Best COC market for under $200k purchase price?

Multi-Family and Apartment Investing
2yFollow

Best COC market for under $200k purchase price?

Patrick Murray
Member since 2023 · 13 posts · 5 votes

Hi all!

Things my first post on BP and I’ve loved geeking out on all of the different posts and different investing strategies.  

I started my search believing I’d get into STRs but now multi-family units are the most appealing to me for my entry to this world.  

Are there any markets that are getting true 20%+ COC returns for you all? I've been digging deeper into St. Louis and haven't found any yet once you factor in water/ sewage/ trash expenses. Starting to look into Cleveland too!

If so, please share what area and what your COC return is. Thanks so much!!





3Reply
98 views

Most Popular Reply

Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
2y

Ohio boys coming in 3, 2, 1...

I like midwestern college towns with a 400+ bed hospital for mid term rentals at that price point.

10Reply
See this reply in the discussion

35 Replies

Jump to latestLatest
  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    2y

    Ohio boys coming in 3, 2, 1...

    I like midwestern college towns with a 400+ bed hospital for mid term rentals at that price point.

    10Reply
  • Adrien Hebert
    Property Manager · Charlotte, NC · Member since 2017 · 39 posts · 21 votes
    2y

    Travis already hit on Ohio, and having lived in and invested in Dayton I can attest that is still accurate. NC, where I currently live and invest, is another area where you can still find great returns on investment for under $200k. The issue with COC returns is it is tied to how much cash you put into the investment so you can have people who are finding creative ways to put very little money in the deal and then claiming it is a home run when in reality it could be much more complicated.

    Also, you mentioned you started off interested in STRs but moved your attention to multis. The problem with that is so has everyone else. Finding multis that still have value is very hard in my market and surrounding markets without finding motivated off market sellers. 

    Welcome to BP and best of luck on your RE investing journey!

    4Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    2y
    Quote from @Patrick Murray:

    Hi all!

    Things my first post on BP and I’ve loved geeking out on all of the different posts and different investing strategies.  

    I started my search believing I’d get into STRs but now multi-family units are the most appealing to me for my entry to this world.  

    Are there any markets that are getting true 20%+ COC returns for you all? I've been digging deeper into St. Louis and haven't found any yet once you factor in water/ sewage/ trash expenses. Starting to look into Cleveland too!

    If so, please share what area and what your COC return is. Thanks so much!!






    I haven't heard of a 20% COC ROI... ever. Of course I am not a professional in other markets but I don't think any market will realistically have this return. Cincinnati you will find 6, 7, 8%. But Greater Cincinnati is also a growing area that has potential for more appreciation

    [email protected]859-443-4952
    Sam McCormack Realtor
    View Page
    1Reply
  • Michael ClarkBusiness Member
    Real Estate Agent · Scranton, PA · Member since 2022 · 13 posts · 7 votes
    2y

    Pennsylvania has some great markets for this. Specifically Scranton which has a 400 bed hospital (Geisinger) as well as 2 additional hospitals within a 10 minute drive. There are several colleges in Scranton as well (Most notably the U of Scranton). I'm an agent here and my clients have been getting 15-20%+ COC returns when putting down 20% on properties.

    0Reply
  • Patrick Murray
    OP
    Member since 2023 · 13 posts · 5 votes
    2y
    Quote from @Michael Clark:

    Pennsylvania has some great markets for this. Specifically Scranton which has a 400 bed hospital (Geisinger) as well as 2 additional hospitals within a 10 minute drive. There are several colleges in Scranton as well (Most notably the U of Scranton). I'm an agent here and my clients have been getting 15-20%+ COC returns when putting down 20% on properties.

    Thanks Mike!  Could you DM me some cash flow reports from some of your clients please? Would love to check out Scranton!  
    0Reply
  • Patrick Murray
    OP
    Member since 2023 · 13 posts · 5 votes
    2y
    Quote from @Adrien Hebert:

    Travis already hit on Ohio, and having lived in and invested in Dayton I can attest that is still accurate. NC, where I currently live and invest, is another area where you can still find great returns on investment for under $200k. The issue with COC returns is it is tied to how much cash you put into the investment so you can have people who are finding creative ways to put very little money in the deal and then claiming it is a home run when in reality it could be much more complicated.

    Also, you mentioned you started off interested in STRs but moved your attention to multis. The problem with that is so has everyone else. Finding multis that still have value is very hard in my market and surrounding markets without finding motivated off market sellers. 

    Welcome to BP and best of luck on your RE investing journey!

    Thanks so much for the response!  In regards to how much cash put down, I’m assuming a 20% down payment on a conventional loan with no more than $5k worth of improvements needing to be made on purchase.  With that being the case, would Dayton and parts of NC hit 20% COC return? 
    0Reply
  • Joe Chirdon
    Real Estate Agent · Harrisburg, PA · Member since 2016 · 159 posts · 82 votes
    2y

    You may want to look into Harrisburg, PA. Thanks!

    1Reply
  • Vadim F.
    Investor · Member since 2020 · 337 posts · 213 votes
    2y

    Are you looking for a cash flow market or appreciation market? Cash flow market you should be able to achieve that, if looking at an appreciation market might be tought.

    Cleveland is great for cash flow, but you need a solid team on the ground that know the city block by block.

    Detroit, same as Cleveland.

    Columbus - great appreciation market, cash flow not so much.

    Kansas City - same as Columbus

    0Reply
  • Patrick Murray
    OP
    Member since 2023 · 13 posts · 5 votes
    2y
    Quote from @Vadim F.:

    Are you looking for a cash flow market or appreciation market? Cash flow market you should be able to achieve that, if looking at an appreciation market might be tought.

    Cleveland is great for cash flow, but you need a solid team on the ground that know the city block by block.

    Detroit, same as Cleveland.

    Columbus - great appreciation market, cash flow not so much.

    Kansas City - same as Columbus


     Thank you for the response!  I'm looking for a cash flow market.  Any Cleveland real estate agents that know the market well and could share some numbers from current clients?  

    0Reply
  • Vadim F.
    Investor · Member since 2020 · 337 posts · 213 votes
    2y
    Quote from @Patrick Murray:
    Quote from @Vadim F.:

    Are you looking for a cash flow market or appreciation market? Cash flow market you should be able to achieve that, if looking at an appreciation market might be tought.

    Cleveland is great for cash flow, but you need a solid team on the ground that know the city block by block.

    Detroit, same as Cleveland.

    Columbus - great appreciation market, cash flow not so much.

    Kansas City - same as Columbus


     Thank you for the response!  I'm looking for a cash flow market.  Any Cleveland real estate agents that know the market well and could share some numbers from current clients?  

    James Wise is active here has a big online presence. Cleveland is tricky tho cuz it’s very block by block.
    0Reply
  • Journey TooleBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 39 posts · 21 votes
    2y

    @Patrick Murray

    I was going to come here and say Cleveland! (And Akron). I am an investor friendly agent here and would love to chat about what Cleveland has to offer

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Patrick Murray

    don't try to pick the market with the "best" cash flow, pick a market where you can be successful.  if possible, where you live.  but at a minimum, a market you know or have a connection to.  where relatives, live, where you went to school, where you vacation, etc.

    4Reply
  • Patrick Murray
    OP
    Member since 2023 · 13 posts · 5 votes
    2y
    Quote from @Nicholas L.:

    @Patrick Murray

    don't try to pick the market with the "best" cash flow, pick a market where you can be successful.  if possible, where you live.  but at a minimum, a market you know or have a connection to.  where relatives, live, where you went to school, where you vacation, etc.

    Funnily enough I grew up in Bethel Park (South Hills of Pittsburgh), I live in LA now though and it's too expensive for an investment.  Why would I choose a market I have a connection to though when those markets may be negative cash flow compared to markets that are thriving?

    0Reply
  • Patrick Murray
    OP
    Member since 2023 · 13 posts · 5 votes
    2y
    Quote from @Journey Toole:

    @Patrick Murray

    I was going to come here and say Cleveland! (And Akron). I am an investor friendly agent here and would love to chat about what Cleveland has to offer


    Thanks Journey, if you could DM me some deals that you helped clients with that are seeing 20% COC returns + I'd be interested!

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Patrick Murray:
    Quote from @Nicholas L.:

    @Patrick Murray

    don't try to pick the market with the "best" cash flow, pick a market where you can be successful.  if possible, where you live.  but at a minimum, a market you know or have a connection to.  where relatives, live, where you went to school, where you vacation, etc.

    Funnily enough I grew up in Bethel Park (South Hills of Pittsburgh), I live in LA now though and it's too expensive for me.  Why would I choose a market I have a connection to though when those markets may be negative cash flow compared to markets that are thriving?

     Because they're thriving doesn't necessarily mean when you invest, you'll thrive. Let's not confuse those. I'm confident the cash flow successful people in Cleveland would do laps around me if I entered Cleveland just cause it cash flows.

     I wouldn't say pick a market you have a connection to, but can get a great team and know it. Meaning you're willing to fly out there, meet the team(agent, contractor, PM), see the city and understand when you go look remotely you can identify certain good/bad areas. Go do the first close in that city, meet the title team. Get a connection. Scale in that city, so find one that's below your objective so in years time you're able to scale more there.

    1Reply
  • Patrick Murray
    OP
    Member since 2023 · 13 posts · 5 votes
    2y

    I'm looking to find a property in a market that already has tenants paying rent on that property that would return me 20%+ COC return. So I'm not necessarily looking for a market that was thriving, but that can still get me this return-- and some properties are already coming in that look like this. Cleveland, St. Louis, Scranton, Columbus.. I'd be happy to travel to any of these places.

