, but already made it are making, you know, moves based on financial decisions. Absolutely. You see it all the time. We see affordable markets are becoming more popular. They're having more demand. You just, your money goes further.

And I will give you guys a little spoiler for the market I picked today. But I thought really hard about the tradeoff between how good of a job you can get in a market to how expensive homes are. Because there are some markets that have this sweet spot where, like, you can get a great job, but the properties are still pretty inexpensive. And so we'll get into that. But first, I wanted to ask you, Henry, just a little bit about your story because I know you moved for a job, right? to Arkansas and then started investing once you were there. But you didn't choose. So you sort of did the more traditional path. You followed a W-2 job, right? Yeah, followed a W-2 and somewhere along the way decided to buy a rental property. And as I started to learn more and more about investing,

I was learning that there were two buckets. Typically, people were either investing for cash flow or investing for appreciation. And when I started to research like what those things were, I was like, oh, this market gets you both. That's pretty cool. So I continued to invest here. And as I've grown as an investor and learned, you know, what to look for in a market and how to analyze markets, I've started to learn that I live in a pretty amazing one in terms of real estate. And so that's why I've just stuck to investing in my backyard. I haven't had a reason to invest anywhere else. So, Henry, you mentioned that you just bought a rental property, which obviously makes it sound easier than it is. I'm curious if because you lived in a market that in retrospect was just booming

and growing so quickly, that that influenced you or motivated you to get into real estate rather than doing something else with your life? No, because when I first, when I first got into real estate, I didn't understand how amazing the market was that I was in, but I did understand that it could help me reach my financial goals. And then once I started to learn more about market dynamics and what makes a good market and what makes a good investment, I realized that like I'm in a very fortunate position living where I live to be able to gain appreciation, equity and cash flow all within all within my backyard. So I just, that's when I started to realize that people who are looking to invest out of state are typically looking for either more

affordability or easeability to scale because of the price points and because of the rents. And because I can kind of get all those things here. I've never felt the need to look outside of my market. Like if someone sends me a deal outside of my market, it's got to be a grand slam home run, can't lose kind of a deal for me to even consider it. That totally makes sense. It's sort of like time and place. I always just think back to my start to investing. I was living in Denver in 2009. And it was just so obvious that the city was growing. I was looking for ways to capitalize on being somewhere that was like super popular. And that's sort of how I found real estate, not the other way around. I wasn't like, oh, I want to be in real estate. Is Denver a good place? I was like Denver's

exploding. How do I capitalize? So it's just interesting. It's sort of like a chicken and egg thing. But for everyone, it's obviously going to be different. All right. We have to take a quick break, but stick around. We'll dive into where we'd start investing today right after this. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress. Here's a better question. What if you could buy brand-new construction homes, 10% below market value, in the best markets across the country,

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Before this episode and before this conversation, I sent you some market research, both of you, to do some homework. It's a data set that we created at Bigger Pockets. If any of you want to check out the data set that Ashley, Henry and I are talking about, you can get it completely for free. Biggerpockets.com slash where to start. You can also go to biggerpockets.com slash markets and just get all of our market research there as well. But the game now is from the market research that I sent to each of you. I want to know which market, if you were to start over and just picking a place randomly to move to or to start investing in the U.S. where you would pick. And so there were some rules that we created for this game and homework assignment. The scenario is that you have $35,000 save up.

You're currently renting. You're not tied down and you get to move anywhere you want in the country to invest. Given those criteria, Ashley, what would you choose? Okay. So I took that $35,000 and I wanted to look at it two different ways as to if you were actually going to move somewhere. And that way you could get an FHA loan, put three and a half percent down or even a conventional loan with 5% and that wouldn't eat up all of your 35K. But I also wanted to look at it if you didn't want to move and you wanted to stay where you were renting, but you wanted to buy an investment property so that you had the option of putting 20% down with just getting a normal investment loan. So looking at that kind of price point, you know, 180,000, 20% of that is like 36K, 35K. So that would take your hold down payment. So I went and I kind of looked at, I kind of looked at. I kind of looked at. I kind of looked at. I was, you know, looked at areas that had a median home price that was around that range.

