Cleveland vs Los Angeles?
Investor · Cleveland · Member since 2026 · 4 posts · 9 votes
Cleveland vs Los Angeles?
Most Popular Reply
I try to balance both. But above all else, I stay in landlord friendly states. I would Never invest in a LA or NYC. Rent control may help values, but life's too short to deal with that stuff. And if you have to deal with an eviction, you'll be thankful to be in Ohio over California
30 Replies
- 3moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 968 votes
Quote from @Gabriel Cespedes:
Many investors focus on appreciation, while others prioritize consistent monthly cash flow.
Markets with lower purchase prices often provide stronger rent-to-price ratios, while higher-cost markets may offer stronger appreciation over time.
When comparing different markets, I usually look at:
• Monthly cash flow
• Vacancy
• Operating expenses
• Financing
• Long-term appreciation
For investors who own rental properties:
How do you balance cash flow versus appreciation when choosing where to invest?
I think the best approach is finding the right balance instead of chasing only one metric. Appreciation is great, but cash flow gives you the ability to hold through market cycles and continue acquiring properties. That’s why many investors look at Midwest markets, where you can often find better rent-to-price ratios while still targeting neighborhoods with long-term growth potential. At the end of the day, the deal and the fundamentals matter more than just the city name.
- 3moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
Cash flow is necessary to sustain operations, cover debt service payments and leave adequate reserves but wealth is generally created through appreciation and principal paydown. There's certainly a balance that's required but a critical part of the equation is whether the real estate can absorb the realities of todays opex and capex. In many instances it can't and that's a dealbreaker for me. I know many will say the same real estate I run from cash flows, but that's merely because they are deferring cap ex, not handling opex the way a prudent property owner does and is likely lifting a hammer. To each their own I suppose but that's not for me.
- Rental Property Investor · Member since 2026 · 56 posts · 30 votes3mo
@Gabriel Cespedes it's not one or the other, both are equally important and anyone who says otherwise doesn't know what they're talking about. If a market only works because of appreciation it's very high risk and not sustainable.. how would you cover repairs, capex, turnovers, vacancy? If it only works on cash flow then growth is limited. Here are a few useful metrics to focus on for each when looking at markets. There's some great affordable tools for tracking these across ZIP codes.
Cash flow:
- Gross Rental Yield
- Rent to Price Ratio (1% Rule)
- Cap Rate
- Vacancy Rate
- Market Rent GrowthAppreciation:
- Median Home Value
- Median Sale Price
- Median Listing Price
- Share Sold Above List
- Avg Sale-to-List Ratio I try to balance both. But above all else, I stay in landlord friendly states. I would Never invest in a LA or NYC. Rent control may help values, but life's too short to deal with that stuff. And if you have to deal with an eviction, you'll be thankful to be in Ohio over California
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes3moThat's a "would you rather have constipation or diarrhea" question. There are so many desirable places to invest that the question is a fallacy of presupposition that there aren't totally better choices available.
Quote from @Gabriel Cespedes:
Many investors focus on appreciation, while others prioritize consistent monthly cash flow.
Markets with lower purchase prices often provide stronger rent-to-price ratios, while higher-cost markets may offer stronger appreciation over time.
When comparing different markets, I usually look at:
• Monthly cash flow
• Vacancy
• Operating expenses
• Financing
• Long-term appreciation
For investors who own rental properties:
How do you balance cash flow versus appreciation when choosing where to invest?
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes3mo
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes3mo
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
New investors have a lot to consider in deciding between San Diego or Columbus, just to be fair.
I began my investing in Seattle WA and now invest entirely in Phoenix AZ, San Antonio TX, and Austin TX. Much more affordable & landlord friendly places.
I’ve been to & looked at San Diego CA & LA CA, where most of my clients come from, who now choose to Invest in AZ
The problems with San Diego, LA and Seattle are cash flow and tenant friendly regulations on an ongoing basis and oppressive taxes. It’s really hard to cash flow.
So, if you can weather a monthly cash flow crisis, it may pay off in the future, if a correction doesn’t occur. Corrections have always occurred in markets, the key is to not lose the property during that time. So, you have to have reserves to cover mortgages and taxes
I’ve been to and considered Indianapolis IN and Columbus OH, I like both places. But, since both places are some 2,000 miles away, it’s much smarter, in my opinion, to live close to your properties. So, if you choose to invest in Indianapolis or Columbus, both nice places, just move there. I think those cities are vibrant, steady investment vehicles, that have little downside risk outside of tornadoes and floods.
Investing OOS (out of state) still requires your attention for things like vacancies, property management competency and honesty, changing neighborhoods and the usual property concerns. I think most people who choose these cities are looking for a “deal” and wind up in less than desirable neighborhoods which causes most of the problems. Buy in neighborhoods where your wife can safely walk at night. It pays with appreciation in the investment.
Quote from @Ken M.:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
New investors have a lot to consider in where to invest. Be it San Diego or Columbus.
I began my investing in Seattle WA and now invest entirely in Phoenix AZ, San Antonio TX, and Austin TX. Much more affordable & landlord friendly places.
I’ve been to & looked at San Diego CA & LA CA, where most of my clients come from, who now choose to Invest in AZ
The problems with San Diego, LA and Seattle are cash flow and tenant friendly regulations on an ongoing basis and oppressive taxes. It’s really hard to cash flow.
So, if you can weather a monthly cash flow crisis, it may pay off in the future, if a correction doesn’t occur. Corrections have always occurred in markets, the key is to not lose the property during that time. So, you have to have reserves to cover mortgages and taxes
I’ve been to and considered Indianapolis IN and Columbus OH, I like both places. But, since both places are some 2,000 miles away, it’s much smarter, in my opinion, to live close to your properties. So, if you choose to invest in Indianapolis or Columbus, both nice places, just move there. I think those cities are vibrant, steady investment vehicles, that have little downside risk outside of tornadoes and floods.
Investing OOS (out of state) still requires your attention for things like vacancies, property management competency and honesty, changing neighborhoods and the usual property concerns. I think most people who choose these cities are looking for a “deal” and wind up in less than desirable neighborhoods which causes most of the problems. Buy in neighborhoods where your wife can safely walk at night. It pays with appreciation in the investment.
>The problems with San Diego, LA and Seattle are cash flow and tenant friendly regulations on an ongoing basis and oppressive taxes. It’s really hard to cash flow.
San Diego has historically been an outstanding cash flow market as my data in my post demonstrated. I am a bit surprised with your experience you equate initial cash flow to actual cash flow over a hold. San Diego has always had poor initial cash flow, but likely never worse than recently.
