City suggestions for buying SFR/small apartment for highest ROI

11 Replies

I'd like to buy single family homes or a small apartment and I'd like a list of cities to start researching. I'd appreciate city recommendations for home prices under $50k or small apartments under $600k with high ROI (probably with 25% down). Thanks for any suggestions.

Ron

I have heard good things about Cleveland Ohio.

I keep getting 2-3 bed SFR in Kansas City for 15-25k or turn key from 25-50.

6 plexes for 20-50 a unit.

Thanks!..

Coincidentally the one article I've read so far was on Cleveland!  From the article it was clear one must be familiar with the neighborhoods and the difference between good and bad are just blocks apart.  Probably the same with all cities...

@Ron Takeda  welcome to the site.

there are very good investment areas as well as very bad investment areas in Cleveland. 

@Ron Takeda  I like both Indianapolis and Kansas City a lot for cash flow. Indy has always been considered one of the most affordable markets in the country and both of these markets have strong economies. You can get info on both on my website at www.investwithpinnacle.com.

Feel free to contact me if you'd like more info on either.

Originally posted by @Ron Takeda:

Thanks!..

Coincidentally the one article I've read so far was on Cleveland!  From the article it was clear one must be familiar with the neighborhoods and the difference between good and bad are just blocks apart.  Probably the same with all cities...

 Indianapolis is very much like this.  One can not just sort by a zip code.  You need a good local team that knows the area to point you in the right direction.

I concur with @James Wise  - Cleveland has tremendous opportunities, though prices have risen in recent years. Naturally, do your research - there are parts of the city where you will not want to own property. Stick to the 'burbs. 

@Ron Takeda  I'm familiar with several Midwest cities, most recently Dayton and Cincinnati. The low income areas are frequently a patchwork that changes from block to block. The prices don't change much, but the character of the residents and buildings change rapidly.

It's unfortunate that many out of state investors don't understand this and end up with houses on the lesser block with expectations of performance based on the better block.

Do your research, spend some time in the city you want to invest in, and build a good local team.

As an example in Dayton, you can get a decent SFH for 30K and rent it for 550-600. A little better area for 40-50K will get 650-725 in rent.

st Louis is good. You can buy a sfr for around 23k and get rents of 650 per month. Kansas city is similar but you might have to pay 28k to get 650 per month. You just need the right property manager and person on the ground who can find these homes in the decent areas.

@Gordon Cuffe 

In my experience, there isn't any property manager that can make these cheap properties with low rents perform. They are always going to be in challenging areas with difficult tenants. These are generally "D" class properties.

Originally posted by @Mike D'Arrigo:

@Gordon Cuffe 

In my experience, there isn't any property manager that can make these cheap properties with low rents perform. They are always going to be in challenging areas with difficult tenants. These are generally "D" class properties.

 I find properties under 25k all the time in St. Louis that are not in D neighborhoods. Many with long term tenants. I invest in many c neighborhoods and for 35 to 40k I can find great properties rented for $900 plus in B neighborhoods. St. Louis is a unique market haven't found anything else like it. 

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