One of the second things that I looked at that wasn't a filter on this, but was extreme weather. So that kind of eliminated California, Florida, the Gulf Coast for me, different things like that. Can you explain why? Why was that a variable for you, Ashley? Mostly insurance. So there was an insurance column in this spreadsheet. You guys go and take a look at it. So your insurance costs can fluctuate. It could be one price, one year and explode the next year. But also the fact that, okay, if I have tenants in place or even if I'm house hacking and a hurricane comes through, I don't really want to have to deal with damage and getting it replaced while everybody else around me is trying to figure that out.

So I'm looking more for low risk. This is my first investment. This is $35,000 in my life savings. I don't want to be where there's extreme. weather. Next, I looked at rent to try to look at the rent price point and make sure that it wasn't a huge factor. There's always the 1% rule, which I think is pretty hard to meet in most markets. Yeah, it's tough. Yeah. And then I looked at the unemployment rate and kind of just took an average. I looked for, you know, ones that had really low unemployment rates, but it wasn't a huge,

huge consideration, I actually went back and looked as to how much the unemployment rate actually fluctuated. So if there was a huge drastic change, that was more of a concern to me than if an employment rate stayed steady. God, I have such a nerdy thing to say that I'm just holding back on right now. Well, let me reveal my market. So my market selection was Erie, Pennsylvania. And you guys may recognize it from national news lately, and I feel like this is also a big draw. Right now, you can go to Erie PA and you can see an alligator that is living in Lake Erie. Where else can you see an alligator without having to buy hurricane insurance on property? The day three, they still have found it, but I thought that was funny.

After I had picked my market, I saw that news story. I love that Erie's claim to fame. that has one alligator where like you can't walk from your car to your house in Florida without hitting an alligator. Has that alligator endured a winter yet? No, just three days they've been spotting it and the hunt is odd to capture it and rehome it, I guess. It ain't going to make it through the winter.

That's a good point. All right. So I like those criteria. It sounds like you really prioritized low risk. Is that right? Yes. And another thing to kind of add to the low risk is I wanted to make sure three different strategies would work. So long-term rental, short-term rental, and midterm rental.

So there's, I think it's called St. Vincent Hospital. There's a major hospital there in Eerie PA that can draw a lot of, you know, traveling nurses. I think it was about 55,000 people had searched on furnished finders for rooms or places within the last 12 months. And then for the short-term rental, so in Erie, PA is a state park called Preskeyle. And this I found so interesting. So Yellowstone National Park in 2023 had just over 4 million, I think like 4.3 million visitors for the year. Preskyle had 4 million visitors for the year. So just a little under Yellowstone.

Is it the alligator? Like, why are people going there? Only in total. there are only four national parks that had more visitors than Preskeyele in the year 2023. So looking at it from a short-term rental standpoint, that's a great attraction if you decided to turn your property into a short-term rental. That is great data. There's excellent market research.

You just want to call out to everyone listening. This is the type of stuff that Ashley's talking about that really gives you an advantage in your investing, looking at these sort of details that aren't going to show up on zillo.com. you know, if you go and look at the market data there. This is, you know, research that every investor honestly has to do for themselves. There's not going to be a list that tells you this. This is you going in and digging in. And, you know, I honestly, I don't know much about Erie, Pennsylvania, but I just pulled

it up on Google map. And it makes sense that there's so many visitors. It's sort of like right in this middle of three really big cities, Cleveland, Pittsburgh, and Buffalo. It seems like it's sort of like maybe is it a, I guess it's a vacation destination between these three locations, but has its own economy in its own right. Yeah. And it's also close to other destinations like Chautauqua Lake is a huge destination that it's in close proximity to and just Lake Erie itself having the waterfront there. But another number I found interesting about this was that 10% of the people that live there actually telecommute. So they work remotely, which is actually a huge percentage compared to other cities around the country, too.

So there must be something attracting people there. And then 95% of the people that work there are, I think it was math and tech jobs. Yeah, computers and math, more than 95% of the places in the U.S. Yeah. Wow. That's very cool. Yeah. Excellent research.

