Best cash flow cities for 2023

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Best cash flow cities for 2023

Johnnie Schneider
Investor · Member since 2020 · 18 posts · 18 votes

Hey there, my partner and I are looking to get our first rental property together in 2023. Just wanted to come on here and see what everyones favorite or best cash flow market is currently or moving into this new year. Our budget were looking to stay under is about 120k. Thanks !

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
3y

Just a heads up that these types of broad posts just end up with a bunch of not-so-hidden advertisement replies to "invest with me."

There are not many investors that are going to work really hard finding opportunities to then turn around and tell the world where their honey hole is.  Just keeping it real.

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  • Justin BrickmanBusiness Member
    Realtor · San Antonio, TX · Member since 2021 · 502 posts · 274 votes
    3y

    San Antonio!

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    0Reply
  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    3y

    Just a heads up that these types of broad posts just end up with a bunch of not-so-hidden advertisement replies to "invest with me."

    There are not many investors that are going to work really hard finding opportunities to then turn around and tell the world where their honey hole is.  Just keeping it real.

    24Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Killeen Texas. 

    0Reply
  • Jon Puente
    Lender · Charlotte, NC · Member since 2020 · 224 posts · 221 votes
    3y

    Hey Johnnie,

    Anywhere that is not major metro areas, or right downtown.  There are TONS of areas you can get houses for 100K-150K that would cashflow at the 1% rule or beyond. 

    Just depends on where you want to invest! Midwest areas have great options, but even southern states have great areas as well.

    4Reply
  • Nathan A.
    New to Real Estate · Sunnyvale CA and Maplewood, NJ · Member since 2022 · 257 posts · 161 votes
    3y
    Here's Dave Meyer's list.
    1Reply
  • Leo R.
    Investor · Member since 2021 · 591 posts · 695 votes
    3y

    @Johnnie Schneider if this is one of your first real estate investments, I'd suggest being very wary of chasing cashflow. It's the classic conundrum: C and D properties cashflow, but are nearly impossible to manage, A and B properties don't cashflow, but are manageable.

    All too often, we see forum posts by inexperienced aspiring investors who bought an OOS property that had "incredible cashflow on paper", and it turns out to be a disaster--a lip-sticked pig house in a D grade neighborhood, non-paying tenants, vacancy, property destruction/crime, and MIA PMs (and an inability to find a new PM--because no PM in their right mind wants to put in the significant effort it takes to manage a D property for the tiny returns the property pays them). 

    The best cash flowing markets are often not advisable for beginning investors--even less so for beginners trying to operate as a partnership, and even less so for beginners trying to operate as a partnership on OOS investments (all of which makes the operation exponentially more challenging, and nearly impossible in the C and D grade areas that have the best cashflow).

    ...now, if someone out there knows of a cashflowing A or B market with plentiful tenants and PMs, a strong and diverse economy, and low vacancy, I'm all ears  ;)    (but, as @Mike Dymski mentioned, if such a market exists, the local operators are understandably keeping it a secret).

    Does this mean it's impossible to get cashflow on manageable property? No. But in my experience, cashflow on a good property isn't "found", it's created (i.e.; via value add strategies). 

    Good luck out there!

    9Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Johnnie Schneider:

    Hey there, my partner and I are looking to get our first rental property together in 2023. Just wanted to come on here and see what everyones favorite or best cash flow market is currently or moving into this new year. Our budget were looking to stay under is about 120k. Thanks !


     Cleveland of course, It has been the number 1 overall rental market for 10 years and still going strong. 10% or better net caps are to be had for cash buyers. For 120k or less you can get a duplex with 850/ 850 or better, 

    Good Luck 

    0Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    3y

    Kansas City! Ideal for cashflow and affordability. 

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    3y
    Quote from @Mike Dymski:

    Just a heads up that these types of broad posts just end up with a bunch of not-so-hidden advertisement replies to "invest with me."

