Epic Real Estate Investing - Top 10 Cash Flow Markets for Turnkey Real Estate | 862

Episode Date: December 10, 2019

Last week, our turnkey girl, Mercedes was invited to speak at 8th Annual Single Family Rental Forum in Phoenix, AZ about turnkey rentals in the USA. This Tuesday, she decided to sum up the key points from the gathering and share it with you! More specifically, she reveals what are the top 10 cash flow markets for turnkey real estate, across the country. Tune in and find out more! 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 Torres, your turnkey girl, and I help busy professionals acquire passive income through real estate investing so they don't have to work so hard and maybe even retire sooner. So this show is created to share tips and advice and real life real estate experiences so that you too can create passive income in your world.

That said, if this is your first time here, glad you made it, Make yourself at home. If this is not your first time here, welcome back. So I've shared before I am really fortunate that I get asked to speak at real estate conferences all over the country. And last week, I was invited to speak at the eighth annual single-family rental forum in Phoenix, Arizona. And I was asked to speak about rentals in California.

specifically on turnkey rentals in the USA. I mean, the conference was three days long, and rather than going into the gory details, I thought I'd sum up the key points that really stood out simply because all of the information shared at this conference was backed by solid statistics. I mean, the reality is no more land is being created. So it's no secret that there will be a shortage of rentals at some point.

The demand for rentals right now in today's world is the biggest it's ever been in the history of real estate. I mean, baby boomers are downsizing. They're selling their homes and deciding to rent while taking the money from their primary residents that they've sold and investing in other vehicles and they're choosing to rent their properties. And the millennials, well, these millennials are a whole different conversation, but they're deciding to rent two. Now, the millennials are critical to our society. They're broken up into two categories. Now, category number one is millennials, between the ages of 21 to 29 years old.

They're just now getting out of college. They're starting a career and they're unable to buy a home. So they're choosing to rent. Now, the second category of millennials, which is the ages between 31 and 39 years old, this is where these youngsters are choosing to get married later in life, and they're starting a family later in life. So they too are choosing to rent.

Now, did you hear what I said? They are choosing to rent. They're not wanting to commit to buying a home, even if they're newlyweds, even if they're starting a family. They are choosing to rent. And at the end of the day, this conscious decision to choose to rent

is because they want the ability to change their mind after the lifespan of their rental, which is proving to be an average of almost four years. The American dream has shifted, and in today's world, people are renting their primary residence, and then they're buying rentals as an investment vehicle. the home that these people are renting is now resulting in longer rental periods. And so while tenants are still signing one-year leases because I'm big on one-year leases, only because I want to increase the rent the next year,

because statistically proven, tenants are staying an average of three years in their rentals. Now, there's statistical information to support all of this, and all of this is really mitigated by a lot of different aspects, and I'll dive into those in just a moment. So everyone is talking about the market shifting, and we're quite possibly going into another recession. Well, I'll attest to that. The market is definitely shifting. I see it every day. and just the fact that homes for sale are now staying on the MLS, much longer than they've been staying in the last decade, that's a key indicator that the market has shifted. So let's talk about now another recession. Is it going to happen? And if so, when?

What will that mean to us, the renters or what will it mean to us the investors and how will you be effective? Well, the reality is if there is another recession, and if you do have rentals, you will barely be affected. Why, you asked? Well, in a recession, while prices drop, rents do not drop. Success leaves clues. And all that being said is that whenever anything shifts in a market, something has to stay stable. So sure, if there is a recession, no doubt the prices of homes will definitely drop. However, if rents drop, they will drop a very small amount and you as an investor will not be as affected. Now, I decided to share these top 10 markets of 2020 that are producing solid returns not only to me, but to our clients. And in fact,

I am going to do you a huge favor. And I will share the top five better performing markets in middle America that are recession proof because even if they do drop in value, I almost can assure you the rental prices will not drop so significantly that it's going to cause a negative impact to your bottom line. So I'm going to share these top five markets to you so that you can dive into real estate or help you make your next investment or help take your current investments to the next level. Got it? Okay. So are you ready? Good. Get a pen and paper. Actually, you know what? Don't bother. At the end of the podcast, I will share where you can download this top 10 cash flow markets in the USA for your own reading, if you will.

So I often get asked, you know, how did you come up with these 10 markets? And not to say that, you know, we've had a proven record because we've been investing in these markets for over a decade. But we created a proprietary algorithm several years ago that pulled information from government census. And this algorithm really focused on medium household size and medium household income. And it allow us to evaluate the type of properties that families gravitates towards where I know they were going to be living for more than two years. So we've been able to understand that although these tenants sign one-year leases, they're staying an average of three years and eight months,

almost four years. And after almost a decade, we've been able to see these properties work firsthand. So I decided to put them in a report so that you two can learn a little bit more about these markets. Now, I'll name the markets and I'll share a few highlights as to why these markets are rock solid and why they're working so that you two can research them and then verify the information for yourself. Okay. So, drum roll please. And in no particular order, market number one is Birmingham, Alabama. This is a great market. I personally own several properties here and they are great performers. I mean, it is a stable market. They have several big corporations in town like the Amazon fulfillment center, the Mercedes manufacturing plant,

