Help narrowing neighborhoods in Detroit, Memphis & Pittsburgh (OOS buy & hold)

[Ben Schein]

Hello all!

I’ve been deep into market analysis for the past few weeks, researching OOS markets to identify the best spot for my first investment (buy box below). So far, I’ve narrowed it down to Detroit, Memphis, and Pittsburgh, based on what I’m seeing for value-add opportunities, appreciation potential, population trends, median home prices, renter percentages, and landlord-friendly policies.

Where I’m getting stuck is drilling down from metro-level data into zip codes and neighborhoods. I plan to visit whichever market I choose, but I’m struggling to gain enough confidence to pick one and take that next step.

I’d love some advice on two fronts:

• How do you recommend honing in on specific neighborhoods or submarkets once you’ve chosen a metro? What methods, tools, or approaches have worked for you?

• Any insights or considerations for Detroit, Memphis, or Pittsburgh (or similar markets I might be overlooking)?

A bit more about my strategy:

I’m NYC-based, and while I know some strategies could work locally, my strengths and situation are better suited for long-term buy & hold value-add plays in more affordable markets.

Buy Box:

• Asset type: Multifamily (2-4 units)

• Neighborhood type: C or B-class

• Strategy: Buy & hold for long-term rentals

• Key goals: Positive cash flow in year one, with a primary focus on long-term value growth through appreciation & value-add. I’m comfortable with rehab work but don’t want a full gut renovation for my first deal.

Thanks in advance for your time and any advice you can share!

[Jeremy Taggart]

@Ben Schein you'll never be able to spreadsheet neighborhoods or zip codes in PIttsburgh like that. The only way to get that deep of knowledge is getting it from someone that knows the area like the back of their hand and has been on the streets for years in the local market. Zip codes (and even specific neighborhoods) can encompass A class all the way to D class within the same borders. 

It's very nuanced here which makes it nearly impossible to do that off the cusp. That being said, there are a ton of opportunities because of that. If you can buy in the nicer pockets of neighborhoods that people write off completely you can get B class tenants/properties at C class neighborhood prices. Or you can get in the path of progress knowing which sections are just about to blow up as a result of the street by street/block by block nature of the area. I would probably focus more on building those relationships in whatever market you pick unless you can find a more cookie cutter market, but I doubt any of those markets will be like that.