I think that stuff is in our market research if you want to check out. those jobs numbers, or you can do that on biggerpockets.com slash markets. But actually, that was really great. I'm very interested in Erie now. Let's move on to Henry. Before you tell us what your market is, when do you think about doing market research, particularly in this scenario, again, you have 35,000 saved up, you are currently renting, you're willing to move. What were the things that first came to your head about how you would pick a market? Yeah. So for me, when I'm thinking about picking a market, I am very concerned with the economy and population growth because I don't ever want to put my money someplace where that town is trending downward. In other words,

slowly dying over time. Because just because you're getting your numbers you want today, doesn't mean you'll be able to get the same numbers down the road. And so I was concerned with what's the economy there, what companies are making up the economy? What's the economy? What's their plan for the future? Are they growing and expanding their infrastructure in these cities? Or are they reducing it and jobs moving somewhere else? And then what's the population growth? I want steady population growth year over year because that tells me that people are moving to work for these companies and they're staying and more people are coming in than there are leaving. Like those things tell me that this could be a good place to invest your money. And then,

On top of that, what I like to look for is, is it affordable for people? So are people making enough money in that market to afford to live there? And then what are the rents? Because if the home prices are affordable, but the rents are super low, then it still doesn't make for a great place for you to invest as a buy and hold investor. And just like Ashley, like I want to analyze a market based on long term rental. And the reason I want to do it based on long term rental is because that's your parachute. And if you can do long-term rental, then perhaps you can do short-term rental and perhaps you can do

mid-term rental. And so I was also looking for a place that would allow me to do those other exit strategies. But if I had to pivot and not use those strategies, could I just stick a tenant in a property and have it make money? And then how easy is it going to be for me to find properties to buy? So those are some of the things that I look at. All right. Well, now I'm on the edge of my seat.

What did you pick? So, you know what, full transparency, going into this before I even look at the first. through your data set. I had Alabama in my head because I've got students who invest in Alabama and they're talking to me about all the time and I'm like, oh, it's hard for me not to just want to pivot and go buy somewhere else. But it seems to be a place where there is still affordability where you could get great rents and there's great jobs. And so Alabama was in my mind. And then as I started to dig through the data and filter some of those things that I was just talking about, Tuscaloosa, Alabama really came to the top of the list for me.

I thought you were going to say Huntsville. That's a very popular pace. But Tuscaloosa always comes up on these lists. That's where the University of Alabama is, right? Yeah, that's where the University of Alabama is. Correct. So you even have student housing as an option. That's exactly right. So what I liked about this market in terms of the economy is there's a huge Mercedes-Benz plant there that's been there for a while and they're investing more money into growing and expanding this Mercedes-Benz plant. There is also a company, steel manufacturing company called, I think it's called NERCOR Steel in Tuscaloosa.

They're spending $280 million expanding their operations in Tuscaloosa, Alabama right now. Obviously, you have the University of Alabama as a huge employer there, but you also have the healthcare system that's a huge employer there. If you look at Tuscaloosa, Alabama, over the last, so it's seen an average of about 16.8% in home appreciation over the last five years. And you have amazing price points and rent. So average or median home price, $220,000 median rent, $1,500. And so that tells me that I can probably get on the MLS and find a property. that makes sense.

And so I did. I looked on the MLS and within five minutes found a quadplex listed for $335,000. Wow. And it's turnkey. It does not need a renovation. And you can probably rent each unit out for about $1,000 a month. So just off the top, you are, you bring it in about $4,000 a month. They're asking $335.

It's been listed for 56 days and they're already doing a price reduction. So that tells me that I can probably offer less than that, walk into a turnkey property that's making you money and gives you some equity on day one. Like, you just can't find deals like that in a lot of markets. And so I think with this mix of metrics, you have a pretty good and safe market that you can invest in. I also like it because it has similar dynamics to where I live, being Fayetteville, Arkansas, being a college town that has some similar dynamics.

And so there's a level of comfort. and familiarity there for me as well. But also super great unemployment, 2.4%. So it's a, wow, pretty good market. Henry, with this market, so it sounds like you found a deal already. Just to enlighten people, why would you not go after this deal? Yes, this deal probably could work, right? It's still a surface level amount of research.

