Epic Real Estate Investing - 10 Best Cash Flow Markets After the Pandemic | 1051

Episode Date: June 16, 2020

In today’s episode, Mercedes, the Turnkey Girl, reveals stats based on the performance of 2000 properties that were sold through Cash Flow Savvy, Epic’s turnkey division, in order to share with you the 10 BEST CASH FLOw MARKETS after the pandemic of COVID-19. Moreover, you will find out how you can download the complete report on CURRENT HOT MARKETS for the more detailed info! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. So you want to be a real estate investor, but you don't want to do the work. If there were only a way where someone else could do it for you, now there is. Tune in here each and every Tuesday on the Epic Real Estate Investing Show for Turnkey Tuesdays with your host, Mercedes-Torres. Hello and welcome, welcome to Turnkey Tuesdays brought to you by Epic Real Estate Investing. My name is Mercedes-Turtees. Torres, your turnkey girl, and I am lucky enough to be partners in crime with Mr. Matt Terrio,

the guy who created the epic real estate empire. I help busy professionals create passive income through real estate investing so they don't have to work so hard and maybe even retire faster. So in this show, I share tips, advice, and real life real estate experience so that you two can create passive income in your world. That said, if this is the first time that you're listening to us, welcome, welcome, welcome. And if it's not your first time here, welcome back. So let's jump into the deal of the week because despite the pandemic, real estate is still hot to trot. Now, this last week, we had a unique property because I marketed a,

a two-bedroom, one-bath single-family residence in Indianapolis. Now, that sounds normal, but it's quite unusual for cash flow savvy because I'm a huge advocate of a three-bedroom property. I just have always been a fan of the three-bedroom. Most of my portfolio consists of three-bedrooms. So anyway, the reason I chose to go with this property is because this property was low. located on a great street in Indianapolis. Now, it was substantially smaller in square footage compared to every other house on the block, but it had a huge lot, which just means a ton of potential. So that was a two-bedroom, one bath, almost 1,000 square feet of gross living area, sitting on a lot that was 16,000 square feet.

So indeed, lots of potential. That property sold for $79,000, and it rents for $7.99 a month. So almost $800 a month. So we're right at a 9% cash on cash return after all the bells and whistles. So that deal of the week went to Mindy of Wisconsin. Miss Mindy, I know this was your first investment. So congratulations on that epic deal of the week. Now, it's already performing.

So when Mindy closed, she was already cash flowing. Woohoo! That's the name of the game. So the nation is just now coming out of this global pandemic. And states are starting to open up slowly but surely, which is totally promising. The coronavirus pandemic has, needless to say, changed the game of many industries, but in real estate,

I can't really say that we've been hugely affected. In fact, I continue to see the opportunity. So on this episode, I'm going to share results of research that I've done of markets in Middle America that have been marginally affected by this pandemic. And I'm going to do that right after these words from our sponsor. Have you been searching for a lender that is knowledgeable experience and will actually talk with you about your financial situation? Well, we found them for you.

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You will get individualized financial and lending education with epic love. The coronavirus pandemic has changed the game of many industries, but in real estate, as I shared, I can't really say that we've been hugely affected. Now, originally, I thought everybody and their mother was going to stop paying rent and taking advantage of the opportunity, but that hasn't happened. And with the stock market underperforming, investors may be wondering where to put their cash. Now, historically, residential real estate has proven to remain relatively stable amissed failing economic factors. And it's most likely because people always need a place to live.

But which markets will perform best in this post-COVID era? Now, in order to determine the best markets in which to invest moving forward, I've used recent data and insight from the performance of 2,000 properties that have sold through our cash flow savvy turnkey division. And because I still get reports on the performance of all of our properties from our property management teams. And even if I don't own them anymore, I kind of still get to see how they perform. And that's just to ensure that my clients are happy with their investments. So I use that very useful data to come up with the top 10 performing markets.

Now, I'm going to share the two key factors that I deem to be important in determining what I consider best markets after COVID-19. Okay. First, it's cash on cash return. I specifically used the cash on cash return. to measure the best cash flow market. So just as a reminder, cash on cash return is calculated by subtracting the annual expenses from annual rent income and dividing it by the amount of cash you initially invested.

