Choosing a Market for Small Multi-Family Deals

Multi-Family and Apartment Investing
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Choosing a Market for Small Multi-Family Deals

Justin Betz
Member since 2025 · 2 posts · 10 votes

Hi All,

I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

Thanks!

9Reply
564 views

Most Popular Reply

Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
6mo
Quote from @Justin Betz:

Hi All,

I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

Thanks!


You’re ALWAYS better off investing locally, where it’s easier to:

  • Learn the market
  • Network to find deals
  • Network to find contractors
  • Be more hands-on
  • Driveby property to keep tabs on it
  • Network to find a decent Property Management Company (PMC)

Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.

If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully outsourcing all of the above.

The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!

They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.

Then they’re shocked when their performance expectations aren't met😞

If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.

You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:

  • Many of them don't know/care what Class the properties are, so they're incompetent.
  • Others know exactly what they are doing, so should be labeled as crooks!
    EITHER WAY YOU LOSE!

Why is Property Class so important for investors to understand and apply in their investing strategies?

Because the Property Class dictates the Class of the tenant pool that the property will attract.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.

The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.

Why is that important?

Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?

Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.

We use the following to rank Property Classes, in order of importance:

  • Property Tenant Pool: closely linked to location, but not always.
  • Property Location: closely linked to tenant pool, but not always.
  • Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

Key metrics for each Property Class:

Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

FICO Score

Pct of Population

Default Probability

800 or more

13.00%

1.00%

750-799

27.00%

1.00%

700-749

18.00%

4.40%

650-699

15.00%

8.90%

600-649

12.00%

15.80%

550-599

8.00%

22.50%

500-549

5.00%

28.40%

Less than 499

2.00%

41.00%

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

For example, Metro Detroit has 132 cities and the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying to make better investing decisions.

Horror Stories from those that did NOT Understand What they were Buying:

https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain

https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss

https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs

https://www.biggerpockets.com/forums/963/topics/1195280-experience-of-oos-investing-in-cleveland-after-15-years

[email protected]248-209-6824
Logical Property Management4.9460 Reviews
WebsiteView Page
6Reply
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  • Paradise Epps
    Wholesaler · NY · Member since 2026 · 20 posts · 6 votes
    6mo

    Hey there! For the Ohio market, it’s quite affordable. Dayton is slightly more budget-friendly compared to Columbus. Most investors usually have multiple cities and states that they prefer to invest in. So, you could consider Dayton, Columbus, and Toledo. If you’re interested in Kansas City, it’s another market that’s relatively inexpensive. However, I believe it ultimately depends on your investment goals. Land in Kansas City appears to be cheaper than anywhere else. If you’re into renting and subleasing, you could rent a house and sublease it out. This is another viable business model. I personally do this because I only want to buy properties in the place where I’ll eventually retire. That’s just my personal preference for the sake of making money. I also like to rent and sublease to avoid having long-term investments in properties that I may not want to own in the future. I’d love to connect with you if you’re interested. 

    2Reply
  • Jamie DietzBusiness Member
    Lender · Pittsburgh, PA · Member since 2015 · 175 posts · 90 votes
    6mo

    As you outlined each market has good and bad characteristics. You can spend months trying to pick the perfect market and never take action, or you can buy a solid first rental and start learning in real time.  As you outlined each market has good and bad characteristics.  Perhaps refocus on building your team (RE agent, Lender, Contractors etc.) and then work them to find our 1st deal. 

    Next Door Capital514 Reviews
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    2Reply
  • Alex Olson
    Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
    6mo

    Of course I partial to Kansas City. Its a great market and lots of awesome sub markets. Some are great for cash flow some are great for a bit of appreciation and cash flow. 

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!


    I have been buying in Columbus, Ohio, since 2017. I have done some BRRRRs, and they have been successful.

    I am following the rental registration they are trying to pass. They are running into issues with it, and it has not been voted on yet. I do not think it will be that material.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    3Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    6mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!


    You’re ALWAYS better off investing locally, where it’s easier to:

    • Learn the market
    • Network to find deals
    • Network to find contractors
    • Be more hands-on
    • Driveby property to keep tabs on it
    • Network to find a decent Property Management Company (PMC)

    Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.

    If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully outsourcing all of the above.

    The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!

    They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.

    Then they’re shocked when their performance expectations aren't met😞

    If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.

    You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:

    • Many of them don't know/care what Class the properties are, so they're incompetent.
    • Others know exactly what they are doing, so should be labeled as crooks!
      EITHER WAY YOU LOSE!

    Why is Property Class so important for investors to understand and apply in their investing strategies?

    Because the Property Class dictates the Class of the tenant pool that the property will attract.

    The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

    Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.

    The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.

    Why is that important?

    Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?

    Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

    So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.

    We use the following to rank Property Classes, in order of importance:

    • Property Tenant Pool: closely linked to location, but not always.
    • Property Location: closely linked to tenant pool, but not always.
    • Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

    Key metrics for each Property Class:

    Class A Properties:
    Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
    Tenant Default: 0-5% probability of eviction or early lease termination.
    Section 8: Class A rents are too high and won’t be approved.
    Vacancies: 5-10%, depending on market conditions.
    Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

    Class B Properties:
    Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
    Tenant Default    : 5-10% probability of eviction or early lease termination.
    Vacancies    : 10-15%, depending on market conditions.
    Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
    Section 8: Class B rents are usually too high for the Section 8 program.

    Class C Properties:
    Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
    Tenant Default: 10-20% probability of eviction or early lease termination.
    Section 8: Class C rents usually meet program requirements, proper screening still recommended.
    Vacancies: 10-20%, depending on market conditions and tenant screening.
    Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

    Class D Properties:
    Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
    Tenant Default: 20-30% probability of eviction or early lease termination.
    Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
    Vacancies: 20%+, depending on market conditions and tenant screening.
    Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

    Where did we get our FICO credit score information from?

    Check out this chart:

    FICO Score

    Pct of Population

    Default Probability

    800 or more

    13.00%

    1.00%

    750-799

    27.00%

    1.00%

    700-749

    18.00%

    4.40%

    650-699

    15.00%

    8.90%

    600-649

    12.00%

    15.80%

    550-599

    8.00%

    22.50%

    500-549

    5.00%

    28.40%

    Less than 499

    2.00%

    41.00%

    Source: Fair Isaac Company

    Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

    For example, Metro Detroit has 132 cities and the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying to make better investing decisions.

    Horror Stories from those that did NOT Understand What they were Buying:

    https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain

    https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss

    https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs

    https://www.biggerpockets.com/forums/963/topics/1195280-experience-of-oos-investing-in-cleveland-after-15-years

    [email protected]248-209-6824
    Logical Property Management4.9460 Reviews
    WebsiteView Page
    6Reply
  • Jeremy TaggartBusiness Member
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
    6mo

    @Justin Betz the older housing stock is an advantage for Pittsburgh if you want to do the BRRRR method, IMO. More value add opportunities than a newer city. If you find a 2-4 unit in a desirable neighborhood with higher ARV and rents you can get a good chunk of equity along with continued upside once it's stabilized.

    DHRE- The Jeremy Taggart Team590 Reviews
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    1Reply
  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    6mo

    Hey @Justin Betz, don't overthink the "perfect" market, pick one where you can build a strong property manager + contractor team and where deals still pencil with conservative rents and a real repair budget. Columbus can be a solid light value-add BRRRR market if you buy in stable, renter-heavy neighborhoods and don't rely on best-case numbers.

    [email protected]614-490-1163
    Kerlous Tadres | Reafco Real Estate541 Reviews
    WebsiteView Page
    3Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    6mo

    I know Columbus fairly well.  I don't know much about Pittsburgh, which may be a good thing.  Everyone on these forums that is buying OOS (assuming you are not local to Columbus or Pittsburgh) seems to have Columbus on their list.  

    At the end of the day, market selection for this size of deal is not the determinant of success.  Knowing the market you buy in, inside and out, stories within the submarkets, likely tenant base, finishes and amenities needed to maximize rents are all going to drive success within a market more than the actual broader market you pick.

    Lastly, whichever market you pick, factor in the travel costs to get in and out of the market a couple times per year, or more.  If one of those two has a direct flight (assuming you need to fly in), that would be better than connecting.  

    2Reply
  • Min ZhangBusiness Member
    Real Estate Agent · Member since 2022 · 1k+ posts · 1k+ votes
    6mo

    I'd start by talking to investors who are already active in the market and hearing about their experiences. Spend some time really getting to know the neighborhoods, and reach out to a couple of property management companies to see what they offer. You should also start running the numbers on a few deals to see if they make sense for your BRRRR strategy. The goal is to learn the market and get comfortable with the process, rather than waiting for the "perfect" city

    [email protected]614-412-2912
    Reafco.512 Reviews
    View Page
    2Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    6mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!

    The Columbus market is a great choice for the BRRRR strategy. It provides solid rent-to-price ratios, steady population and job growth, landlord-friendly, and a wide range of experienced property management companies. I currently own more than 60 doors here and have completed several BRRRR projects. I genuinely enjoy this strategy as it can be highly rewarding, but it's important to recognize that it also comes with significant execution risk. The key is assembling a dependable contractor, a great PM, and a local, investor-friendly agent who understands the market well.