San Diego has tenant friendly regulations, more than I desire. However, the housing shortage has resulted in LL having a lot of power. The data shows San Diego is near lowest large city in the nation in both evictions and delinquency rates. The implication is San Diego has good tenants in spite of tenant friendly laws/regulations. Definitely landlords must know the tenant laws and their ramifications.
High taxes is largely mis-information.
The actual property tax rate collected is below national average (30th) at 0.7%. https://www.rocketmortgage.com/learn/property-taxes-by-stateThe median income tax paid is below 1%.
The mis-information is based on various items. Ca has the highest top income bracket in the nation. Note this affects very high income people; if married the top bracket is applied for income above $2m/year. The property tax rate may be below average but coastal Ca Markets are expensive. Even modest property tax rates can result in large property tax bills on expensive properties.
Historically it has not been hard to cash flow. Prior to 2022, it was even fairly easy to obtain properties that projected positive cash flow at purchase in my San Diego market. Today, I consider it hard to cash flow in all markets if purchased off mls, using market financing, without a value add. I see modest rent growth nationally. The cash flow is unlikely to increase similar to the recent past. Even modest negative cash flow may take quite a few years to achieve neutral cash flow. We are in a more challenging RE market than just a few years ago.
I invite anyone to fact check my posts.
Best wishes
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes3mo
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes3moWhat I am going by is people's experiences. They just haven't found suitable cash flow and situations in CA or that's where they'd stay. Most of my clients are from CA but invest in AZ. or maybe I'm just such a handsome guy, they want to be like me. ;-)
Quote from @Dan H.:
Quote from @Ken M.:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
New investors have a lot to consider in where to invest. Be it San Diego or Columbus.
I began my investing in Seattle WA and now invest entirely in Phoenix AZ, San Antonio TX, and Austin TX. Much more affordable & landlord friendly places.
I’ve been to & looked at San Diego CA & LA CA, where most of my clients come from, who now choose to Invest in AZ
The problems with San Diego, LA and Seattle are cash flow and tenant friendly regulations on an ongoing basis and oppressive taxes. It’s really hard to cash flow.
So, if you can weather a monthly cash flow crisis, it may pay off in the future, if a correction doesn’t occur. Corrections have always occurred in markets, the key is to not lose the property during that time. So, you have to have reserves to cover mortgages and taxes
I’ve been to and considered Indianapolis IN and Columbus OH, I like both places. But, since both places are some 2,000 miles away, it’s much smarter, in my opinion, to live close to your properties. So, if you choose to invest in Indianapolis or Columbus, both nice places, just move there. I think those cities are vibrant, steady investment vehicles, that have little downside risk outside of tornadoes and floods.
Investing OOS (out of state) still requires your attention for things like vacancies, property management competency and honesty, changing neighborhoods and the usual property concerns. I think most people who choose these cities are looking for a “deal” and wind up in less than desirable neighborhoods which causes most of the problems. Buy in neighborhoods where your wife can safely walk at night. It pays with appreciation in the investment.
>The problems with San Diego, LA and Seattle are cash flow and tenant friendly regulations on an ongoing basis and oppressive taxes. It’s really hard to cash flow.
San Diego has historically been an outstanding cash flow market as my data in my post demonstrated. I am a bit surprised with your experience you equate initial cash flow to actual cash flow over a hold. San Diego has always had poor initial cash flow, but likely never worse than recently.
San Diego has tenant friendly regulations, more than I desire. However, the housing shortage has resulted in LL having a lot of power. The data shows San Diego is near lowest large city in the nation in both evictions and delinquency rates. The implication is San Diego has good tenants in spite of tenant friendly laws/regulations. Definitely landlords must know the tenant laws and their ramifications.
High taxes is largely mis-information.
The actual property tax rate collected is below national average (30th) at 0.7%. https://www.rocketmortgage.com/learn/property-taxes-by-stateThe median income tax paid is below 1%.
The mis-information is based on various items. Ca has the highest top income bracket in the nation. Note this affects very high income people; if married the top bracket is applied for income above $2m/year. The property tax rate may be below average but coastal Ca Markets are expensive. Even modest property tax rates can result in large property tax bills on expensive properties.
Historically it has not been hard to cash flow. Prior to 2022, it was even fairly easy to obtain properties that projected positive cash flow at purchase in my San Diego market. Today, I consider it hard to cash flow in all markets if purchased off mls, using market financing, without a value add. I see modest rent growth nationally. The cash flow is unlikely to increase similar to the recent past. Even modest negative cash flow may take quite a few years to achieve neutral cash flow. We are in a more challenging RE market than just a few years ago.
I invite anyone to fact check my posts.
Best wishes
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
>If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that.
They would certainly have to put in some effort to reach out to me as I do not have my full name on BP. Not saying it would be that hard, but it is not as simple as looking up James wise.
There is a local RE agent that is fairly active on BP and we are connected on BP that sends me listings to our email and has met with one of my representatives who has not figured out the connection. It would not be hard for him to figure out, but he has not.
As for any potential future lending, I have thought about it for a few years but have not taken any further action. I likely would need a stronger relationship than virtually all BP relationships to get me started. The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Also I have 4 active protégés (a few more less committed) that I work with viritually 7 days a week. No charge. One is active at this moment leading her first tenant flip. She is not done with the tenant flip (day 10) due to placing new floors. She has already placed a qualified tenant at $4200/month (lease signed, the type of credit score that is low risk). She is taking over a larger rehab at 80% done (finishing is always challenging) because the current lead is going on a 1 month vacation and did not finish before his departure.
The only reason I need more money is as a score card. I am less inclined to use net worth as a score card because I am making decisions to benefit others over increasing our net worth yet our net worth continues to increase. Tough to use a score card that I am actively sabotaging.
You can keep proposing ways I could benefit from my posts but recognize the challenges of benefitting without using my full name on BP. I think virtually everyone that knows I am Dan H on BP figured it out in the reverse direction (more people knowing me from my RE market or wife’s accountability group then making the association to BP Dan H than have bothered to figure out who BP Dan H is IRL). I am not stating it is hard, I am saying few people exert the effort.
Best wishes
- I suspect most of your CA clients equate initial projected cash flow to actual cash flow. The historical rent numbers I provided in the earlier post show the folly with that thinking. We know with certainty that coastal Ca RE historically have produced outstanding cash flow over a long hold. Case Shiller, when they published the residential return by large city, showed the high cash flow achieved by the high appreciation markets for this century.
Quote from @Ken M.:
What I am going by is people's experiences. They just haven't found suitable cash flow and situations in CA or that's where they'd stay. Most of my clients are from CA but invest in AZ. or maybe I'm just such a handsome guy, they want to be like me. ;-)Quote from @Dan H.:
Quote from @Ken M.:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
New investors have a lot to consider in where to invest. Be it San Diego or Columbus.
