How to shortlist cities for cash flow investing?
I'm new to Real Estate investing. I'm based out of bay area, California and the real estate here is really pricey. I'm looking at investing in small multi-family properties. It's pretty hard to find a cash flow generating investment property here. So I'm looking for opportunities elsewhere including out of state. Does anyone have a suggestion on how should i go about shortlisting a set of cities and neighborhoods where I can get positive cash flow (1% cash on cash return / month)? At present I'm looking more for cash flow than appreciation. However, I don't obviously want to be in a market where the home prices may correct significantly (>20%) if we do end up having a recession soon. Any suggestions highly appreciated.
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@Trevor Ewen provided a great answer and I couldn't agree more with his statement regarding relationships. I'd start with the "who". In addition to studying the demographics, consider areas where you may have previously lived or where you have family/friends/colleagues and let them know what you're looking for and ask if there's anyone within their network they could connect you with (other investors, brokers, property managers). Another option like @Basit Siddiqi said is building relationships at your local meetups with other investors and asking for referrals in their markets.
But if you are interested in learning more about how to evaluate markets based on key indicators I can recommend a free Udemy course created by Neal Bawa: