Question how do you find cash flow property areas???

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Question how do you find cash flow property areas???

Christopher Owens
New to Real Estate · Bremerton · Member since 2020 · 25 posts · 9 votes

hey guys,

how do you find cash flow area right now around me is a appreciation market but im looking for a cash flow area. How do you find your area for long distance investing do you just guess and pick a state and work it? Do you know people in different areas and ask them? Is there a website you use? 

thank you 

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Michael MagnoBusiness Member
Real Estate Agent · Wadsworth, OH · Member since 2017 · 234 posts · 168 votes
5y

Christopher welcome to BP.  You should check out Northern Ohio (Cleveland) for cash flowing properties.  It's a great area, with solid returns.  

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  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    5y

    It's all about the numbers with dollar signs in front.  Calculate/analyze markets for potential cash flow based on rents and expenses.

    2Reply
  • Beau Watson
    Rental Property Investor · Atlanta, GA · Member since 2019 · 90 posts · 73 votes
    5y

    @Christopher Owens

    Do what you just did.... ask a forum. Google. Then narrow down by your price point. Connect with a few wholesaler/realtors in the narrowed down areas and have them start sending you properties. They will also know area and you can ask questions of them.

    I like Covington, GA. Blue collar. Lots of cash flow. Not a huge amount of appreciation.

    Bought a duplex there for $105. $10k repairs. And it rents for $875 a unit. No vacancy issues.

    1Reply
  • Randall E Collins
    Specialist · Member since 2021 · 267 posts · 113 votes
    5y

    I am a scout for properties in the Dallas Tx and surrounding area. Therefore I would suggest you find a scout for your area of interest. A scout has access to various websites, can do the foot work, meet with real estate agents, attend auctions, inspect the property, oversee construction on fix and flip properties, all on your behalf. Would also save you travel cost and time.

    1Reply
  • Michael MagnoBusiness Member
    Real Estate Agent · Wadsworth, OH · Member since 2017 · 234 posts · 168 votes
    5y

    Christopher welcome to BP.  You should check out Northern Ohio (Cleveland) for cash flowing properties.  It's a great area, with solid returns.  

    7Reply
  • Andrew Weiner
    Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
    5y

    Do your research and find a place your comfortable with.  The people you work with that help you find and operate your property will ultimately be what drives your success.  We hopefully prevent our clients from making bad decisions and help them mitigate the unexpected in the easiest way possible.

    2Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    Look through the forums. There are tons of discussion about the best cash-flowing markets. Narrow it down to a few states/cities that interest you and research them. Find investment property for sale, figure out what it would cost to purchase, what they would rent for, and crunch the numbers.

    People rarely have wealth drop in their lap. You need to educate yourself and put in the effort. In this case, that requires doing some research and math until you know the market.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Randall E Collins:

    I am a scout for properties in the Dallas Tx and surrounding area. Therefore I would suggest you find a scout for your area of interest. A scout has access to various websites, can do the foot work, meet with real estate agents, attend auctions, inspect the property, oversee construction on fix and flip properties, all on your behalf. Would also save you travel cost and time.

    done correctly this can be a good service.. its like We go Look.. only more defined. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Nathan Gesner:

    Look through the forums. There are tons of discussion about the best cash-flowing markets. Narrow it down to a few states/cities that interest you and research them. Find investment property for sale, figure out what it would cost to purchase, what they would rent for, and crunch the numbers.

    People rarely have wealth drop in their lap. You need to educate yourself and put in the effort. In this case, that requires doing some research and math until you know the market.

    Also I think one needs to define cash flow !  every property that has rental income cash flows positive if you pay cash and the operating expenses are less than rent..

    If the metric is it must be positive cash flow after expenses with a minimum amount down  IE max leverage.. This is where one needs to

    start looking at Purchase price / rents   and come up with a formula they are comfortable with..  On BP it tends to be   100k/ 1k rents.. Although in many markets this is getting tougher without taking on some collection risks. 

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  • Tucker Cummings
    Investor · Raleigh, NC · Member since 2019 · 433 posts · 743 votes
    5y

    Just as a general rule of thumb, look at the secondary and tertiary markets around the bigger cities. For example, I live in Raleigh, NC, but it's tough to cash flow in Raleigh, and the expensiveness and competitive landscape makes it a little higher barrier to entry.

    Go outside of Raleigh and you have Wake Forest, Durham, Knightdale (where I live), Garner, Apex, Cary and a few other little towns. This is the secondary market. Some, not all, of these suburbs you can cash flow moderately. 

    Go a little further outside of those and you get places like Benson, Wendell, Clayton, Louisburg, Youngsville, Holly Springs, Morrisville, Fuquay, and several other towns. This is the Tertiary market. People in this area will still drive 30-45 minutes into Raleigh for their job, but they'll live here because the housing price per square foot is 1/2 the cost of Raleigh houses, but rent is maybe 3/4 the cost of what you might find in Raleigh. In other words the rent depreciates much slower than the house cost the further you go away from a city. 