I began my investing in Seattle WA and now invest entirely in Phoenix AZ, San Antonio TX, and Austin TX. Much more affordable & landlord friendly places.
I’ve been to & looked at San Diego CA & LA CA, where most of my clients come from, who now choose to Invest in AZ
The problems with San Diego, LA and Seattle are cash flow and tenant friendly regulations on an ongoing basis and oppressive taxes. It’s really hard to cash flow.
So, if you can weather a monthly cash flow crisis, it may pay off in the future, if a correction doesn’t occur. Corrections have always occurred in markets, the key is to not lose the property during that time. So, you have to have reserves to cover mortgages and taxes
I’ve been to and considered Indianapolis IN and Columbus OH, I like both places. But, since both places are some 2,000 miles away, it’s much smarter, in my opinion, to live close to your properties. So, if you choose to invest in Indianapolis or Columbus, both nice places, just move there. I think those cities are vibrant, steady investment vehicles, that have little downside risk outside of tornadoes and floods.
Investing OOS (out of state) still requires your attention for things like vacancies, property management competency and honesty, changing neighborhoods and the usual property concerns. I think most people who choose these cities are looking for a “deal” and wind up in less than desirable neighborhoods which causes most of the problems. Buy in neighborhoods where your wife can safely walk at night. It pays with appreciation in the investment.
>The problems with San Diego, LA and Seattle are cash flow and tenant friendly regulations on an ongoing basis and oppressive taxes. It’s really hard to cash flow.
San Diego has historically been an outstanding cash flow market as my data in my post demonstrated. I am a bit surprised with your experience you equate initial cash flow to actual cash flow over a hold. San Diego has always had poor initial cash flow, but likely never worse than recently.
San Diego has tenant friendly regulations, more than I desire. However, the housing shortage has resulted in LL having a lot of power. The data shows San Diego is near lowest large city in the nation in both evictions and delinquency rates. The implication is San Diego has good tenants in spite of tenant friendly laws/regulations. Definitely landlords must know the tenant laws and their ramifications.
High taxes is largely mis-information.
The actual property tax rate collected is below national average (30th) at 0.7%. https://www.rocketmortgage.com/learn/property-taxes-by-stateThe median income tax paid is below 1%.
The mis-information is based on various items. Ca has the highest top income bracket in the nation. Note this affects very high income people; if married the top bracket is applied for income above $2m/year. The property tax rate may be below average but coastal Ca Markets are expensive. Even modest property tax rates can result in large property tax bills on expensive properties.
Historically it has not been hard to cash flow. Prior to 2022, it was even fairly easy to obtain properties that projected positive cash flow at purchase in my San Diego market. Today, I consider it hard to cash flow in all markets if purchased off mls, using market financing, without a value add. I see modest rent growth nationally. The cash flow is unlikely to increase similar to the recent past. Even modest negative cash flow may take quite a few years to achieve neutral cash flow. We are in a more challenging RE market than just a few years ago.
I invite anyone to fact check my posts.
Best wishes
No one knows the future, but I suspect in my market more modest rent growth in the next few years and the cash flow situation will improve slowly versus historically the cash flow has improved quickly. I believe It is greater risk relying on significant rent growth in my market to significantly improve the cash flow in the near term than virtually ever.
it is a challenging RE market everywhere.
best wishes - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes3mo
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
>If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that.
They would certainly have to put in some effort to reach out to me as I do not have my full name on BP. Not saying it would be that hard, but it is not as simple as looking up James wise.
There is a local RE agent that is fairly active on BP and we are connected on BP that sends me listings to our email and has met with one of my representatives who has not figured out the connection. It would not be hard for him to figure out, but he has not.
As for any potential future lending, I have thought about it for a few years but have not taken any further action. I likely would need a stronger relationship than virtually all BP relationships to get me started. The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Also I have 4 active protégés (a few more less committed) that I work with viritually 7 days a week. No charge. One is active at this moment leading her first tenant flip. She is not done with the tenant flip (day 10) due to placing new floors. She has already placed a qualified tenant at $4200/month (lease signed, the type of credit score that is low risk). She is taking over a larger rehab at 80% done (finishing is always challenging) because the current lead is going on a 1 month vacation and did not finish before his departure.
The only reason I need more money is as a score card. I am less inclined to use net worth as a score card because I am making decisions to benefit others over increasing our net worth yet our net worth continues to increase. Tough to use a score card that I am actively sabotaging.
You can keep proposing ways I could benefit from my posts but recognize the challenges of benefitting without using my full name on BP. I think virtually everyone that knows I am Dan H on BP figured it out in the reverse direction (more people knowing me from my RE market or wife’s accountability group then making the association to BP Dan H than have bothered to figure out who BP Dan H is IRL). I am not stating it is hard, I am saying few people exert the effort.
Best wishes
And there it is....
The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Why come out here with all the B/S about "teaching for free. Not in it to make any money..." blah blah blah, circle jerk.... Nothing wrong with being paid for providing funding and teaching "proteges". But coming on here making claims like you aren't actively making money, doing it "for free" essentially lying about it, makes no sense man. You lie about this, what else are you lying about?
- None of my protégés, past or present, met me via bigger pockets so there goes that argument. I do get occasionally requests to mentor people on bigger pockets but I have never accepted any of those people.
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
>If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that.
They would certainly have to put in some effort to reach out to me as I do not have my full name on BP. Not saying it would be that hard, but it is not as simple as looking up James wise.
There is a local RE agent that is fairly active on BP and we are connected on BP that sends me listings to our email and has met with one of my representatives who has not figured out the connection. It would not be hard for him to figure out, but he has not.
As for any potential future lending, I have thought about it for a few years but have not taken any further action. I likely would need a stronger relationship than virtually all BP relationships to get me started. The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Also I have 4 active protégés (a few more less committed) that I work with viritually 7 days a week. No charge. One is active at this moment leading her first tenant flip. She is not done with the tenant flip (day 10) due to placing new floors. She has already placed a qualified tenant at $4200/month (lease signed, the type of credit score that is low risk). She is taking over a larger rehab at 80% done (finishing is always challenging) because the current lead is going on a 1 month vacation and did not finish before his departure.
The only reason I need more money is as a score card. I am less inclined to use net worth as a score card because I am making decisions to benefit others over increasing our net worth yet our net worth continues to increase. Tough to use a score card that I am actively sabotaging.
You can keep proposing ways I could benefit from my posts but recognize the challenges of benefitting without using my full name on BP. I think virtually everyone that knows I am Dan H on BP figured it out in the reverse direction (more people knowing me from my RE market or wife’s accountability group then making the association to BP Dan H than have bothered to figure out who BP Dan H is IRL). I am not stating it is hard, I am saying few people exert the effort.
Best wishes
And there it is....
