Best Markets for Rental Properties

[Caleb Landis]

I live in an expensive market where it is very difficult to find cash flowing rental properties. That means I will be partnering on flips in the market I live in, but looking to buy and hold rental properties for cash flow elsewhere. 

How do you go about choosing where to invest remotely? Where are you investing right now remotely? 

[Jack Medford]

I buy and hold primarily in Milwaukee, Wi. The reason is the great cost to rent ratio, plus the abundance of multi-family properties. It is sort of out of market investing, as I live 1.5 hours from there. I only go to the city once every other month or so, but don't really touch the property as I have PM handle the day to day. 

Keep in mind, investing in Milwaukee (probably any market you're looking) needs to be handled with care. The neighborhoods can change very quickly, so connecting with locals is a must. This goes beyond just "putting together a team" although that is important as well. Talk with as many local investors as possible, and keep connected via any forums dealing with your market of choice. Also, beware of anyone selling you anything that sounds too good to be true. 

Take Milwaukee as an example. I've seen numerous wholesalers marketing duplexes that are $80k and below (some as low as $40k) and suggesting they need only a little spit shine and they'll give you over 2%/month in rents. While this is possible, 90%+ of these properties are going to be in the worst areas and you'll be dealing with 100+ year old properties that are in really rough condition. Guess what kind of tenants this will attract?

The point is, for wherever you are looking to invest, do your best to bring real value to the community. Don't just look at the numbers and make income assumptions on providing bare bones value. You'll be doing a disservice to the community, as well as yourself. 

Apologies that this turned into more of a rant then intended. I just spent some time reading through the recent Clayton Morris thread, and it got me worked up a bit. Here's a link if you're interested in seeing what happens when out of state investors trust the wrong guy. 

https://www.biggerpockets.com/forums/311/topics/689433-clayton-morris-morris-invest-house-of-cards-starting-to-fall