    There are not many investors that are going to work really hard finding opportunities to then turn around and tell the world where their honey hole is.  Just keeping it real.


     Honey Badger Don't Care

    4Reply
  • Simon Ashbaugh
    Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
    3y
    Quote from @Johnnie Schneider:

    Hey there, my partner and I are looking to get our first rental property together in 2023. Just wanted to come on here and see what everyones favorite or best cash flow market is currently or moving into this new year. Our budget were looking to stay under is about 120k. Thanks !


     Hey Johnnie, Dave Meyer wrote a good article about this. https://www.biggerpockets.com/... As stated in there, Detroit MI, Shreveport LA, and Cleveland OH stand in the top three. I work a lot in Cleveland and can say that at 120k you can find a lot of duplexes that will cashflow.

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Johnnie Schneider

    You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

    https://www.biggerpockets.com/...
    (BP search feature can be problematic, so we’ve also added links @ our website under View Cities & Neighborhoods We Service)

    Please send us any feedback via email, as we do not use the DM feature here.

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  • Joe HammelBusiness Member
    Real Estate Agent · Metro Detroit, MI · Member since 2018 · 612 posts · 666 votes
    3y

    @Johnnie Schneider

    Definitely Metro Detroit

    (my rental portfolio is here)

    Purchase: $80k-$130k

    Rent: $1200-$1500

    ROI: 10-14%

    Cash flow: $250-$350/door

    Appreciation: Double digit (for past 10 years, will gladly send data)

    Location: C+, B- (suburbs and certain markets)

    We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ever hear of Ford, Rocket mortgage, or Beaumont hospitals? All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

    The bad reputation comes from OOS investors wanting $20k D market properties. We don’t buy those lol.

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    4Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Johnnie Schneider

    it's wherever you can be successful.

    don't buy a random property you haven't seen 2,922 miles away.

    where are you located?  start with a market you can drive to.

    0Reply
  • Jay ThomasPro Member
    Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
    3y

    Houston, Texas is an excellent choice for real estate investors looking to maximize their cash flow in 2023. The city boasts a strong job market and attractive housing prices compared to the national average. In addition, Houston has many amenities to offer such as world-class dining, entertainment, and shopping options. With its low cost of living and high quality of life, it’s no wonder why Houston is one of the best cash flow cities for 2023! Investing in Houston now can set you up for success down the line – don’t miss out on this great opportunity!

    [email protected]832-889-5607
    0Reply
  • Dustin Street
    Real Estate Agent · Kansas City, MO · Member since 2022 · 147 posts · 40 votes
    3y

    120k is MORE than enough to get you a solid cash-flowing, and appreciating property in Kansas City. You could also take that 120 to a hard money lender and get 3-4 properties! Are you going to do long term or short term rentals?

    0Reply
  • Bhushan Shinkre
    Member since 2022 · 46 posts · 25 votes
    3y

    I don't look at cash flow as the most important metric.

    I'm looking at the market from the perspective of rent growth, price growth, their relative differential, low operating cost and then balanced GDP + entry point. The popular ones such as Austin IMO are priced out. The ones that fit the bill in my opinion are Oklahoma City and Birmingham / Huntsville (AL cities). You can go invest in Detroit or Cleveland, but the high operating cost will eat up your cap rate and you won't make much as a result. For the record, I'm invested in Chicago, Indianapolis and Birmingham.

    2Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    3y

    @Johnnie Schneider I would look in midwestern cities in the rust belt

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  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y
    Quote from @Bhushan Shinkre:

    I don't look at cash flow as the most important metric.

    I'm looking at the market from the perspective of rent growth, price growth, their relative differential, low operating cost and then balanced GDP + entry point. The popular ones such as Austin IMO are priced out. The ones that fit the bill in my opinion are Oklahoma City and Birmingham / Huntsville (AL cities). You can go invest in Detroit or Cleveland, but the high operating cost will eat up your cap rate and you won't make much as a result. For the record, I'm invested in Chicago, Indianapolis and Birmingham.