The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Why come out here with all the B/S about "teaching for free. Not in it to make any money..." blah blah blah, circle jerk.... Nothing wrong with being paid for providing funding and teaching "proteges". But coming on here making claims like you aren't actively making money, doing it "for free" essentially lying about it, makes no sense man. You lie about this, what else are you lying about?
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit? I expect it would be over $250k invested (purchase and rehab). Note if it loses money, I will not expect the protégés to cover any losses. I do not expect much profit beyond the learning opportunity. I have also indicated that I could be willing to purchase a property that I typically would not based on my underwriting. This is because I could wait a long time to find something that meets my normal criteria and these protégés will go out on their own soon. This could also limit the profit. This truly is to teach them and maybe further my RE education.
I do not expect to make as much as I can make on that money elsewhere. This is due to 1) it being all of our first flip (inexperience at flipping) 2) it is a tough RE market. 3) me willing to purchase a flip that may not meet my typical underwriting criteria.
2 of the last 3 years we have given away more money than our earned income (our earned income is modest in part because we actively keep leverage high minimizing cash flow). We have enough money. I have every toy except a plane and I may buy that if I get my pilots license (which I have wanted to do for like 30 years but have not prioritized high enough to make it happen).
Keep trying if you desire but if I was actively trying to benefit from my BP posts I suspect I would have a users name that would not require people to try to determine who Dan H is IRL. Very few people would desire to put forth the effort.
Good luck
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes3mo
Quote from @Dan H.:
None of my protégés, past or present, met me via bigger pockets so there goes that argument. I do get occasionally requests to mentor people on bigger pockets but I have never accepted any of those people.Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
>If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that.
They would certainly have to put in some effort to reach out to me as I do not have my full name on BP. Not saying it would be that hard, but it is not as simple as looking up James wise.
There is a local RE agent that is fairly active on BP and we are connected on BP that sends me listings to our email and has met with one of my representatives who has not figured out the connection. It would not be hard for him to figure out, but he has not.
As for any potential future lending, I have thought about it for a few years but have not taken any further action. I likely would need a stronger relationship than virtually all BP relationships to get me started. The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Also I have 4 active protégés (a few more less committed) that I work with viritually 7 days a week. No charge. One is active at this moment leading her first tenant flip. She is not done with the tenant flip (day 10) due to placing new floors. She has already placed a qualified tenant at $4200/month (lease signed, the type of credit score that is low risk). She is taking over a larger rehab at 80% done (finishing is always challenging) because the current lead is going on a 1 month vacation and did not finish before his departure.
The only reason I need more money is as a score card. I am less inclined to use net worth as a score card because I am making decisions to benefit others over increasing our net worth yet our net worth continues to increase. Tough to use a score card that I am actively sabotaging.
You can keep proposing ways I could benefit from my posts but recognize the challenges of benefitting without using my full name on BP. I think virtually everyone that knows I am Dan H on BP figured it out in the reverse direction (more people knowing me from my RE market or wife’s accountability group then making the association to BP Dan H than have bothered to figure out who BP Dan H is IRL). I am not stating it is hard, I am saying few people exert the effort.
Best wishes
And there it is....
The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Why come out here with all the B/S about "teaching for free. Not in it to make any money..." blah blah blah, circle jerk.... Nothing wrong with being paid for providing funding and teaching "proteges". But coming on here making claims like you aren't actively making money, doing it "for free" essentially lying about it, makes no sense man. You lie about this, what else are you lying about?
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit? I expect it would be over $250k invested (purchase and rehab). Note if it loses money, I will not expect the protégés to cover any losses. I do not expect much profit beyond the learning opportunity. I have also indicated that I could be willing to purchase a property that I typically would not based on my underwriting. This is because I could wait a long time to find something that meets my normal criteria and these protégés will go out on their own soon. This could also limit the profit. This truly is to teach them and maybe further my RE education.
I do not expect to make as much as I can make on that money elsewhere. This is due to 1) it being all of our first flip (inexperience at flipping) 2) it is a tough RE market. 3) me willing to purchase a flip that may not meet my typical underwriting criteria.
2 of the last 3 years we have given away more money than our earned income (our earned income is modest in part because we actively keep leverage high minimizing cash flow). We have enough money. I have every toy except a plane and I may buy that if I get my pilots license (which I have wanted to do for like 30 years but have not prioritized high enough to make it happen).
Keep trying if you desire but if I was actively trying to benefit from my BP posts I suspect I would have a users name that would not require people to try to determine who Dan H is IRL. Very few people would desire to put forth the effort.
Good luck
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit?
No. I think you should stop pretending that you aren't tho. Quote from @James Wise:
Quote from @Dan H.:
None of my protégés, past or present, met me via bigger pockets so there goes that argument. I do get occasionally requests to mentor people on bigger pockets but I have never accepted any of those people.Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
>If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that.
They would certainly have to put in some effort to reach out to me as I do not have my full name on BP. Not saying it would be that hard, but it is not as simple as looking up James wise.
There is a local RE agent that is fairly active on BP and we are connected on BP that sends me listings to our email and has met with one of my representatives who has not figured out the connection. It would not be hard for him to figure out, but he has not.
As for any potential future lending, I have thought about it for a few years but have not taken any further action. I likely would need a stronger relationship than virtually all BP relationships to get me started. The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Also I have 4 active protégés (a few more less committed) that I work with viritually 7 days a week. No charge. One is active at this moment leading her first tenant flip. She is not done with the tenant flip (day 10) due to placing new floors. She has already placed a qualified tenant at $4200/month (lease signed, the type of credit score that is low risk). She is taking over a larger rehab at 80% done (finishing is always challenging) because the current lead is going on a 1 month vacation and did not finish before his departure.
The only reason I need more money is as a score card. I am less inclined to use net worth as a score card because I am making decisions to benefit others over increasing our net worth yet our net worth continues to increase. Tough to use a score card that I am actively sabotaging.
You can keep proposing ways I could benefit from my posts but recognize the challenges of benefitting without using my full name on BP. I think virtually everyone that knows I am Dan H on BP figured it out in the reverse direction (more people knowing me from my RE market or wife’s accountability group then making the association to BP Dan H than have bothered to figure out who BP Dan H is IRL). I am not stating it is hard, I am saying few people exert the effort.
Best wishes
And there it is....
The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Why come out here with all the B/S about "teaching for free. Not in it to make any money..." blah blah blah, circle jerk.... Nothing wrong with being paid for providing funding and teaching "proteges". But coming on here making claims like you aren't actively making money, doing it "for free" essentially lying about it, makes no sense man. You lie about this, what else are you lying about?