In other words, money that you put out of your pocket. So if you bought a rental and were using conventional, financing, generally conventional financing covers 80% in which you would have to come down with 20% a 20% down payment. So this formula allows you to use that 20% in addition to the closing cost and any immediate repairs that were needed for this deal. So basically, this measures how your investment compares to other ways you may invest, like in the stock market or other ventures that you may invest in. This cash-on-cash return, it's really important matrix, especially during and immediately following a pandemic, as it shows whether your investment can keep afloat.

Now, keep in mind, now is not the time to bank on your properties increasing in value. Now, the future and consumer behaviors is a huge question in uncertain times. So keep that in mind when you're factoring your cash-on-cash return and really just look at the solid numbers as I did. I just merely looked at the rents that were being collected and I compare it to the initial money out of your pocket. And second is the price to rent ratio. The price to rent ratio is another good matrix to track as it tells whether it's cheaper to rent or to own in any given area. The higher the ratio, the more sense it makes for renters to keep renting instead of

purchasing their own home. This is what you want to look for when you're doing. determining if it's a good rental market. When in this case, that market will deem better for investing and for a rental property in that particular area that you're looking for. So these are the two key factors that I used to dive into and really dissect what the top 10 best cash flow markets were. And I will name all 10 of them, but I'm only going to dive into.

to details of three of them. Because I put all of these in a market report, which you can simply just download from our website. It's totally free. And all you have to do is click on the link to download this report. So just go to cashflowsavvy.com, and that's savvy with two Vs, and you'll see it right there. And while you're there, if you want, feel free to download the frustrated investors' guide to passive income.

I mean, that's free too. And I just share how I got out of the rat race when I just was tired of working for corporate America. So in that report, it is a proven method and a plan on how I did it. And it's virtually step by step, super easy. Took me about three and a half years to get out of the rat race. And I created that report as well. It's a little pamphlet, a little read-along.

But it's completely. separate from the top 10 markets, a completely different report, however, super, super useful if you are looking to get out of the rat race. And heck, if it worked for me, I know that it can work for you. Okay, enough lala gagging. Back to the top 10 markets in no particular order. Drum roll, please. Market number one, Birmingham, Alabama. Then, St. Louis, Missouri, Kansas City, Missouri, Indianapolis, Indiana, and Maraville, Indiana, Cleveland, Ohio, Little Rock, Arkansas, Quad Cities. Now, these are four cities that all boundary between Iowa and Illinois, we know them as the Quad Cities, Atlanta, Georgia, and Memphis, Tennessee. Now, keep in mind,

These are in no particular order. I paused a little bit if you wanted to write them down in between each city. And again, I'm only going to dive into three of the markets to help you understand why they are such great performers. So the first market I'm going to jump into is Birmingham, Alabama. Now, that is a great stable rental market. It is the home of the University of Alabama and Auburn University. shame on me using those two universities in the same sentence because I know from personal experience you either root for one or the other you can't do both and let me tell you those people in

Alabama they will bleed their school colors so prestigious universities and just solid as to bringing people in to attend those universities every year now Birmingham Alabama has been ranked the 13th largest southern eastern metro area. Growth in that market is super stable. Now, it doesn't skyrocket, but it is stable and it's consistent. And I mean, mind you, Amazon just opened their hub there about a year and a half ago, maybe it was two years ago, but that brings solid employment. And then there's big corporations like AT&T, the Mercedes-Benz manufacturing plant and the home of Wells Fargo. Sweet spot for rental homes in this area, they range between $80,000 and $120,000 for a single family resident that rent range between $750 to $1,200 a month. So I'm going to

let you do the math, but it falls right at that 1% rule, and I mean, it makes it super affordable for renters to rent. So that is a solid, stable market. Now, don't think Alabama has amazing appreciation rates because it doesn't. It appreciates very slowly, but I tell you that cash flow is super consistent. Next market. I I'm going to share with you is Indianapolis, Indiana, and Merrill, Indiana. You're getting a two-for-one there. Now, Mariville, Indiana, hardly anyone talks about that market. It is a market in the northern part of Indiana. I think it's a totally hidden gem. And I mean, the secret to that market is it borders Illinois. So many of my personal tenants live in Indiana, but they work in Illinois.