There's still more research that would need to be done to figure out if that could truly be a good deal. And the level of effort that I would have to put into going and figuring that out doesn't necessarily make sense, given that I already have a great market that I understand fully and completely. I have a team in place where I live. And if I was going to go by this deal, I've got to go now, build a team, find a property manager, find a title company, find a handyman, right? There's a lot of work that needs to go into investing there. And I've already built that foundation in a market that I can drive to and see my property. So it doesn't make sense for me just to jump in and go buy this deal because it looks like a deal in another market.

But if you're brand new and you haven't established that home base anywhere, doing this kind of research can help you figure out where you might want to go establish that team. Well, Henry, this episode comes out on August 21st and you're going to get a lot of social media inquiries now about trying to find this four bucks because it sounds like a good deal. the thing I perhaps like more than all the data, I know that's surprising for me, is the availability of deals. That is a really big difference maker in today's market, especially if you're new. And Henry, you're great at deal finding and teaching people how to do that. But the level of effort that you'll save by just being able to find deals on market is going to help you get into the game so, so, so much faster. So that is, I didn't really think about that when I was picking my market. But I think that would be.

Now that I'm rethinking about it, that would be like a huge criteria for me. So so far I'm hearing that Ashley and I are better at sifting through data and making decisions than the data deli. Yeah, probably. I think we're about to find out because Dave, you're up next with the market. That's right. I am going to share my market, but I just want to remind everyone that we want to know what you would pick to. Ashley and Henry have picked really interesting markets. I'll share mine with you.

But there's no right answer here. I think that's the main thing is we're trying to show you all and share with you what we would think about what we would prioritize. And remember, if you're listening on the day that this comes out, tell us what market that you would invest in, tell us why you would pick it and tag us on Instagram. So you could do that in a reel. You could do it in a store. You could do it in a post. We're going to pick someone from that group to get a shout out on this podcast. And you'll also get a swag gift package from Bigger Pocket.

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I'm happy about this because I feel like we've all taken a slightly different approach to this. My number one thing that I was thinking about is where I could actually get a great job relative to how expensive the market was. And I wonder if this is because I work full-time. you both are full-time real estate investors. So my brain went to like, where do I get a great W-2 job that my salary is going to go a really long way? And so in order to do that, I cheated and added a new column to the data set and made my own metric because I'm such a f*** nerd.

So I basically figured out, I divided the median sale price by the, the median wage to just basically see like how many years of salary would it take to buy the average home. Then I started looking at a lot of the other stuff you both talked about the rent to price ratio, unemployment rates, job growth, you know, population growth. And what I picked was Oklahoma City, Oklahoma. I had never considered this market very seriously before. But the job growth is crazy. It's growing at nearly 3% a year, which I know that. in a vacuum probably doesn't sound like a lot. It's a lot.

The unemployment rate is like 3.4%. For reference, the national average is 4.3%. So it's really good. Population is growing. And in this metric I made up, the price to wage ratio, it came at at 5.4. So that basically means if you use no leverage, it would take you five full years of salary to afford a home. Cities like Seattle and Los Angeles are like 20 to 1.

So it just shows that if you are going to be like me, and work full time, your ability to buy property quickly is going to be much better in these cities that have this ratio of better pay to the price of the average home. So what do you guys think of my metric that I made up here in my choice? Yeah, I think that's very valuable to look at for sure. I think you're a cheater, but you're a data nerd, so I can't blame you. I can't blame you. You guys, on your podcast, you both are always talking about, like, use your super

superpower, do what you're good at, which is true. I'm just doing what I'm good at, which is making Excel documents. I'm sorry. But this is, you know, we do want everything to be fair. So just if you could add this column into every other market besides just your own. I will make sure to do that before we put this up. First and foremost, I want to say, everybody, please go look at this data set. Because one of the questions I receive a lot from people is how do I analyze a market or what market should I be looking at. And Davis literally put a ton of great information that people struggle to go out and find their own all in one place for you. And so just download the spreadsheet and look at it. You will learn

something and it won't take a ton of time. Secondly, Oklahoma City is such a sleeper market. I think people forget that Oklahoma City is a thing, but they've got a great economy. They're a great job. There's sports in Oklahoma City. There is, I mean, you can get a great home in a suburb of Oklahoma City and your money can go a long way. What people don't know about Oklahoma City, there's a ton of tech jobs. So a lot of people are moving to Oklahoma City to work in the tech industry as it's growing. Also, if you like Sonic, that's where they're headquartered. So you can probably get you a slushy or something.

