Best Growing Markets To Invest In
Member since 2025 · 13 posts · 21 votes
Best Growing Markets To Invest In
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Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
1yNicholas makes a great point—having strong ties to a market definitely helps, and picking a random low-cost market without a network can be tough. But if you’re set on going out of state, I’d recommend checking out Detroit.
I’ve been investing there since 2019 and currently hold 12 doors. Detroit stands out because of its affordability, strong rent-to-price ratios, and a market that’s seen steady appreciation over the last several years. The city has a lot of momentum with major developments, population growth, and continued investment in infrastructure.
That said, it’s not without challenges. Detroit requires strong local relationships to navigate things like neighborhood nuances and property management effectively. But with the right team, it can be a great market for cash flow and long-term appreciation.
If you’re interested in learning more, I’m happy to share some resources. Just shoot me a DM.
14 Replies
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
i'd pick a market close to you, or one you have strong ties in, rather than trying to get to one via math.
can you invest where you live, or 1-2 hours from where you live, or where you like to vacation, or where you went to college, or where you plan to move someday?
those are much more compelling than running a bunch of data and picking a random low cost market that you don't know anything about and don't have a network in.
hope this helps
- Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes1y
Nicholas makes a great point—having strong ties to a market definitely helps, and picking a random low-cost market without a network can be tough. But if you’re set on going out of state, I’d recommend checking out Detroit.
I’ve been investing there since 2019 and currently hold 12 doors. Detroit stands out because of its affordability, strong rent-to-price ratios, and a market that’s seen steady appreciation over the last several years. The city has a lot of momentum with major developments, population growth, and continued investment in infrastructure.
That said, it’s not without challenges. Detroit requires strong local relationships to navigate things like neighborhood nuances and property management effectively. But with the right team, it can be a great market for cash flow and long-term appreciation.
If you’re interested in learning more, I’m happy to share some resources. Just shoot me a DM.
- Member since 2025 · 13 posts · 21 votes1y
I would love to invest closer to where I live in Los Angeles, but it's so hard to find good cash flowing properties under 200k. Everything I have seen under 200k here are complete tear downs.
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
understood. it's actually tough to find cash flowing deals anywhere right now. the ones that look good in Ohio or Alabama or whatever come with their own challenges. hint: they don't actually cash flow either. if they were that great you'd never see them because they'd all get bought up before they even came to you.
I think what @Travis Biziorek is saying is correct - you need a strong network to be successful. put another way:
-Go on Zillow and buy a random property in Detroit: fail, lose money, give up on real estate investing.
-Build a strong network in Detroit of real humans over a period of months, buy a better deal, hold it for 10+ years, weather early storms: better chance for success.
Even on that latter deal though, are you going to cash flow in month 1 or year 1 or even year 5? Nope nope nope. Not how cash flow works.
And I get it, investing in CA is hard. But it's all hard right now. You may have to pick something hard. it is not 2016 anymore.
- Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes1y
Quote from @Nicholas L.:
understood. it's actually tough to find cash flowing deals anywhere right now. the ones that look good in Ohio or Alabama or whatever come with their own challenges. hint: they don't actually cash flow either. if they were that great you'd never see them because they'd all get bought up before they even came to you.
I think what @Travis Biziorek is saying is correct - you need a strong network to be successful. put another way:
-Go on Zillow and buy a random property in Detroit: fail, lose money, give up on real estate investing.
-Build a strong network in Detroit of real humans over a period of months, buy a better deal, hold it for 10+ years, weather early storms: better chance for success.
Even on that latter deal though, are you going to cash flow in month 1 or year 1 or even year 5? Nope nope nope. Not how cash flow works.
And I get it, investing in CA is hard. But it's all hard right now. You may have to pick something hard. it is not 2016 anymore.
I agree with most of this, Nicholas. Nearly all the investors I work with need to be re-educated about expectations. There are too many people selling you on how easy, passive, and lucrative real estate investing is.
I always tell people the first year or two will be bumpy. But 5 years is plenty of time for these Detroit investments to be working nicely. I really saw mine start to work after year 2-3 and I'm extremely public about those outcomes. I even do write ups on my blog where I share their performance and outline the challenges I faced with each one.
Why do I do this?
Again, to set expectations for the people I work directly with. If my stories scare them (and they often do), they should NOT be investing in Detroit.
But I'm equally tired of the narrative that these sorts of houses don't work as cash flowing investments. They absolutely do, you just need to know what you're doing or work with the right people.
Hint: I am "the right people".
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
Agree, I just think it's a question of timing. When does the cash flow start? And that depends on how you view the costs. If you put down 25%, that's equity, but it's also trapped - you can't use it for anything else.