    1Reply
  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 956 votes
    6mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!


    You’re definitely not overthinking it, picking that first market matters, but it doesn’t need to paralyze you. The Midwest is still one of the strongest BRRRR markets for out-of-state investors, even with the potential policy shifts; the fundamentals, population growth, job diversity, and steady rent demand are what really drive returns. If you want lighter value-add with solid cash flow potential, Midwest markets all fit that profile too, with plenty of 2–4 units that don’t require 1950s-era gut rehabs. The biggest advantage in the Midwest is that you can pair affordable entry prices with reliable property management, so you can confidently invest remotely. Don’t feel pressure to find “the perfect” market. Pick one with stable demand, numbers that make sense, and a team you trust, and you’ll learn way more by getting that first deal done than by researching for another year.
    [email protected]614-418-6081
    2Reply
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    6mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!

     You are doing the right thing by getting started and the right platform @Justin Betz. 

    OOS investing is very easy if you have the right team in place. First, I would work to identify a good market. I recommend looking in the Midwest since the states are landlord friendly, tons of tech investments, and your money goes so much further.

    Connect with a good investor agent that can send you both offmarket/onmarket deals and connect you with their team of lenders, contractors, property managers. Buy deals at 75% ARV rules in B- or C+ areas.

    Have your agent help you scope work and use inspection report to create final quote. Make sure you have enough data points from your ARV and use comps as examples to choose layout/materials.

    Good luck and reach out if you have any questions.

    [email protected]614-802-5698
    ReafCo | Ahmed Group 539 Reviews
    WebsiteView Page
    2Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    6mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!

    Hey Justin, welcome to BiggerPockets! It sounds like you’re thinking through this the right way by focusing on your criteria and understanding why you want to invest out of state. When it comes to small multi-family deals with the BRRRR strategy, the key is balancing entry price, rehab scope, and rental demand—sometimes it’s less about the “perfect” market and more about finding a market where the numbers make sense and you can reliably manage light to moderate rehabs. There are still markets beyond the ones you mentioned that offer older 2–4 unit properties that can be improved without full gut rehabs, but it often requires digging into local neighborhoods, understanding rent comps, and building relationships with local property managers and contractors. Some investors focus on midwestern or sunbelt cities where purchase prices are low enough to hit the 1% rule, rehab costs are manageable, and cash flow can be positive even with property management in place. The important part is getting your first deal done while sticking to your criteria, because experience managing your first small multi-family, even if it’s not perfect, will teach you more than any research alone. Happy to connect and answer any questions you have!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9120 Reviews
    WebsiteView Page
    3Reply
  • Carlos Gonzalez
    Investor · Phoenix, AZ · Member since 2015 · 346 posts · 170 votes
    6mo

    @Justin Betz

    Phoenix is where is what and secondary markets.

    Hit me up.

    I’m the Fourplex guy in twitter. I’ll help you out.

    0Reply
  • Tony Sgrazzutti
    Member since 2025 · 5 posts · 2 votes
    6mo
    I was taught that it is almost always better to start locally as you can find better submarkets and be closer to the property when something goes wrong. The first deal is supposed to be a masterclass on the execution of strategies outlined in the books you have mentioned. The first deal is not supposed to make you rich but it is supposed to teach you how the whole process works. Many people recommend that you self manage your first few properties so you can understand when people on your team are making mistakes so you can solve the problems before they get out of hand.
    0Reply
  • Stephen Geluz
    New to Real Estate · Los Angeles, CA · Member since 2023 · 83 posts · 29 votes
    6mo

    You’re asking thoughtful questions. That alone probably puts you ahead of most beginners.

    1Reply
  • Eric FernwoodBusiness Member
    Realtor · Las Vegas, NV · Member since 2014 · 997 posts · 1k+ votes
    6mo

    Hello @Justin Betz,

    You are right to spend time selecting the right investment city. The city is the most important decision because the city determines long-term financial performance. Choose a city based on your financial goals, not opinions.

    Lifelong financial independence is not a one-time event or a fixed number of dollars. It requires a reliable rental income that maintains your purchasing power. Purchasing power is how much goods and services your money can buy over time. To achieve this, you need a rental income that meets two conditions.

    • Rents must outpace inflation: Your rental income must increase faster than inflation to keep up with rising costs. Cities with strong and consistent population growth are more likely to support this.
    • Income must last your lifetime: Your tenants need stable jobs and rising incomes, or rent growth will stall. Most companies only last 10 to 18 years. Strong cities keep attracting new employers that replace lost jobs. These cities have low crime, a metro population over one million people (for solid infrastructure and worker pools), and are affordable for businesses to operate in.