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit? I expect it would be over $250k invested (purchase and rehab). Note if it loses money, I will not expect the protégés to cover any losses. I do not expect much profit beyond the learning opportunity. I have also indicated that I could be willing to purchase a property that I typically would not based on my underwriting. This is because I could wait a long time to find something that meets my normal criteria and these protégés will go out on their own soon. This could also limit the profit. This truly is to teach them and maybe further my RE education.
I do not expect to make as much as I can make on that money elsewhere. This is due to 1) it being all of our first flip (inexperience at flipping) 2) it is a tough RE market. 3) me willing to purchase a flip that may not meet my typical underwriting criteria.
2 of the last 3 years we have given away more money than our earned income (our earned income is modest in part because we actively keep leverage high minimizing cash flow). We have enough money. I have every toy except a plane and I may buy that if I get my pilots license (which I have wanted to do for like 30 years but have not prioritized high enough to make it happen).
Keep trying if you desire but if I was actively trying to benefit from my BP posts I suspect I would have a users name that would not require people to try to determine who Dan H is IRL. Very few people would desire to put forth the effort.
Good luck
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit?
No. I think you should stop pretending that you aren't tho.You indicated I was benefitting financially from my posts on BP. The protégés did not come from BP, so totally unrelated to your hypothesis.
In addition, I do not view it as profiting on the flip effort because I expect to make less money than I would make on that money elsewhere. I am fine if we make virtually zero return. If we end up negative then I would not be thrilled, but I would consider it money toward my protégés’ education.
I do not need to make money from my BP posts. There are lots of opportunities to make money.
Best wishes
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes3mo
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
None of my protégés, past or present, met me via bigger pockets so there goes that argument. I do get occasionally requests to mentor people on bigger pockets but I have never accepted any of those people.Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
>If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that.
They would certainly have to put in some effort to reach out to me as I do not have my full name on BP. Not saying it would be that hard, but it is not as simple as looking up James wise.
There is a local RE agent that is fairly active on BP and we are connected on BP that sends me listings to our email and has met with one of my representatives who has not figured out the connection. It would not be hard for him to figure out, but he has not.
As for any potential future lending, I have thought about it for a few years but have not taken any further action. I likely would need a stronger relationship than virtually all BP relationships to get me started. The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Also I have 4 active protégés (a few more less committed) that I work with viritually 7 days a week. No charge. One is active at this moment leading her first tenant flip. She is not done with the tenant flip (day 10) due to placing new floors. She has already placed a qualified tenant at $4200/month (lease signed, the type of credit score that is low risk). She is taking over a larger rehab at 80% done (finishing is always challenging) because the current lead is going on a 1 month vacation and did not finish before his departure.
The only reason I need more money is as a score card. I am less inclined to use net worth as a score card because I am making decisions to benefit others over increasing our net worth yet our net worth continues to increase. Tough to use a score card that I am actively sabotaging.
You can keep proposing ways I could benefit from my posts but recognize the challenges of benefitting without using my full name on BP. I think virtually everyone that knows I am Dan H on BP figured it out in the reverse direction (more people knowing me from my RE market or wife’s accountability group then making the association to BP Dan H than have bothered to figure out who BP Dan H is IRL). I am not stating it is hard, I am saying few people exert the effort.
Best wishes
And there it is....
The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Why come out here with all the B/S about "teaching for free. Not in it to make any money..." blah blah blah, circle jerk.... Nothing wrong with being paid for providing funding and teaching "proteges". But coming on here making claims like you aren't actively making money, doing it "for free" essentially lying about it, makes no sense man. You lie about this, what else are you lying about?
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit? I expect it would be over $250k invested (purchase and rehab). Note if it loses money, I will not expect the protégés to cover any losses. I do not expect much profit beyond the learning opportunity. I have also indicated that I could be willing to purchase a property that I typically would not based on my underwriting. This is because I could wait a long time to find something that meets my normal criteria and these protégés will go out on their own soon. This could also limit the profit. This truly is to teach them and maybe further my RE education.
I do not expect to make as much as I can make on that money elsewhere. This is due to 1) it being all of our first flip (inexperience at flipping) 2) it is a tough RE market. 3) me willing to purchase a flip that may not meet my typical underwriting criteria.
2 of the last 3 years we have given away more money than our earned income (our earned income is modest in part because we actively keep leverage high minimizing cash flow). We have enough money. I have every toy except a plane and I may buy that if I get my pilots license (which I have wanted to do for like 30 years but have not prioritized high enough to make it happen).
Keep trying if you desire but if I was actively trying to benefit from my BP posts I suspect I would have a users name that would not require people to try to determine who Dan H is IRL. Very few people would desire to put forth the effort.
Good luck
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit?
No. I think you should stop pretending that you aren't tho.You indicated I was benefitting financially from my posts on BP. The protégés did not come from BP, so totally unrelated to your hypothesis.
In addition, I do not view it as profiting on the flip effort because I expect to make less money than I would make on that money elsewhere. I am fine if we make virtually zero return. If we end up negative then I would not be thrilled, but I would consider it money toward my protégés’ education.
I do not need to make money from my BP posts. There are lots of opportunities to make money.
Best wishes
So in a nutshell this is what's going on here.
You make 1,000's of posts that encourage other people to invest money in your general geographic location, while claiming that you have no financial interests that benefit from that. When in fact you do. You have these coaching students / JV partners / Proteges whom you make money working on deals with.
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
None of my protégés, past or present, met me via bigger pockets so there goes that argument. I do get occasionally requests to mentor people on bigger pockets but I have never accepted any of those people.Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
Quote from @James Wise:
Quote from @Dan H.:
The historical data is there and it is no t even close. The returns of Los Angeles have historically crushed Cleveland. Case Shiller use to publish the top large city residential return for this century. Los Angeles was number 2 in the country.
In addiition, equating rent to purchase ratio as having a strong correlation to cash flow on a hold is a folly that is shown in the data. Los Angeles historically whooped Cleveland in cash flow on a long hold. This is because the item that has the strongest correlation with cash flow (assuming no extraction of value) is rent growth and rent growth has a strong correlation to appreciation.
I am all about total return and do not give a $hit about initial cash flow.
The reality is cash flow cannot match the return from leveraged appreciation. My lowest appreciating property has appreciated $2.6k/month (on a total purchase price of $167k with no closing costs that I purchased leveraged). I have multiple that have appreciated over $10k/month one of which was purchased at $640k at 80% LTV (so $128k invested plus closing costs). Cash flow simply cannot match the return from a high appreciation property.
I do not need the cash flow. If you require the cash flow to live and hold the properties, then cash flow has to be a priority. If you are fortunate enough to be able to handle negative cash flow, you can concentrate on total returns. If you concentrate on total returns, the best total returns happen with high appreciation.
