As part of the Journey to $100k per year in income from investments, I believe real estate will play a key role.
I originally thought I’d play in the Miami real estate market because earlier this year I moved from NYC to Miami.
However, after spending about 6 months in Miami and exploring the market, my girlfriend and I have decided it’s not for us.
I then thought about exploring other Florida markets but my girlfriend had been pushing me to consider Fort Wayne, Indiana.
If you don’t know where that is on a map, I don’t blame you; I’d never heard of the city until I met Sasha.
Sasha grew up in Fort Wayne.
Even though we’ve been together for a few years now, I still had never gone to visit her hometown because I had zero desire to go to the Midwest.
For reference, I grew up in San Diego, lived in NYC for a decade, and Miami for a while this year. Coasts are my friend and I have avoided anything but the West or East Coast my entire life.
But here we are.
As I’m writing this I’m sitting in a Starbucks in Fort Wayne.
So, why Fort Wayne?
Well, the first reason I took a look is because of my girlfriend. I believe having local knowledge of an area will come in very handy, and instead of having to learn a totally new market, I figured having her knowledge could speed up our process a bit.
But just because she grew up there wasn’t enough. Especially not enough for me to be ok spending time in the Midwest.
I needed to dive into the market a bit more.
So I started my research.
And what I found I liked quite a bit.
Here are some things I like about the Fort Wayne market:
- 2nd most populated city in Indiana
- 77th most populated city in the country
- Total population over 250,000
- The population has been growing slightly above the national average
- There has been a large amount of public and private investment into the city over the past couple years and will be hundreds of millions invested by the public and private sector over the coming 5 years
- Low unemployment of 3%, which is lower than the national average of 3.7%
- No single employer concentration
- No single industry concentration
- Major industries include: health care, manufacturing, insurance
- * One thing I don’t like is that manufacturing provides so many jobs here. It’s not the only industry but in general, I’m a little concerned with manufacturing from a long term point of view
So after learning more about the market, I started contacting local investors, real estate agents, property management groups, looking at historical records from the city, etc.
Here’s what I learned:
- There are low vacancy rates
- Rental rates, especially in downtown, have been rising
- Property values have been rising
- There are not many modern apartments
- Cap rates are much better than in NYC or Miami
- It’s possible to get a 15% cash on cash return in this market, which is virtually impossible right now in NYC or Miami
Ok, so this all sounded good on paper, but now I needed to actually go see it for myself because there’s nothing like actually walking around and getting a real feel for the area.
So, 2 weeks ago we flew into Fort Wayne.
Luckily my girlfriend could play tour guide for me so we have been able to explore things well. It’s also much smaller than NYC so it has been easier and quicker to get a feel for things.
I have to say, I have really liked what I’ve seen.
Seeing the construction happening downtown, walking the neighborhoods, viewing listings, meeting investors, real estate agents, the local people, etc had made me more excited about this city and its future.
And it has confirmed to me that I want to start making some investments here.
Our cash will go much further here than it would in the Miami or NYC market.
And because of the cash on cash returns that are possible, achieving our $100k per year goal is much more feasible in this market.
So, we’ve decided to go all-in on Fort Wayne.
And we are actually going to be moving here, at least for the next 6 months.
We just signed a lease on a new apartment here.
I believe our best shot at achieving our goal is to be on the ground and in-person here.
So that’s what we are going to do.
As a bonus, our overall cost of living will go down.
Our monthly expenses will go down to about $4,000 per month. For reference, in Miami, we were spending about $6,500 per month and our last year in NYC we were spending even more than that.
Now, our monthly expenses will not always be this low. But for now, we will keep them low like this so we can have our investment income cover our living expenses sooner. And as we increase that investment income to $100k per year, we’ll slowly increase our living expenses again as well.
But this time, it’ll be in such a fashion that we can continue at that level of spending for the rest of our lives.
So, that’s why Fort Wayne and an update on what we are doing.
If you told me a year ago I’d be moving to Fort Wayne, I’d have said you’re absolutely insane.
But here we are.
And really, it’s not that surprising.
Because when it comes to business and achieving my goals, for those of you that know me, you know I’ll do whatever it takes to put myself in the best position to succeed—even if it means moving to Fort Wayne.