Where can I buy a good midterm rental for $250K?

Question

I have decided it's time to expand my portfolio. I currently have two local long-term rentals and one midterm rental that is remote. This week I should be closing on a HELOC. I want to use that money for some properties that cash flow. However, the properties need to be around $250K. I thought for cash flow I would look at doing midterm rentals. I've done well with this on a condo in the Edgewater neighborhood of Chicago for the last four years. After doing some research, I came to the conclusion that my best area of focus would be the southside flats in Pittsburgh. Alternative options were going to be Cleveland, Detroit, or possibly Kansas City. I'd love to get some input from people who have had experiences doing MTRs in any of these areas, but specifically, the southside flats in Pittsburgh. Also, how you personally search for properties. I've been just looking on Zillow, but now I am debating foreclosures, REOs and off market opportunities. I'm hoping to buy one property every year, with the plan that the cash flow from all of my properties will help to allow me to replenish my HELOC and buy another propertry the following year.

Jeremy England · Answer

I dont know what makes a good mid term prospect. I currently have a brand new 3/2 under construction. 1200 sf in Pensacola 2 miles from palafox place (the central hub of pensacola).

Listed for 269000. I am considering keeping it but first strategy is selling.

Gregory Acs · Answer

It sounds like you've put a lot of thought into your expansion strategy. Since you're using a HELOC, I'd make sure each property not only cash flows on its own, but also generates enough to comfortably cover the HELOC payment while still leaving room for vacancies, maintenance, and reserves. Markets and rental strategies can change, but a deal that's conservative on the financing side is usually much easier to hold long term.

I'd also compare your financing options before making an offer. Depending on the property and your long-term goals, there may be a structure that preserves more flexibility as you continue to grow. If you'd like to run through different financing scenarios or compare how they affect your cash flow, I'd be happy to help.

Michael K Gallagher · Answer

pittsburg is a solid market as is likely most of the midwest. Going after forclosures and REO's can be fine but they generally add time and complexity. there are deals on market right now, potentially even furnished and ready to go you could tap into, just gotta make the offer.

Alfath Ahmed · Answer

Cleveland will be your best bet. It has the one of the highest CoC returns in the State/Nation. The fact that it is landlord friendly, affordable, and the city is able to keep up with growing rents and maintain demand is impressive.

I have a core-4 team that works in Cleveland and cold-calls to find off-market deals. Let me know if you need any connection. Happy to refer others.

Marc Rice · Answer

Cleveland and Dayton could work for you

Jennie Berger · Answer

@Justin Miller I’ve owned a 3 bed / 2 bath MTR in Knoxville since 2022 and it’s been a strong market for me. One thing I like about Knoxville is that the MTR demand isn’t dependent on tourism or seasonality.

I bought mine in late 2022 for $240K. Prices have definitely moved since then, but there are still areas where you can find properties around the $250K mark that could make sense as MTRs.

Out of curiosity, if you’re already invested in another market, what’s pushing you toward Pittsburgh (and other areas) instead of adding another property in a market you already know well?

-Jennie Berger

Property People

Jamie Dietz · Answer

The South Side Flats is an interesting choice for a remote mid-term rental (MTR) investment. You can definitely find properties under $250,000, but I would strongly recommend visiting the neighborhood if you're not already familiar with it.

Over the years, the South Side has gone through significant cycles of growth and decline. While it remains one of Pittsburgh's most walkable neighborhoods with excellent access to Downtown, parts of the neighborhood are currently facing challenges with crime, commercial vacancies, and residents relocating to more desirable areas.

In my opinion, these issues are most noticeable in the western portion of the neighborhood. The eastern end closer to South Side Works and the riverfront has generally held up better and continues to attract more investment and redevelopment.

If you're investing remotely, I'd be cautious. Buying the right block is critical in the South Side Flats, as values, tenant quality, and overall appeal can vary dramatically within just a few streets.

Justin Miller · Answer

@Evan Hopple i'm still a little iffy on Cleveland. the area you speak in has some hit or miss neighborhoods on the outskirts and not many for sale within. I have a friend who just bought it into an Airbnb out there but I don't think he's seen recent changes in law. But if the numbers work, I'm interested.

Where can I buy a good midterm rental for $250K?

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