    I'd be careful making generalizations here. I own 12-doors in Detroit and I'd put my CoC returns up against any other city and bet that I'm coming out better than them. 

    It's easy to be dismisses of cities like Detroit, all the cool kids are doing it. But the folks that know the market and opportunity there are making a killing. I always tell people that won't touch Detroit "yet" that I'll be happy to unload my portfolio on them when they decide to finally pull the trigger because they'll be late to the game and I'll be selling for a crazy multiple :-)
    3Reply
  • Tyler LingleBusiness Member
    Real Estate Consultant · Indianapolis, IN · Member since 2021 · 440 posts · 292 votes
    3y
    Quote from @Leo R.:

    @Johnnie Schneider if this is one of your first real estate investments, I'd suggest being very wary of chasing cashflow. It's the classic conundrum: C and D properties cashflow, but are nearly impossible to manage, A and B properties don't cashflow, but are manageable.

    All too often, we see forum posts by inexperienced aspiring investors who bought an OOS property that had "incredible cashflow on paper", and it turns out to be a disaster--a lip-sticked pig house in a D grade neighborhood, non-paying tenants, vacancy, property destruction/crime, and MIA PMs (and an inability to find a new PM--because no PM in their right mind wants to put in the significant effort it takes to manage a D property for the tiny returns the property pays them). 

    The best cash flowing markets are often not advisable for beginning investors--even less so for beginners trying to operate as a partnership, and even less so for beginners trying to operate as a partnership on OOS investments (all of which makes the operation exponentially more challenging, and nearly impossible in the C and D grade areas that have the best cashflow).

    ...now, if someone out there knows of a cashflowing A or B market with plentiful tenants and PMs, a strong and diverse economy, and low vacancy, I'm all ears  ;)    (but, as @Mike Dymski mentioned, if such a market exists, the local operators are understandably keeping it a secret).

    Does this mean it's impossible to get cashflow on manageable property? No. But in my experience, cashflow on a good property isn't "found", it's created (i.e.; via value add strategies). 

    Good luck out there!


     This is a great comment and couldn't agree more. 

    As with anything, there are tradeoffs with real estate. I like to tell my investor clients, if you want to maximize cash flow, be prepared to maximize your active attention to it as well. You pay for what you get. 

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    1Reply
  • Megan Bridgette
    Member since 2023 · 6 posts · 0 votes
    3y
    Quote from @Travis Biziorek:
    Quote from @Bhushan Shinkre:

    I don't look at cash flow as the most important metric.

    I'm looking at the market from the perspective of rent growth, price growth, their relative differential, low operating cost and then balanced GDP + entry point. The popular ones such as Austin IMO are priced out. The ones that fit the bill in my opinion are Oklahoma City and Birmingham / Huntsville (AL cities). You can go invest in Detroit or Cleveland, but the high operating cost will eat up your cap rate and you won't make much as a result. For the record, I'm invested in Chicago, Indianapolis and Birmingham.

    I'd be careful making generalizations here. I own 12-doors in Detroit and I'd put my CoC returns up against any other city and bet that I'm coming out better than them. 

    It's easy to be dismisses of cities like Detroit, all the cool kids are doing it. But the folks that know the market and opportunity there are making a killing. I always tell people that won't touch Detroit "yet" that I'll be happy to unload my portfolio on them when they decide to finally pull the trigger because they'll be late to the game and I'll be selling for a crazy multiple :-)

     What part of Detroit do you invest in?  Are there some parts better than others?

    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    3y
    Quote from @Megan Bridgette:
    Quote from @Travis Biziorek:
    Quote from @Bhushan Shinkre:

    I don't look at cash flow as the most important metric.