    You cannot evaluate every city, so start with a short list of potential cities and then eliminate any city that does not meet additional requirements.

    1. Population growth: Select cities with a metro population over 1 million and significant and sustained population growth. [Source]
    2. Low crime: Avoid high-crime cities in this list by CBS.
    3. Low operating costs: High costs can turn a good property into a bad investment. Use Google or an AI to determine the business “climate.” Two good barometers are the cost of homeowners insurance and property tax rate. [Source - home owner’s insurance, not including Florida. Source - Homeowners insurance for Florida.] [Source - Average real estate tax rate]
    4. No rent control: Rent restrictions can limit your ability to raise rent and manage tenants. Avoid these markets. Use Google or AI to determine if the city or state has any form of rent control. Example prompt: Does [city] have any form of rent control.
    5. Rising personal income: This is a long-term investment. Rent cannot grow unless local incomes grow. The St Louis reserve is an excellent source for this kind of information. For example, here is the personal income growth for Clark County Nevada (Las Vegas metro).
    6. Local investment team: General knowledge from books, seminars, podcasts and websites is great, but local expertise is critical. Only an experienced local investment team can provide the experience, processes, local knowledge, and resources needed to select, validate, inspect, renovate, and monetize your property

    Cities that meet all of the above requirements are worth further investigation.

    [email protected]702-358-8884
    FERNWOOD Team, KW VIP Realty520 Reviews
    WebsiteView Page
    0Reply
  • Christian HwangPro Member
    Member since 2023 · 30 posts · 17 votes
    6mo

    Hey Justin. A lot of great input from fellow BP members here, and I love how you're using ai as a thought partner.

    Just wanted to echo on not getting too caught up with analysis paralysis. I'm currently developing duplexes in Houston. Houston is one of the more affordable markets to enter for infill construction.

    Happy to connect, and share more about some of the hurdles I had to go through while building in Houston.

    1Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    6mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!

    I own 50+ unis in Columbus, OH. Happy to share my experience!

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
    WebsiteView Page
    1Reply
  • Vijay FriedmanBusiness Member
    Miami, FL · Member since 2026 · 766 posts · 123 votes
    4mo
    Quote from @Justin Betz:

    Hi All,

    I am looking for some assistance with figuring out how to choose my first market for small (2 - 4 Unit) Multi-Family investment property deals. Over the past couple of years I have been reading lots of real estate investing books and working on figuring out financing for my initial deals. After reading about numerous strategies in various books, including the Multifamily Millionaire by Brandon Turner & Brian Murray, I am sold on the strategies introduced in the Multifamily Millionaire. I am currently working on setting my Crystal Clear Criteria which of course means picking a market/location to invest in.

    I know for sure that I intend to invest out of state due to low Multi-Family inventory in my state (at least for small 2 - 4 unit properties) outside of well known risky/dangerous areas. In addition, the tenant/landlord laws in my state heavily favor tenants. Last, the home prices in my state are too high to support the BRRRR strategy that I am aiming to use (again outside of extremely risky/heavy rehab areas).

    I have researched some states and cities that may be well suited to find Multi-Family deals and I used ChatGPT to try to speed up the search. According to ChatGPT, Columbus, OH may be my best option with Pittsburgh, PA as a backup. However, I was hesitant to simply rely on the results of an AI and my own research yielded the following main concerns for each market.

    Columbus, OH: Potential for tenant/landlord laws to shift in favor of tenants in the coming months and more administrative requirements for the state/city in terms of rental properties.

    Pittsburgh, PA: Older homes (most older than 1950) - More likely to have a lot of properties that require significant rehab.

    If I am trying to select an out of state market with the intention of using the BRRRR method and property management, are there better markets currently than the two I mentioned? I am looking for properties value add opportunity, but only using light rehab with some moderate tasks potentially mixed in as needed.

    I appreciate any replies! I have been to meetings for my local Real Estate Investor Association but most investors there are focused on single-family properties within my state. I am hoping some of you with experience in this area can offer some insight. Maybe I am putting too much emphasis on picking the right first market rather than simply getting my first deal?

    Thanks!

    @Justin Betz

    you're thinking about this the right way. For small multifamily/BRRRR, I'd compare markets not just by price and inventory, but also rent strength, taxes, insurance, rehab risk, landlord laws, and whether the numbers support DSCR or bridge financing. Once you identify a few target properties, financing terms can help narrow down which deal actually works

    786-656-0387
    DreamPoint Capital
    WebsiteView Page
    0Reply
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