Now to show that my actions match my post…
One of my more recent purchases was the most negative cash flow non-commercial property I have heard of. $2.35m with fully occupied rent of $6k. My initial plan was to brrrr, but when rates rose I decided that I would do the value add without the refi. This removed some of the urgency and I had another large rehab going at the same time. So it took us 3 years to stabilize. Outcome: property is worth over $1m more than purchase and rehab costs and I expect rents to average over $20k/month this year (PITI is just under $9.5k). I purchased leveraged. My return to date far exceeds my total investment and it now has modest cash flow (modest for its equity (my underwriting shows $1230/month cash flow). Principle paydown is currently $2675. Current value exceeds $3.5m. My return so far has exceeded 50%/year.
Good luck
What are you selling Dan? Nobody's spending as much time pumping up the Cali real estate market as you if they aren't here selling something. You taking on private money J/V's? Spill it dawg.Selling nothing but education. I am on these forums to teach. I spend much of my day doing free mentoring. I am looking for a beginner house flip in San Diego to let my protégés loose on.
Pure RE investor that has made a lot of money on RE and started working RE at a young age (depending on definition of start, as early as my early teens).
not an agent, lender (yet, may in the future but I would rather spend my time mentoring), PM for properties that I do not have an ownership interest (I do not have a RE license). Nothing to gain by anyone buying in my San Diego market.
note Los Angeles is not my market. I own no RE there. Also I am not really intending to single out Los Angeles (or Cleveland). Virtually every high appreciation market (such as Los Angeles) has historically achieved better cash flow over a long hold than low appreciation markets (Cleveland’s recent appreciation is not bad but longer term it has been bad). This can easily be realized looking at the rent growth.Here are median apartment rents for my San Diego market. Note SFR units have higher rents (and more average BR) with higher increases.
- 2025: $2995/month. 2 Beds $3,095, 3 Beds $4200. Over $650 increase in 5 years (since 2020)
- 2020: $2344/month, over $1k increase since 2010
- 2010: $1323/month, nearly $600/month increase since 2000
- 2000: $747/month
until 2022, I found it fairly easy to purchase cash flow positive properties in San Diego. They did not have initial cash flow like many of the cheaper markets. My unit rents have averaged over $100/month increase YOY. The mortgage is flat assuming fixed rate loan. Property tax in California is near flat. A very significant amount of that rent increase is realized cash flow (my guess is near 80%)But let’s look at average appreciation instead (includes condos and townhomes, average SF house is currently over $1m)
- mar 2026: $950k
- 2020: $676k
- 2010: $277k
- 2000: $220kIn 5 years (63 months) since 2000, the average appreciation is $4.35k/month (try getting $4.35/month cash flow from a non commercial property, recognize this is an average and the average property does not have a value add). Use any of these time spans you want and you will see a killer return from appreciation if purchased leveraged (appreciation reflected is just under 6%/year since 2000 so leverage is required to whoop sp500).
I used San Diego because I have the numbers. I suspect similar results from phoenix, Boston, Seattle, Los Angeles, nyc, Honolulu, etc. these markets have appreciation rates near double the long term appreciation rate. There are cheap markets where the long term appreciation rate has not kept up with the long term inflation rate (implying they are declining in value in inflation adjusted value).
I encourage new RE investors start where they can easily drive round trip in a day. I believe virtually all new RE investors have a viable market within driving range. I consider OOS investing more risk than local investing. Note I consider appreciation to be more of a wealth creator than cash flow, but increased risk can lead to wealth decline. If you live in Cleveland, I recommend embracing the cash flow opportunities but be cognizant of the appreciation outlook in Cleveland submarkets.
Knowledge is power. There is a lot of data out there. I encourage anyone to verify everything in this post.
Best wishes
Not buying it bro. Everyone on BP has an agenda. Nobody puts out as much content as you have for no other reason than to "help people."
If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that. But this whole line of B/S about spending all day being a "free mentor, na bro. Not buying it.
>If you woulda said you're building up your brand for your future lending business or hoping that people who view you as a local expert reach out to you when they want to sell a property in you're town, I'd respect that.
They would certainly have to put in some effort to reach out to me as I do not have my full name on BP. Not saying it would be that hard, but it is not as simple as looking up James wise.
There is a local RE agent that is fairly active on BP and we are connected on BP that sends me listings to our email and has met with one of my representatives who has not figured out the connection. It would not be hard for him to figure out, but he has not.
As for any potential future lending, I have thought about it for a few years but have not taken any further action. I likely would need a stronger relationship than virtually all BP relationships to get me started. The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Also I have 4 active protégés (a few more less committed) that I work with viritually 7 days a week. No charge. One is active at this moment leading her first tenant flip. She is not done with the tenant flip (day 10) due to placing new floors. She has already placed a qualified tenant at $4200/month (lease signed, the type of credit score that is low risk). She is taking over a larger rehab at 80% done (finishing is always challenging) because the current lead is going on a 1 month vacation and did not finish before his departure.
The only reason I need more money is as a score card. I am less inclined to use net worth as a score card because I am making decisions to benefit others over increasing our net worth yet our net worth continues to increase. Tough to use a score card that I am actively sabotaging.
You can keep proposing ways I could benefit from my posts but recognize the challenges of benefitting without using my full name on BP. I think virtually everyone that knows I am Dan H on BP figured it out in the reverse direction (more people knowing me from my RE market or wife’s accountability group then making the association to BP Dan H than have bothered to figure out who BP Dan H is IRL). I am not stating it is hard, I am saying few people exert the effort.
Best wishes
And there it is....
The most likely scenario Is to fund one my past protégés. I am currently looking to purchase a local beginner flip to let the current protégés loose on and see how they do. I do not do flips, this would be mostly for the teaching value. Any profit would be bonus and of course shared with the protégés.
Why come out here with all the B/S about "teaching for free. Not in it to make any money..." blah blah blah, circle jerk.... Nothing wrong with being paid for providing funding and teaching "proteges". But coming on here making claims like you aren't actively making money, doing it "for free" essentially lying about it, makes no sense man. You lie about this, what else are you lying about?
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit? I expect it would be over $250k invested (purchase and rehab). Note if it loses money, I will not expect the protégés to cover any losses. I do not expect much profit beyond the learning opportunity. I have also indicated that I could be willing to purchase a property that I typically would not based on my underwriting. This is because I could wait a long time to find something that meets my normal criteria and these protégés will go out on their own soon. This could also limit the profit. This truly is to teach them and maybe further my RE education.
I do not expect to make as much as I can make on that money elsewhere. This is due to 1) it being all of our first flip (inexperience at flipping) 2) it is a tough RE market. 3) me willing to purchase a flip that may not meet my typical underwriting criteria.