    I'm looking at the market from the perspective of rent growth, price growth, their relative differential, low operating cost and then balanced GDP + entry point. The popular ones such as Austin IMO are priced out. The ones that fit the bill in my opinion are Oklahoma City and Birmingham / Huntsville (AL cities). You can go invest in Detroit or Cleveland, but the high operating cost will eat up your cap rate and you won't make much as a result. For the record, I'm invested in Chicago, Indianapolis and Birmingham.

    I'd be careful making generalizations here. I own 12-doors in Detroit and I'd put my CoC returns up against any other city and bet that I'm coming out better than them. 

    It's easy to be dismisses of cities like Detroit, all the cool kids are doing it. But the folks that know the market and opportunity there are making a killing. I always tell people that won't touch Detroit "yet" that I'll be happy to unload my portfolio on them when they decide to finally pull the trigger because they'll be late to the game and I'll be selling for a crazy multiple :-)

     What part of Detroit do you invest in?  Are there some parts better than others?


     I have 12-doors that are located in different areas. Absolutely some parts are better than others. I wrote a blog post about it not long ago.

    0Reply
  • Megan Bridgette
    Member since 2023 · 6 posts · 0 votes
    3y
    Quote from @Travis Biziorek:
    Quote from @Megan Bridgette:
    Quote from @Travis Biziorek:
    Quote from @Bhushan Shinkre:

    I don't look at cash flow as the most important metric.

    I'm looking at the market from the perspective of rent growth, price growth, their relative differential, low operating cost and then balanced GDP + entry point. The popular ones such as Austin IMO are priced out. The ones that fit the bill in my opinion are Oklahoma City and Birmingham / Huntsville (AL cities). You can go invest in Detroit or Cleveland, but the high operating cost will eat up your cap rate and you won't make much as a result. For the record, I'm invested in Chicago, Indianapolis and Birmingham.

    I'd be careful making generalizations here. I own 12-doors in Detroit and I'd put my CoC returns up against any other city and bet that I'm coming out better than them. 

    It's easy to be dismisses of cities like Detroit, all the cool kids are doing it. But the folks that know the market and opportunity there are making a killing. I always tell people that won't touch Detroit "yet" that I'll be happy to unload my portfolio on them when they decide to finally pull the trigger because they'll be late to the game and I'll be selling for a crazy multiple :-)

     What part of Detroit do you invest in?  Are there some parts better than others?


     I have 12-doors that are located in different areas. Absolutely some parts are better than others. I wrote a blog post about it not long ago.


     Got it, where can I find your blog post?  Thanks for getting back to me!

    0Reply
  • Noah McFarland
    Wholesaler · Sioux Falls · Member since 2023 · 3 posts · 2 votes
    3y

    Ohio and west Texas seem to be markets that would work for you. 

    1Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    3y
    Quote from @Johnnie Schneider:

    Hey there, my partner and I are looking to get our first rental property together in 2023. Just wanted to come on here and see what everyones favorite or best cash flow market is currently or moving into this new year. Our budget were looking to stay under is about 120k. Thanks !

     Definitely recommend Columbus, Ohio! Great mix of appreciation and cash flow. On top of that, population growth and jobs moving to Columbus - Intel, Nationwide, Honda, Amazon, etc. I see the other response say Cleveland, but my biggest complaint is that more people are leaving Cleveland than staying! As a local investor and agent, I'm still seeing tons of 1% and positive cash flow deals here!

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  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    3y
    Quote from @Johnnie Schneider:

    Hey there, my partner and I are looking to get our first rental property together in 2023. Just wanted to come on here and see what everyones favorite or best cash flow market is currently or moving into this new year. Our budget were looking to stay under is about 120k. Thanks !


     You can find some solid rentals in the Columbus in Linden, Hilltop, Franklinton, Vassor Village, Deshler Park, Driving Park, Mount Vernon, Milo Grogan. Most will be single families, some duplexes you can get less than 150k.

    [email protected]614-363-2787
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