Closing costs + rent ready costs + lease out costs - those you need to be compensated for and new investors are always surprised that they can add up to 5 or 10 or 15K. So with interest rates high... I still don't think you are truly "cash flowing" until at least year 3, but probably year 5-10. If you get some appreciation, does that compensate you for your initial outlay? Kind of. But new investors want that NET couple hundred bucks in month 1. It's not happening.
Now, the example above is obviously just a vanilla purchase with 20-25% down and a very light or no rehab. Other methods will differ.
- Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes1y
Quote from @Nicholas L.:
Agree, I just think it's a question of timing. When does the cash flow start? And that depends on how you view the costs. If you put down 25%, that's equity, but it's also trapped - you can't use it for anything else.
Closing costs + rent ready costs + lease out costs - those you need to be compensated for and new investors are always surprised that they can add up to 5 or 10 or 15K. So with interest rates high... I still don't think you are truly "cash flowing" until at least year 3, but probably year 5-10. If you get some appreciation, does that compensate you for your initial outlay? Kind of. But new investors want that NET couple hundred bucks in month 1. It's not happening.
Now, the example above is obviously just a vanilla purchase with 20-25% down and a very light or no rehab. Other methods will differ.
Yes, I agree with that example. It's also rare you buy these properties with 20-25% and have NOTHING you need to address almost immediately in terms of repairs or capex.
My focus is very different. We're largely looking at value add projects (aka BRRRR **cringe**) so that the vast majority of capital is coming out once a refi is done.
Not vanilla, obviously. And not for everyone. But I think any experienced investor would agree that if you aren't doing value-add when it comes to real estate investing, you aren't actually investing. You're just allocating capital.
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Jerry Zigounakis here's some copy & paste info we hope you find helpful with your challenges!
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Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.
Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.
If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.
If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?
Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?
So, when investing in areas they don’t really know, investors should research the different property Class submarkets.
Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:
Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.
Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
The City of Detroit has 183 Neighborhoods we’ve analyzed.
DM us if you’d like to discuss this logical approach in greater detail!
Logical Property Management4.9459 Reviews - Memphis, TN · Member since 2023 · 100 posts · 24 votes1y
Hi Jerry,
BP and local Facebook groups are a great resource for meeting local agents, investors, and lenders who can provide some solid insight into the markets you're interested in. It's also good to read local business journals and visit the chamber of commerce website.
Good luck and let me know if I can be any help!
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Jerry Zigounakis:
Their are a few out of state properties I am looking into. Just wondering what tools others use to analyze different markets to invest in like Growth, Economy, Neighborhoods, etc.
Hi Jerry! I definitely would pay attention to key macroeconomic stats such as population growth, job growth, and where companies are moving/developing. Next, I would look into where you can find the 1% rule (aka positive cash flow) and fast appreciation. If you're looking into best growing markets, I would recommend Columbus Ohio! biggest The macroeconomics are on fire here - population growth, job growth, and companies moving and developing here. For example Intel headquarters, Google, FB, Amazon, Nationwide, Honda, (recently Anduril announced another 4k jobs to Columbus). Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential. Lastly, the price point is still very cheap here in the sense that you can still find investment deals that hit the 1% rule for 120-180k! Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 1ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Quote from @Jerry Zigounakis:
Their are a few out of state properties I am looking into. Just wondering what tools others use to analyze different markets to invest in like Growth, Economy, Neighborhoods, etc.
Some of my investors look into Greater Cincinnati because they have family ties here. So having someone, or better yet, somewhere you are close to, is something people look for. But growth (economically and population) is probably the biggest one. I have people who will buy in areas that look not good at all but have great upside to be "pioneers" of an area as well. Example, A+ neighborhood 5 minutes away is seeing gentrification and someone buys a property that is in a D area, but maybe in 5 years they will still be holding that property and now that area is seeing a lot of growth. Basically a long winded way of saying growth
Sam McCormack Realtor - 1yMin ZhangBusiness MemberReal Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
Hi Jerry, BiggerPockets has some great calculators you can use to analyze deals. You can also check out Roofstock and Niche for insights on neighborhood grades and ratings. For rent comps, try Rentometer or Zillow’s "Price My Rental" feature.
Good luck!
- Real Estate Agent · Salt Lake City, UT · Member since 2020 · 490 posts · 205 votes1y
I am in the salt lake area! It is getting tough but there are still properties you can find even on market that will cash flow. Need to be able to think with the right mindset on how you can maximize the revenue of a property
happy to chat about northern Utah! Could be a good area for you
- 1yMarc RiceBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @Jerry Zigounakis:
Their are a few out of state properties I am looking into. Just wondering what tools others use to analyze different markets to invest in like Growth, Economy, Neighborhoods, etc.
Rent to price ratios, # of new building permits vs new residents.
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
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