the Honda Manufacturing Plant, and the U.S. Steel Corporation. Now, Alabama is ranked 54th in population among 268 of the nation's metropolitan areas. So what does that mean? Rentals are high in demand. There is a limited amount of space in Birmingham, Alabama, and a huge portion of those properties are rental properties. Great market. Okay. Let's move on to market number two, Indianapolis, Indiana. And of course, Indianapolis is home of Purdue University and Butler University. But here's something really interesting and most important about Indianapolis. Indy is the 14th largest city in the U.S., and they have one of the lowest unemployment rates in

the nation. That's according to Forbes in 2018. And the cost of living in Indianapolis is 7.6% below the national average. Now, Indianapolis has more than 90 national companies that have headquarters there, not to mention Peyton Manning's Children's Hospital, which has done amazing things. for children in need, sick children. And so Indy is a solid, solid market. Now, moving on to number three is St. Louis, Missouri. This little city is so unassuming. I love me some St. Louis, Missouri.

Now, they've got their Cardinal Baseball, and they're known as the Beer City. Not to mention, they have an amazing little lake. that I love to go visit in the summers called Lake of the Ozarts. One of my favorites, our buddy Jeff from our Ground and Pound School, has a boat there. And we go down every summer. But this city was named by Business Week just this last year as one of the best cities for families to raise children. It's classified, number one, as one of the most affordable cities.

in 2018, and it is the home of 21 Fortune 100 companies. Now, cities like Lake St. Louis or Webster Grove and Baldwin, all markets that we invest in, they are among one of the top 100 best places to live in the nation. Really unassuming city, but I will tell you. the cash on cash return in St. Louis, Missouri is insane. Number four, drum roll please. Are the drums still rolling? So market number four is Little Rock, Arkansas. I know, the city is a little gem. It is the seventh best metro economy. and in the downturn, the last downturn in 2007, 2008, this market was considered to be the strongest real estate market. So remember I talked about, yes, if there's a recession, prices generally drop, but rents don't.

And Little Rock, Arkansas was one of those cities where rents did not get affected in the least. Now, Little Rock, Arkansas is the second cleanest city in the U.S. Who would have thought that, right? Well, it is also the home of big companies like Tyson Foods and AT&T. So unemployment there is relatively low as well. Now, last but not least, and one of my favorite markets, and it happens to be a new market for me, but again, strong are the quad cities. Now, I often get asked, what and where are the Quad Cities. They actually share the Mississippi River and it's four little cities between

Iowa and Illinois. It's got a vibrant community of 400,000 people, of which Most of these 400,000 people are renters. It is an unknown and untapped cash flowing market, which is why I love it, because there's a demand for rentals and not a whole lot of people know about Quad Cities. Now, the region lies between a 300-mile radius of 37 million people without, access to major cities like Chicago, Minnesota, St. Louis, Des Moines, Omaha, Kansas City, and Indianapolis. It has been classified as the top 10 cities for millennials to live critical. This is what makes this city booming and what's making the cash flow even stronger. It is home of 40 colleges and universities within a 90-mile radius, and it is the home of John Deere. And get this, Quad Cities has been classified in all of the U.S. as number five in education, number four in opportunity, and number three in healthcare.

There is no wondering as to why this market is totally thriving as a cash flowing rental market. I mean, seriously, it is a no-brainer. Now, I've only shared five of the 10 cash flow markets in the U.S. that is producing phenomenal returns for our investors. and I can personally attest to all of these markets because I invest in each. So I highly encourage you to dig into these markets and do your research. If you want the report that I created, I will be more than happy to send it to you so you don't have to keep hitting rewind as you're listening.

Just go to cash flow savvy.com. That's savvy with two Vs. opt in to receive this full report and I will send it to you for free. Or you can email me. Email me at Mercedes at epicrealestate.com. And that's epic, epi-eepic, epic real estate.com. And I will be happy to send it to you. I mean, this report is filled with amazing statistics to support why these markets actually

cash flow so well. Not to mention for my listeners who are super analytical and that person that just loves numbers, if that's you, there's a treat in there for you because I've included several real pro formas of properties that have all the figures so that you can run your own analysis on the properties in these hot markets that produce an amazing cash on cash return. At the end of the day, this is all about cash flow for you. So these figures will help you analyze what market is going to be a good fit for you and what cash flow you can expect from these phenomenal markets. So enjoy.

That's it for today. I will catch you on the next episode of Turnkey Tuesday where cash flow is key. Have an epic day. If waiting for your investments to grow feels like waiting for pink to drive, there's a powerful secret. Your financial planner doesn't want you to know. You can accelerate your investments growth by two, three, or even four times. That's bad news for Wall Street, but great news for you. We're cash flow savvy, and we'd like to offer you free information that will show you how to take control of your investment.

and double, triple, or even quadruple their returns, and it's yours for free. For the secret your financial planner doesn't want you to know, go to cashflow savvy.com. That's cashflow savvy.com. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.