2 of the last 3 years we have given away more money than our earned income (our earned income is modest in part because we actively keep leverage high minimizing cash flow). We have enough money. I have every toy except a plane and I may buy that if I get my pilots license (which I have wanted to do for like 30 years but have not prioritized high enough to make it happen).
Keep trying if you desire but if I was actively trying to benefit from my BP posts I suspect I would have a users name that would not require people to try to determine who Dan H is IRL. Very few people would desire to put forth the effort.
Good luck
I am not sure what you think but do you think I should put up capital to purchase a beginner flip and fund the flip without sharing in the profit?
No. I think you should stop pretending that you aren't tho.You indicated I was benefitting financially from my posts on BP. The protégés did not come from BP, so totally unrelated to your hypothesis.
In addition, I do not view it as profiting on the flip effort because I expect to make less money than I would make on that money elsewhere. I am fine if we make virtually zero return. If we end up negative then I would not be thrilled, but I would consider it money toward my protégés’ education.
I do not need to make money from my BP posts. There are lots of opportunities to make money.
Best wishes
So in a nutshell this is what's going on here.
You make 1,000's of posts that encourage other people to invest money in your general geographic location, while claiming that you have no financial interests that benefit from that. When in fact you do. You have these coaching students / JV partners / Proteges whom you make money working on deals with.
let’s say you are correct that I make money off my protégés (that I do not) that I do not charge to mentor and have yet to do a deal with, seeing none of these protégés were sourced via BP (ever) I question how you think my BP posts is playing a role in anything related to the protégés.
I would say nice try, but that is not even a close to plausible thinking.
By the way I use my market as an example because I know the numbers of my market, not because I believe it is unique (I think it has been very good, but not unique). I suspect similar long term high appreciation markets will have similar rent growth and great cash flow over a long hold.
What you state is not logical for these reasons.
1) no protege has ever been sourced from BP. Any theory about my BP posts being related to any profit made from the protégés totally breaks down here.2) I do not use my full name on BP. I do not make it easy to figure out who I am IRL. It takes a bit of effort. If my goal was to benefit financially from the BP posts, I would think it is easier to provide a full name (such as James wise) that can easily tie to other social media etc. not a username that would take effort to tie to me IRL and more effort to associate with my oddest social media presence.
3) the flip that I am hoping to purchase to let them loose on would be my first such purchase for the protégés and they are not JV/partners as they will have zero ownership. I will share any profit with the protégés as encouragement. I will eat any losses. I do not expect a substantial profit as it will be all our first flip and it is a difficult RE environment.
4)) I do not need more money. The time I spend with the protégés cannot compensate me for my time (compared to my other options of earning money) with any potential profit I could be making from other financial sources (i retired from a w2 early that was paying a significant salary and I make a lot of money on my various investments).by the way this is my last response on how/if I financially benefit from my BP.
- 3moJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
I'm good with both. I have 18 SFR in decent appreciating neighborhoods in the Dallas area. The cash flow is only around $300-$400/month at first which barely breaks you even when you add in things breaking and an occasional vacancy. But in 3-5 years, market rent comes up to help give you better cash flow. I've also got 21 SFR out of state in a cheap area in Arkansas which has great cash flow, but terrible appreciation. lol. I like the cash flow, but I have higher turnovers and more things breaking down with my Arkansas properties. I'm good with being about 50/50 with being in a good appreciating area and also in an area with great cash flow. In 20 years, I'll probably be happier with the ones in a good appreciating area.
- 3moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
I would recommend Cleveland to anyone who wants to build real cash flow now and worry about appreciation later.
Kerlous Tadres | Reafco Real Estate542 Reviews - Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes3mo
Hi all,
This is Swanny. I did it a little unconventionally and bought 10 condos here in San Diego in 2011-2012 for an average of about $140,000 with 20-25% down ones one. They of course doubled and ultimately tripled or quadrupled in value now. That would have been I've a 15 yr period of course.
What I did was when they more than doubled in value I did 1031 exchanges on most of those condos for apartment complexes in primarily Lake County Ohio, Painesville, Mentor, and one outlier in Akron. Plus bought a few more with my family and friends.
Then in 2021 I refinanced all those apartment complexes on those Freddie 10 yr fixed 3 yrs interest only loans at crazy low interest rates and took back tons of cash tax free!!
I was a teacher and at that time was able to retire at 50 yrs old. Now I just manage the heck out of my Property Managers out there. Of course I do that from San Diego.At the moment we have a 57 unit for sale at 7559 Mentor Ave. in Mentor that we purchased for 2 million in 2019. The whisper price is at 5.9 million right now. Time to cash my friends and family out of that one. The NOI for t-12 is at about $430,000 and the cap rate out there in Mentor, Ohio is at about 7.25. We all only invested $850,000 total and there is still a 3 yr $1,395,000 Freddie Loan left on the property. When we first purchased in 2019 the NOI was at about $130,000.00. Still a lot of meat on the bone for a buyer too!! Another $200-$300 easy in rent bumps for the area!!
Just noticed that Ohio is the number 1 ranked State for business too in America!!
Most people told me that it was not good to invest where I invested back in 2014-2015 when I was doing those 1031 exchanges. Not a sexy high growth area.
It sure has been sexy for me and my family and friends that I took along for the ride. That 57 unit in mentor gets about 5% distributions for us each quarter on that $850,000 total investment for 14 of us that invested back in 2019. All family and friends have received 100% in distributions and counting. Just wait until we sell!!
I would love to share the particulars regarding that 57 unit we are selling right now. Call to offers will be at the end of the month.
Feel free to pick my brain on how I became financially free and how you can too!!
Swanny (Michael Swan)
OG BP Podcast 238 Guest
- 3moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesGreat question and welcome! For me, cash flow comes first because it gives me options. If a property pays for itself from day one, I can usually hold through market ups and downs and let appreciation happen over time instead of depending on it. That doesn't mean I ignore appreciation though. I like markets where the fundamentals point to steady population and job growth because that supports both rent growth and long-term value. That's actually why I ended up investing in Columbus after moving from Portland in 2020. It still has neighborhoods where you can buy in the $120K-$180K range and find properties with solid rent-to-price ratios, while also benefiting from major employers and continued growth. I've found that combination of cash flow today and appreciation potential tomorrow makes it easier to stay invested for the long haul. Happy to connect and answer any questions you have!
Quote from @Gabriel Cespedes:
Many investors focus on appreciation, while others prioritize consistent monthly cash flow.
Markets with lower purchase prices often provide stronger rent-to-price ratios, while higher-cost markets may offer stronger appreciation over time.
When comparing different markets, I usually look at:
• Monthly cash flow
• Vacancy
• Operating expenses
• Financing
• Long-term appreciation
For investors who own rental properties:
How do you balance cash flow versus appreciation when choosing where to invest?