And the reason they do that is because the cost of living is substantially cheaper in Indiana. So, as you know, Indianapolis, which is probably about an hour and a half, two hours away from Merrillville. But Indianapolis is quite a popular market, and it's proven to work super well. and there are a few key factors as to why this market has been marginally affected by the pandemic. So key factor number one, it's the 14th largest city in the USA. It has super low unemployment despite the pandemic, and the cost of living in this market is on average 7% below national average. So factoring these three elements and these three elements are still present during the pandemic,

make this market a total winner. Now, our price points in this market is a little bit higher, but it's proven to be super effective and cash flows really well. The sweet spot for price point in this property is between 100,000 to 150,000,000,000, for a single family residence. And rents are between $900 and $1,500 per month for that single family residence. So the ROI is a solid 7 to 9% cash on cash return. You can bump up that line up right next to that 10% cash on cash return in Alabama, specifically in the northern part of Alabama. So that was a two for one. I said I was going to share three markets with you, but that's

really two markets in itself because in those markets, they're far apart from each other where I specifically have independent property management teams managing those specifically. So that was market number two and three. And the final market that I'm going to share with you, which I mean is super under the radar, is Little Rock, Arkansas. A few facts. about that market. When the downturn happened in 2008 and 2009, Little Rock was barely affected, according to Forbes magazine. It is the second cleanest city in America and the seventh best metro economy in the USA, according to Brooks Institute. Now, perhaps this is why COVID barely affected the cash flow as just less than 1% of our renters didn't pay rent during this three-month pandemic.

Well, we're still in the pandemic, but we are getting out of it. But less than 1% of our renters felt that they needed to skip on rent. So good stuff. Solid price points in that market range between 80 to about 140,000. It's a little bit wider of a range. But, you know, I completely have to say that two-bedroom one-bath properties work really well in northern Indiana, as well as the bigger ones. I don't see a huge difference in how those performs. So it is a strong, stable market, especially in that northern area because a lot of people choose to go work in another state. So it makes financial sense for them to live in Indianapolis. Now, there are seven other markets. that I named in our reports that I'm not going to dive into details. But in the report, I go into statistics and details.

So feel free to download that at cashflow savvy.com so that you can see all the details as to why these markets are such great performers, despite the fact that there is a global pandemic happening that we are just now getting out of it. On that note, if you found that this podcast and the information that I shared was super helpful, please share us with a friend that can also benefit from this with someone in your RIA group or someone that you do business with or leave us a five-star review on whatever platform you listen to us, whether it's iTunes or Podcast Republic or IHeart Radio. It absolutely helps us to continue to produce useful and helpful content so that you can continue to be successful on your journey to cash flow.

So feel free to share us. I'd love and appreciate a review. And feel free to email me directly if you have a question or you want me to tap on a subject that you haven't heard me talk about. feel free to email me directly at Mercedes at epic real estate.com and Mercedes is spelled just like the car. Now, I read each and every email and sometimes it takes me a little bit to get to you. Might be three days, might be five days, might be a week, but I promise I read your emails and I respond to each and every one of you. And you can rest assured it is me responding and not my assistant. That's it for today. As always, I hope I have gotten your wheels turning and I hope that it inspired you to start, if not continue to produce passive income that you deserve.

Until next week, where cash flow is king, have an epic week. Does your money work for you as hard as you do for it? If not, no worries. You do not have a money problem. You merely have an idea problem. We're cashflowsavvy.com and we'd like to share a new idea with you around income real estate that can transform your financial future and accelerate its arrival. Go to cashflow savvy.com and download a free investors package. Cashflow savvy.com. You do not have a money problem. merely an idea problem. Cashflow savvy.com. More ideas, less worries. Cashflow savvy.com. This podcast is a part of the C-suite radio.

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