Out of state market search

Orange County, California
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Out of state market search

Oswaldo Zamora
Member since 2025 · 15 posts · 20 votes

Good evening BP Community!

I’m thrilled to share that I’ve been able to save up some investment capital and am now actively searching for the right market to dive into!

Currently based in California, I’m on the hunt for a market that hits the sweet spot: meets the 1% rule, generates solid cash flow, and builds long-term equity. I know it’s a tall order—but I’m optimistic and eager to learn from this amazing community.

If you’ve got insights, recommendations, or experiences to share, I’d truly appreciate your guidance. Let’s connect and build wealth together!

8Reply
72 views

Most Popular Reply

Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
1y

@Oswaldo Zamora

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Why is Property Class so important for investors to understand and apply in their investing strategies?

Because the Property Class dictates the Class of the tenant pool that the property will attract.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

We use the following to rank Property Classes, in order of importance:

  • Property Tenant Pool: closely linked to location, but not always.
  • Property Location: closely linked to tenant pool, but not always.
  • Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

Key metrics for each Property Class:

Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.

Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

FICO Score

Pct of Population

Default Probability

800 or more

13.00%

1.00%

750-799

27.00%

1.00%

700-749

18.00%

4.40%

650-699

15.00%

8.90%

600-649

12.00%

15.80%

550-599

8.00%

22.50%

500-549

5.00%

28.40%

Less than 499

2.00%

41.00%

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.

We can also share numerous examples of properties & portfolios we’ve assisted investors with!

DM us if you’d like to discuss this logical approach in greater detail!
[email protected]248-209-6824
Logical Property Management4.9469 Reviews
WebsiteView Page
6Reply
See this reply in the discussion

38 Replies

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  • Jared Smith
    Real Estate Agent · Lakeland, TN · Member since 2015 · 214 posts · 105 votes
    1y

    @Oswaldo Zamora, I truly hope you are able to find a home/market that meets your criteria here in 2025 but my feeling is that it is going to be very challenging, even for seasoned investors. With that being said, you will be able to find some 1% paper deals in various markets, but I would be very careful with those, especially if the price is under $150k. In my personal experience in median markets in the Midwest, where housing prices tend to be lower than most markets, the sub-markets that have these deals available come with increased risk, especially for an out of state, first time and/or first time investor. 

    1Reply
    • Oswaldo Zamora
      OP
      Member since 2025 · 15 posts · 20 votes
      1y

      @Jared Smith  thanks for communicating this to me. It honestly means a lot to know the BP community is stronger than the multiple FB Groups I joined that drove me nowhere. 

      0Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    Have you looked into Ohio markets such as Columbus or Cleveland? A lot of investors based in markets like California and New York are choosing to purchase their investments OOS in the Midwest because of the affordability and numbers making more sense.

    Prices in Columbus are still low enough to find 1% rule deals and there's a ton of appreciation happening in this market as well. I actually moved from Florida to Columbus for the real estate. I saw how fast the city was growing and decided to make the jump.

    [email protected]614-662-1652
    Reafco - Samuel Diouf528 Reviews
    WebsiteView Page
    1Reply
    • Oswaldo Zamora
      OP
      Member since 2025 · 15 posts · 20 votes
      1y

      @Samuel Diouf I had not looked into this market, until today. If you don't mind me asking how long ago did you start your investment journey there? 

      0Reply
  • Mackaylee BeachPro Member
    Real Estate Agent · Kansas City, MO · Member since 2020 · 1k+ posts · 494 votes
    1y

    Kansas City is experiencing rapid growth and offers a wealth of employment and investment opportunities. I would be delighted to connect with you to discuss your financial goals and potentially link you with the perfect investment property that aligns with your aspirations.

    [email protected]
    2Reply
  • Jeremy MelloulPro Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 84 posts · 83 votes
    1y

    I'd look into Boom City, aka Columbus, OH. This city def meets your criteria

    380-222-6485
    0Reply
    • Oswaldo Zamora
      OP
      Member since 2025 · 15 posts · 20 votes
      1y

      @Jeremy Melloul  Columbus keeps coming up on my feed, I recently started looking into this market and would love to network to see if this is truly the right market 

      1Reply
  • Aristotle Kumpis
    Specialist · Long Beach, CA · Member since 2011 · 888 posts · 401 votes
    1y

    For long term growth, you need to consider where the jobs are growing and going. The 1% rule means nothing without solid jobs and a good local economy. Sure, you can buy cheap houses that have a 1% rent to value ratio in places where there is not much growth. But then again, you do make your money in appreciation. Not in cash flow.