Maybe you're happy hours a little cheaper there for Sonic. That's perfectly valid. It's a pretty big metro area. And so I think you get kind of some big city dynamics in, but not really the big Metroplex feel, but your money does go a long way because look at that. I mean, $238,000 for the median home price, but you can make a $150,000, $175,000 tech salary. That's a long way to stretch your money. That's what I'm talking about.

And to Henry's point, we do have the data set. That allows you to go really deep into market research. are new to this and just want sort of the beginner version, you can go to biggerpockets.com slash markets. We have tons of free data there as well. All right. Well, this has been a lot of fun. I wish we had a like a winner, but I don't really have a way to pick a winner. So we're just going to move on. I thought there was a prize. That's why I agreed to do this. I'm here for the cake. I will I will send you some cupcakes because I there is a prize for our audience for people who go and tell us which market they want and tag bigger pockets on social, we'll pick a prize for them.

But Ashley, you will get some sort of treat in the mail. There is no cake. The cake is not real. We'll say. There might be cake. Before we sign off, though, I just want to give like a disclaimer to our rookies listening to this as to I think what Henry said about, you know, he already has his foundation.

Think about where you have an advantage already. Like looking at all of these markets can be so overwhelming. See if there's a way to narrow down where you have an advantage. You have a boots on the ground. Do you have a real estate agent right there? You grew up there. Like if you're not able to invest in your own market, start looking at the places you already have an advantage of. And just remember that just because that market works for someone else doesn't mean that it's going to work for you.

People have different goals. They have different Ys, which impact the strategy that they're using to actually invest and to build wealth. So just keep those little disclaimers in mind as you're analyzing your market. Very well said. You're 100% right. And just for everyone, there is no such thing as a perfect market. All these markets are probably pretty good. Hopefully what you learn here is what Ashley just said and some tips to analyzing markets.

But before we get out of here, you don't get the final word, Ashley. We have to do the dish. Where is where I get to pepper you guys with questions. Come on. All right. I got questions for each of you. Henry, who's the one that got away? for you in terms of market. Had you ever thought about a market and like thought about pulling the

trigger, but you didn't and now you wish you had? No, no. I've never thought about a market from that perspective, but there are definitely deals within my market. Okay. That I walked away from over a couple thousand dollars of not hitting my money that are now worth like $200,000 more than when I was going to buy it. And so yeah, I definitely drive by those properties and go, Yep. Ashley, what about you? Do you have a market that got away? Yeah, my goal for 2024 was to buy a lakehouse to add to my portfolio.

And there was one market. I looked at Canadaqua Lake in the Finger Lakes. And that's actually where I would vacation each year and get a lake house. And I had the opportunity to purchase the property that I had stayed in as to put in an offer. and they listed it for way more than I expected, and we expected the price to continue to decrease and decrease. And I just found out the other day that it actually sold for exactly what they wanted. So I'm not as sad because it's going to be some multimillionaire that's going to demolish it and build their beautiful mansion

where this little rinky dink cottage was. So not as upsetting, but that was the market that I really loved. I liked everything they had going on there. The short-term rental rates were great. There was a lot of appreciation in that area. Anywhere in New York, the property taxes stunk. But we bought on another lake and happy as could be. Nice.

But that was definitely one market that I wish that I could have bought in. Mine that got away is in your neck of the woods, Ashley, is Rochester, New York. I went to college there. Okay. And when I was in college there, prices were extremely cheap. And over the last few years, it has really. exploded. I thought about it for a minute, actually. I talked to someone who was selling a portfolio of like 20 deals. And they were, you know, the average deal, this is, you know, mid-2010s.