    So you're saying finding a good cash flow property is nice, but I should make sure that I like the agent, PM, contractors, etc. before moving forward?

    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Patrick Murray

    i definitely wouldn't recommend choosing a market with negative cash flow, just because you know it - i'd say part of choosing a market where you "can be successful" implies a market where you can cash flow.

    i live and invest primarily in pittsburgh, though i also have rentals in other states and have a couple other markets i keep my eye on, and the reason I don't automatically tell folks looking to invest OOS to invest in Pittsburgh is because: it's really difficult to invest in Pittsburgh, even when you live in Pittsburgh.  since you're from here you know there are wide variations both between and even within neighborhoods.

    i totally get that LA proper is too expensive... i just don't think OOS in the midwest is the panacea it's been made out to be, especially with interest rates where they are. if you go on the MLS and buy a random house in Pittsburgh or Cleveland with an 8% rate, you probably won't cash flow. so that doesn't make sense either.

    that's why i'm encouraging CA residents not to write off investing within 2-4 hours.  there's just no substitute for being hands-on and in person, unless you're going to fly to your OOS market every month for a year.

    2Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y

    Cleveland of course ,  All in 100kish, 1300 in rent, 

    0Reply
  • Patrick Murray
    OP
    Member since 2023 · 13 posts · 5 votes
    2y
    Quote from @Bob S.:

    Cleveland of course ,  All in 100kish, 1300 in rent, 


    Can you expand please? Are you saying on a SFH worth around 100k you can grab $1,300 in rent?

    1Reply
  • Journey TooleBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 39 posts · 21 votes
    2y

    @Patrick Murray

    Just DMd you! 

    0Reply
  • Vadim F.
    Investor · Member since 2020 · 337 posts · 213 votes
    2y

    @Patrick Murray if you are planning to inherit tenants, you won't be receiving a 20% CoC return you are trying to achieve. You have to understand these investor properties were bought for pennies pre-pandemic compared to today. As an example lets use a property in Cleveland. The SFH costs you $80k in an OK area, you are inheriting tenants that are most likely paying $900mo, at best $950mo. Then take into consideration putting $ aside for vacancy, maintenance, and capex. The prior owner most likely paid $30-40k in 2019 for that property. Also, you have no idea who these tenants are, you have no idea how the prior landlord/pm screened them. and most of the time the properties are in bad shape.

    What I would highly recommend you do before jumping into investing, is learn the market you want to invest in. Learn the different neighborhoods, the tenant base of those areas...are they mostly self pay or are they govt subsidized. The different laws that are in place for that area that can make you or break you. And most importantly you need boots on the ground. They are your PM and Contractor, no one else. If your PM is also an agent thats great, but don't forget agents are salesmen/women. They get paid when you buy, so you have to make sure you have someone you trust.

    If you need any more info, feel free to DM me.

    2Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    2y

    Saw Cleveland mentioned. While Cleveland is mad dope, you can also check out Akron, Canton, Toledo, Cincinnati, Dayton and Youngstown.

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y
    Quote from @Patrick Murray:

    I'm looking to find a property in a market that already has tenants paying rent on that property that would return me 20%+ COC return. So I'm not necessarily looking for a market that was thriving, but that can still get me this return-- and some properties are already coming in that look like this. Cleveland, St. Louis, Scranton, Columbus.. I'd be happy to travel to any of these places.

    So you're saying finding a good cash flow property is nice, but I should make sure that I like the agent, PM, contractors, etc. before moving forward?


     The 20% return is pretty unrealistic. You want to like the team cause they'll make or break your experience wherever you get situated. 

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Patrick Murray:
    Quote from @Bob S.:

    Cleveland of course ,  All in 100kish, 1300 in rent, 


    Can you expand please? Are you saying on a SFH worth around 100k you can grab $1,300 in rent?


     All day every day, actually its worth about 110- 125k, I just got 900 for a 2 br all in fully renovated 45k, 3br all in 70k rent 1300, value 120kish, 

    All the best 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @V.G Jason:
    Quote from @Patrick Murray:

    I'm looking to find a property in a market that already has tenants paying rent on that property that would return me 20%+ COC return. So I'm not necessarily looking for a market that was thriving, but that can still get me this return-- and some properties are already coming in that look like this. Cleveland, St. Louis, Scranton, Columbus.. I'd be happy to travel to any of these places.

    So you're saying finding a good cash flow property is nice, but I should make sure that I like the agent, PM, contractors, etc. before moving forward?


     The 20% return is pretty unrealistic. You want to like the team cause they'll make or break your experience wherever you get situated. 


     I can them all day, :) 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free