Regions for Cash Flow SFR's/MF's

[Leslie Hsia]

Greetings!

I've been somewhat on the hunt for SFR's and some multi-family's (mostly duplexes) to invest in as a first-time investor. Where are you all looking to find good deals (particularly for good cash flow)? I've been using the 1% test as a first-check since that determines whether I'll even have a positive cash flow the first year based on some underlying assumptions on vacancy rates, repairs, CapEx, PM fees, etc.

Given that I'm currently living in Seattle and will be relocating to the Bay Area soon, I figured my best bet would be to do long-distance investing, particularly the midwest (lower barrier to entry, more landlord friendly but at the cost of needing to have a PM). My hope is to get something a bit more turnkey (MAYBE >6-8% COC?) since I'll be halfway across the country. I've looked at Indianapolis, Columbus, Milwaukee, Detroit, Chicago, Flint, Cleveland, etc, and I've had a VERY hard time finding anything that passed my 1% test, and anything that did only gave ~3% COC. The closest I got to having a consistently higher COC on multiple properties was probably Cleveland, but some research reports have shown that their population and job growth have been decreasing over the years even before the pandemic hit.

I've tried looking in the Bay Area to see if I could house-hack, but the numbers just don't work out since the price-to-rent ratio is still absurd...

Where have you all been making your turnkey cash flow purchases this year?

[Marc Rice]

@Leslie Hsia

Columbus Ohio is great for cash flow but also appreciation. There’s lots of cash flow markets but without appreciation you’re missing out on a lot of the upside if real estate. We’re seeing great population and development growth in Columbus which has led to the appreciation