To all of you real US estate experts - Where should I invest in real estate?
Looking at small scale commercial ($1-2mm)- real estate to be leased to restaurants, super markets etc. Austin looks up and coming but would love to hear more views!
Broadly speaking, US real estate is one of the most sought after asset classes globally. But the deal you described could be total garbage. Depends on the lease terms, tenant credit, micro location, what the financing market for that asset looks like, what the buyer market for the asset upon sale looks like etc.
You can absolutely invest in Austin Texas and lose all of your money. Or you can invest in a project down the street and 3x your money in 2 years
Thanks and well understood, but was doing a top down approach before focusing on the nitty gritty details you mentioned. Looking more in terms of macros, head/tailwinds and general environment.
I mean, there are 50 states with major cities in all of them, you could find 400+ cities to get a good deal on a $1-2m project. Doing a top-down approach like that is incredibly unwieldy and a waste of time. And because of the micro-location details, if you don't know the city well you could buy something that seems great but ultimately isn't in the right location.
Start with what you know, aka local markets or your home town if you moved away, and look at opportunities from there.
Austin is beyond up and coming. Has been a great performer and consistently ranked among top markets. Concerns going forward will be oversupply and the tech industry in the US is struggling at the moment (layoffs). Tech expansion to austin has been a huge benefit and likely will continue to be long term but something to watch short/medium term.
In 2018
As others have said, invest where you know. You can make far more money buying a great deal in a decent market than an okay deal in a great market. Also, if you live in New York and buy in Austin, can you manage real estate from there? Outside of absolute NNN deals leased to amazing credit for the next 20 years, there are very few deals in real estate that are actually passive. Buying a small building with a ground floor restaurant and two units of multi above it (as an example) will be a tremendous amount of work for you. Make sure it's worth your time.
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