    Also look at college and military towns for rent by room situations. This is my preferred method and gives you pseudo-multifamily benefit while getting single family homes. 

    4Reply
  • Dennis Wayne
    Member since 2020 · 339 posts · 356 votes
    5y

    If it’s a good deal it won’t be on the mls I can assure you that so if your combing on market properties your wasting your time

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    5y

    @Christopher Owens  its all about the numbers. Best cash flowing props are in the mid west,,, net caps from 10- 14% 

    Good Luck 

    0Reply
  • Chris Gould
    Investor · Denver, CO · Member since 2021 · 29 posts · 70 votes
    5y

    @Christopher Owens

    Hey Chris, the Midwest is kinda known for cash flow. I'd look in places like Louisville, Memphis, Indianapolis, Columbus etc. smaller spreads dollar wise but your ROI will be way higher in these market. For example, you could get a duplex from a wholesaler in Indy for around $80k that grosses $1,400/mo in rent. We had one of those come across recently.

    I can’t speak to higher priced markets but the Midwest is def known for cash flow. Good luck! 💪🏻

    2Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Christopher Owens

    Look at price to rent ratios across the US. The state of Ohio (and all the Midwest) has great numbers and cash flowing properties.

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  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Christopher Owens Buy with cash. It will cash flow, I promise.

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  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    @Christopher Owens 

    There is a lot of chatter about OH right now; however, you might also want to look at your backyard there in WA to see if there some up and coming markets. 

    1Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    5y
    Originally posted by @Beau Watson:

    @Christopher Owens

    Do what you just did.... ask a forum. Google. Then narrow down by your price point. Connect with a few wholesaler/realtors in the narrowed down areas and have them start sending you properties. They will also know area and you can ask questions of them.

    I like Covington, GA. Blue collar. Lots of cash flow. Not a huge amount of appreciation.

    Bought a duplex there for $105. $10k repairs. And it rents for $875 a unit. No vacancy issues.

     Great.  Now what's the only important number?

    0Reply
  • Beau Watson
    Rental Property Investor · Atlanta, GA · Member since 2019 · 90 posts · 73 votes
    5y

    @Joe Villeneuve

    Many numbers are important in the real estate game... which one are you referring to?

    0Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    5y

    The one you left out...cash flow.

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Christopher Owens:

    hey guys,

    how do you find cash flow area right now around me is a appreciation market but im looking for a cash flow area. How do you find your area for long distance investing do you just guess and pick a state and work it? Do you know people in different areas and ask them? Is there a website you use? 

    thank you 

     I would check out Columbus, Ohio. It has great cash flow and has an amazing appreciation growth rate.

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  • Aigo Pyles
    Flipper/Rehabber · Memphis, TN · Member since 2020 · 758 posts · 285 votes
    5y

    You do your research through forums, Google, etc. Based on numbers, you'll find cash flow properties. 

    0Reply
  • Aaron Singer
    Investor · AZ · Member since 2019 · 57 posts · 22 votes
    5y

    Hi @Christopher Owens,

    I haven't read through all the comments here, but I'm sure the Midwest markets have been highlighted. I currently invest in Indianapolis - strong REI market, but especially for cashflow. Note that much of Indianapolis is neighborhood by neighborhood and often street by street. I can't speak much about the other Midwest markets.

    As a general rule, utilize the 1% rent/price ratio rule when analyzing markets and deals, and that should tell you which markets/areas have strong cashflow. Just be weary of anything approaching 2%.

    Happy to discuss further, especially if you're interested in Indy.

    Aaron

    0Reply
  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    5y

    @Christopher Owens start with identifying the affordable markets around the country. These tend to be in the Midwest and Southeast. When you're looking at affordability however, be careful that you are not looking in the hoods where you'll see $40K-$50K properties. Look for markets with affordable median prices. You should look for more than just cash flow however. There are many markets that cash flow short term but are in decline. The have declining populations, declining jobs and rust belt industries and economies. Here are the most important factors to look for.

    * Strong rent/price ratios
    * Low property taxes and insurance rates
    * Growing populations and jobs
    * Modern, diverse economies
    * Landlord friendly laws

    Personally, I think that Indianapolis and Kansas City has a good combination of the above criteria.

    1Reply
  • Rob Gillespie
    Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
    5y

    @Christopher Owens

    Do not believe everything that you read about cash flow. A lot of cash flow is only performing on paper and not in reality.

    Northeast Ohio has plenty of cash flow properties, but it is best to back off of the huge returns a little bit and get really nice returns that are still reliable.

    That’s my two cents.

    

    2Reply
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