Jimmy Lieu, Red 1 Realty4.9122 Reviews - 3moMatthew Irish-JonesBusiness MemberReal Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
Quote from @Gabriel Cespedes:
Many investors focus on appreciation, while others prioritize consistent monthly cash flow.
Markets with lower purchase prices often provide stronger rent-to-price ratios, while higher-cost markets may offer stronger appreciation over time.
When comparing different markets, I usually look at:
• Monthly cash flow
• Vacancy
• Operating expenses
• Financing
• Long-term appreciation
For investors who own rental properties:
How do you balance cash flow versus appreciation when choosing where to invest?
Investors chasing appreciation are wrong. Investors chasing cash flow are wrong. Investors should chase people. There are teams out there that are elite at getting investors returns. Some are great agents with subs set up, some are vertically integrated companies, some are local development companies, some are tiny little LLC's that get LP's crazy returns.
Since this site is about passive investment and using teams of agents, GC's and property managers to get passive returns, your market can be irrelevant. I would take an elite team in a bad market over a crappy squad in a great market. An agent that over projects numbers, an incompetent property management team, and being last in line for anyone to care about your investment is going to equate to losing money in any market.
Irish Jones Realty4.948 Reviews - 3moMarc RiceBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @Gabriel Cespedes:
Many investors focus on appreciation, while others prioritize consistent monthly cash flow.
Markets with lower purchase prices often provide stronger rent-to-price ratios, while higher-cost markets may offer stronger appreciation over time.
When comparing different markets, I usually look at:
• Monthly cash flow
• Vacancy
• Operating expenses
• Financing
• Long-term appreciation
For investors who own rental properties:
How do you balance cash flow versus appreciation when choosing where to invest?
Cleveland for me!
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews - 3moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Gabriel Cespedes:
Many investors focus on appreciation, while others prioritize consistent monthly cash flow.
Markets with lower purchase prices often provide stronger rent-to-price ratios, while higher-cost markets may offer stronger appreciation over time.
When comparing different markets, I usually look at:
• Monthly cash flow
• Vacancy
• Operating expenses
• Financing
• Long-term appreciation
For investors who own rental properties:
How do you balance cash flow versus appreciation when choosing where to invest?
I buy in dayton for cashflow and columbus for appreciation. Own 30+ rental units doing that.
ReafCo | Ahmed Group 533 Reviews - 3moPatrick O'SullivanBusiness MemberProperty Manager · Phoenix, AZ · Member since 2024 · 551 posts · 210 votes
I think the answer depends a lot on an investor's goals and timeline. If you're relying on the income today, cash flow has to be part of the equation because it gives you staying power when unexpected expenses or vacancies come up. On the other hand, appreciation, rent growth, and principal paydown are where a lot of long-term wealth is created.
Rather than treating it as Cleveland vs. Los Angeles, I'd focus on whether the specific deal works in the market you're investing in. Every market has strong and weak submarkets, and every property has its own risk profile. I'd rather own a well-underwritten property in a market I understand than chase a headline metric.
For me, having managed rentals, I've found that buying in solid neighborhoods with durable tenant demand often produces the best long-term results because it tends to support both stable operations and steady value growth over time.
get MULTIfamily Property Management4.7214 Reviews - 3moMike PaolucciBusiness MemberRealtor · Columbus Cleveland Dayton, OH · Member since 2022 · 504 posts · 556 votes
Quote from @Gabriel Cespedes:
Many investors focus on appreciation, while others prioritize consistent monthly cash flow.
Markets with lower purchase prices often provide stronger rent-to-price ratios, while higher-cost markets may offer stronger appreciation over time.
When comparing different markets, I usually look at:
• Monthly cash flow
• Vacancy
• Operating expenses
• Financing
• Long-term appreciation
For investors who own rental properties:
How do you balance cash flow versus appreciation when choosing where to invest?
Boils down to personal preference / diversifying your portfolio. I've got a mixture of cashflow and appreciation properties and will likely be continuing to scale in that same fasion with the goal to 1031 into better properties over time.
Reafco - Mike Paolucci 512 Reviews - 3moEric FernwoodBusiness MemberRealtor · Las Vegas, NV · Member since 2014 · 1k+ posts · 1k+ votes
Hello @Gabriel Cespedes,
I don't think the real question is Cleveland versus Los Angeles. The question is: Which city has consistently produced rent growth and appreciation that outpace inflation?
Rent growth and appreciation are not property features. They are city features.
Think of a city as a harbor and rents and home prices as boats floating in it. Population growth is the tide. As more people move into a city, housing demand increases. When buyers and renters outnumber available homes, both rents and prices rise. When population growth slows or reverses, demand weakens and rent growth often stalls. Even an excellent property can only perform as well as the city where it is located.
That is why I view low-priced properties as a warning sign rather than an advantage. Low prices are often the result of years of weak demand. The same conditions that suppress home prices usually suppress rent growth.
When home prices are high, fewer people can afford to buy, so more people rent. The increased rental demand pushes rents higher. When home prices are low, more people can afford to purchase, reducing rental demand and causing rents to fall, stagnate, or grow slowly.
My goal is not to own the greatest number of properties. My goal is to build a monthly paycheck that lasts 20 to 40 years and grows faster than inflation. That requires rents to grow faster than inflation.
To illustrate the difference, consider two properties with identical starting rents but located in cities with different long-term rent growth rates.
Property A Property B Purchase Price $400,000 $200,000 Initial Rent $2,000/mo $2,000/mo Annual Rent Growth Rate 6% 2% Inflation Rate 4% 4% Based on purchase price and initial cash flow, Property B appears to be the better investment. But if your goal is a retirement paycheck that maintains its purchasing power, which property performs better over time?
Property A (6% rent growth, 4% inflation)
- After 10 years: ≈ $2,420/month (inflation-adjusted)
- After 20 years: ≈ $2,927/month
- After 30 years: ≈ $3,542/month
Property B (2% rent growth, 4% inflation)
- After 10 years: ≈ $1,647/month (inflation-adjusted)
- After 20 years: ≈ $1,356/month
- After 30 years: ≈ $1,117/month
Although Property B produced a stronger initial cash flow, its rent growth does not keep pace with inflation. As a result, its purchasing power declines year after year.
Property A may produce lower—or even negative—cash flow initially, but because rents grow faster than inflation, its purchasing power increases over time. Eventually, it provides a much larger real monthly income.
That is the dilemma with low-priced properties. They are usually inexpensive for a reason. The same market conditions that keep prices low often keep rent growth low as well.
Start with your long-term goal, then work backward. If your objective is a monthly paycheck that will support you for decades, the most important decision is not the property—it is the city.
FERNWOOD Team, KW VIP Realty520 Reviews
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