    0Reply
    • Oswaldo Zamora
      OP
      Member since 2025 · 15 posts · 20 votes
      1y

      @Aristotle Kumpis thanks, I appreciate your view on this matter. I agree with you, but finding this "right" market almost seems impossible. I would love a place where the properties appreciate and create generational wealth

      0Reply
  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
    1y
    Quote from @Oswaldo Zamora:

    Good evening BP Community!

    I’m thrilled to share that I’ve been able to save up some investment capital and am now actively searching for the right market to dive into!

    Currently based in California, I’m on the hunt for a market that hits the sweet spot: meets the 1% rule, generates solid cash flow, and builds long-term equity. I know it’s a tall order—but I’m optimistic and eager to learn from this amazing community.

    If you’ve got insights, recommendations, or experiences to share, I’d truly appreciate your guidance. Let’s connect and build wealth together!


     I recommend investing close to where you live if possible, if this doesn't fit AT ALL, then I would then recommend looking to see if you have family living in markets that meet this. Cash flow, you are going to want to be in the midwest probably. As said by others, Columbus is a good market. My market is a little more south, Greater Cincinnati. Things look good here too! Lower purchase price and good cash flow. If you want to talk more, have any questions, etc.. , shoot me a message!

    [email protected]859-443-4952
    Sam McCormack Realtor
    View Page
    0Reply
    • Oswaldo Zamora
      OP
      Member since 2025 · 15 posts · 20 votes
      1y

      @Sam McCormack I remember Cincinnati being a hot market a while back. I have not dived into this area in a long period, but it seems like Ohio is still the place with growth 

      0Reply
    • Sam McCormackBusiness Member
      Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 834 votes
      1y
      Quote from @Oswaldo Zamora:

      @Sam McCormack I remember Cincinnati being a hot market a while back. I have not dived into this area in a long period, but it seems like Ohio is still the place with growth 


       I would like to say it is great, if you do it right. Shoot me a message if you want to learn more

      [email protected]859-443-4952
      Sam McCormack Realtor
      View Page
      0Reply
  • Melissa JusticeBusiness Member
    Rental Property Investor · Phoenix, AZ · Member since 2024 · 519 posts · 1k+ votes
    1y

    @Oswaldo Zamora,

    That's awesome and congrats on getting to this point!

    Since you're based in California (where the 1% rule is tough to find), I'd highly recommend looking into turnkey rental markets in the Midwest and Southeast. These regions tend to offer much lower price points, better cash flow, and landlord-friendly legislation, making them great options for out-of-state investors looking to hit that 1% rule while building equity long term.

    Markets like Cleveland, Memphis, and certain parts of Alabama and Florida consistently deliver strong ROI and have solid property management infrastructure to support remote investors.

    It’s a great way to start seeing returns from day one without having to be hands-on. Happy to share more details if you’d like to compare markets or connect with others already investing this way!

    Best of luck,

    Melissa

    [email protected]313-221-8718
    0Reply
    • Oswaldo Zamora
      OP
      Member since 2025 · 15 posts · 20 votes
      1y

      @Melissa Justice I appreciate your response. I do believe that the south east is a great place to invest. I currently have a multifamily in Eastern North Carolina, but finding deals in that area are really hard. I have not dived into the Midwest yet, definitely open to it and see if there are good deals out there as I try to grow my portfolio 

      1Reply
    • Melissa JusticeBusiness Member
      Rental Property Investor · Phoenix, AZ · Member since 2024 · 519 posts · 1k+ votes
      1y
      Quote from @Oswaldo Zamora:

      @Melissa Justice I appreciate your response. I do believe that the south east is a great place to invest. I currently have a multifamily in Eastern North Carolina, but finding deals in that area are really hard. I have not dived into the Midwest yet, definitely open to it and see if there are good deals out there as I try to grow my portfolio 


       Absolutely! Feel free to DM me and we can discuss more :-)

      [email protected]313-221-8718
      0Reply
    • Melissa JusticeBusiness Member
      Rental Property Investor · Phoenix, AZ · Member since 2024 · 519 posts · 1k+ votes
      1y
      Quote from @Oswaldo Zamora:

      @Melissa Justice I appreciate your response. I do believe that the south east is a great place to invest. I currently have a multifamily in Eastern North Carolina, but finding deals in that area are really hard. I have not dived into the Midwest yet, definitely open to it and see if there are good deals out there as I try to grow my portfolio 

      [email protected]313-221-8718
      0Reply
  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    1y

    Congrats on getting to the starting line! If you're chasing the 1% rule with long-term equity, I'd look into parts of Texas, the Midwest, and select submarkets in Florida. These areas still have properties that cash flow, landlord-friendly laws, and strong population or job growth trends. Just be sure to underwrite conservatively. Rents are stabilizing in many places, and maintenance costs can eat into returns fast.