It's probably like 60 grand was the average one. And I was like, no, Rochester's never going to grow. But like the markets have like tripled now. So I definitely regret that one. All right, Ashley, second question in the dish for you is what's a red flag in the market for in a market? If you were looking at it, what's one red flag that would stand out? Besides a random alligator that's cruising around, I don't know. That's a good question. I mean, off the top of my head is just a crime. Yep.

First of all, there's a lot of crime in that city. And then also the laws and regulations. Like, I would never invest in Portland, Oregon, because of their, you know, their squatters' rights and places. And then another one is anywhere you need to, like, that has extreme weather for me, like hurricanes, you know, invalcing on the coast. So things like that. That's a great point, Ashley,

because I forgot to talk about with my market. One of the reasons that I selected it is because it is a very landlord-friendly state. And since buy and hold is going to be my major strategy, red flags are states that aren't very landlord-friendly. But some of my biggest red flags are population decline. So if you've got steady population decline over the past five years, 10 years, that's a sign that people are obviously leaving for some reason. And then another red flag for me is if the economy is made up of jobs and in that sector, most of the

jobs are shifting overseas. That's a good one. I wouldn't want to invest. That's a major red flag because if a major company decides to shift its operations overseas and they get up and move, then your market becomes a declining market pretty fast. And now you have to watch it. for that with AI too. That's true. That's a good point. Positions being filled with AI. My red flag is actually not data related.

Mine is, uh, it's sort of hard to put your finger on, but it's quality of life. I just like investing in places where people really like to live. I just think that's where businesses move. That's where people move. And when I go and visit a place, Henry and I actually talked about this on a podcast recently. Like I only invest in places where if I go there, I would want to hang out there. Like I feel like it's a good spot and I feel comfortable.

there and that I understand why people would want to live there. There have been a lot of markets I've gone to look at and didn't get that feeling, and I didn't invest there. All right. So for time, I'm going to cut out one question and just ask one last personal question for you. Henry, what's one guilty pleasure that you've bought with money you've made from real estate? My Corvette. Oh, that's a good one. Was it worth it? It was fun. It was fun. I'm I'm selling it now, but I loved driving it. I enjoyed it thoroughly. I have no regrets about owning it.

Okay. Excellent. Ashley, what's one thing? One guilty pleasure or one splurge? You don't have to feel guilty about it. What's a splurge from your real estate successes? I do feel so guilty about it. And it's actually, I just got it last week.

And it's also a car. And it's a grand wagoneer. Oh, they're so awesome. Yeah, those are so awesome, though. And the only reason I got it is because one of my partners in real estate, he owns the auto dealership and they had a leftover 20, 23, that they needed to get rid of. So I traded in my car and he is seller financing me the vehicle. Wow. 5% interest.

Why would you feel guilty about that? You're getting a killer deal. I just feel, I literally feel ridiculous driving around on a six-pensive car. So yeah, that is definitely a pleasure that I'm feeling very guilty about, but I just couldn't resist that 0.5% interest rate. My other one was out of warranty. So, yeah. Someone said seller financing, and now she's like, where do I sign? I don't even care what I'm buying.

Amazing. Well, I don't have that good one. I guess mine are experiences. I like hotels. I do like a nice hotel. So I'd go on like a nice, like going on vacation with my wife and like upgrading the room, doing a little. or inclusive or something. That to me is like the ultimate splurge.

Putting that walled off a story or robe on, there's not a better feeling in the world. You never sleep better than in a hotel. Just like, I love them. So that's my splurge. Well, thank you all so much for listening. Hope you guys learned something interesting about picking a market and how we would think about doing it.

Again, if you want to check out this information, you can go to biggerpockets.com slash where to start or biggerpockets.com slash markets. You can find all sorts of market research there. And remember, if you're listening right when this episode comes out on August 21st, make sure to go on Instagram. Tell us what market you would pick or which one you actually did pick. Explain why briefly you could do it in a reel.

You could do it in a story, a post, whatever. Just tag bagger pockets. And we're going to pick some winners. Send you some swag for being a part of the Bigger Pockets Club. We super appreciate you. Thank you so much for listening, Ashley and Henry. Thank you so much for joining us today. We'll see you soon for another episode of the Bigger Pockets Real Estate Podcast in just two days.

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