    [email protected]614-490-1163
    Kerlous Tadres | Reafco Real Estate542 Reviews
    WebsiteView Page
    0Reply
  • Ezekiel Trevino
    Realtor · McAllen, TX · Member since 2025 · 141 posts · 58 votes
    1y

    Texas

    0Reply
  • Oswaldo Zamora
    OP
    Member since 2025 · 15 posts · 20 votes
    1y

    @Jimmy Lieu would love to hear more from you, feel that you have provided some important data which I was not aware of. 

    0Reply
  • Seth McGatheyBusiness Member
    Real Estate Agent · Milwaukee WI · Member since 2024 · 321 posts · 255 votes
    1y

    The market is important, but also consider where you can build the team you want/need. Even the best market with a bad team could make a good deal go bad. 1% rule is a challenge but not impossible in my market (Milwaukee). So it is one to consider. I successfully found a duplex last year for $300,000 and I am making $500 cashflow after everything. Appreciation in Milwaukee is not astounding but it is consistent. 
    If you want help looking into Milwaukee further, reach out and I would be happy to help you out. 
    Good luck on your search! 

    [email protected]708-297-0996
    Seth McGathey - Shorewest Realtor4.914 Reviews
    WebsiteView Page
    0Reply
  • Na Na
    Member since 2025 · 1 post · 0 votes
    1y

    What is the 1% rule?

    0Reply
    • Spencer SturgillPro Member
      Investor · Madison, WI · Member since 2024 · 20 posts · 5 votes
      1y

      The 1% rule is a rule of thumb that if the monthly rent for a property is at least 1% of the purchase price, is is generally a good deal, barring any other negative factors, such as the one listed above like declining job rates or a dying city. 

      For example, if you find a property listed for $150,000, and in doing your financial due diligence you find you can rent it for $1,500 a month, there's a good chance it may be a good deal.

      0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    1y

    @Oswaldo Zamora

    Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

    Why is Property Class so important for investors to understand and apply in their investing strategies?

    Because the Property Class dictates the Class of the tenant pool that the property will attract.

    The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

    Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

    If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

    Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

    So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

    We use the following to rank Property Classes, in order of importance:

    • Property Tenant Pool: closely linked to location, but not always.
    • Property Location: closely linked to tenant pool, but not always.
    • Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

    Key metrics for each Property Class:

    Class A Properties:
    Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
    Tenant Default: 0-5% probability of eviction or early lease termination.
    Section 8: Class A rents are too high and won’t be approved.
    Vacancies: 5-10%, depending on market conditions.
    Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

    Class B Properties:
    Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
    Tenant Default    : 5-10% probability of eviction or early lease termination.
    Vacancies    : 10-15%, depending on market conditions.
    Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
    Section 8: Class B rents are usually too high for the Section 8 program.

    Class C Properties:
    Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
    Tenant Default: 10-20% probability of eviction or early lease termination.
    Section 8: Class C rents usually meet program requirements, proper screening still recommended.
    Vacancies: 10-20%, depending on market conditions and tenant screening.
    Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

    Class D Properties:
    Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
    Tenant Default: 20-30% probability of eviction or early lease termination.

    Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
    Vacancies: 20%+, depending on market conditions and tenant screening.
    Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

    Where did we get our FICO credit score information from?

    Check out this chart:

    FICO Score

    Pct of Population

    Default Probability

    800 or more

    13.00%

    1.00%

    750-799

    27.00%

    1.00%

    700-749

    18.00%

    4.40%

    650-699

    15.00%

    8.90%

    600-649

    12.00%

    15.80%

    550-599

    8.00%

    22.50%

    500-549

    5.00%

    28.40%

    Less than 499

    2.00%

    41.00%

    Source: Fair Isaac Company

    Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

    Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.

    We can also share numerous examples of properties & portfolios we’ve assisted investors with!

    DM us if you’d like to discuss this logical approach in greater detail!
    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
    WebsiteView Page
    6Reply
  • AJ WongBusiness Member
    Real Estate Broker · Oregon & California Coast · Member since 2022 · 834 posts · 696 votes
    1y

    Oregon 🎯

    541-800-0455
    Sesemi | STR Brokers powered by Fathom Realty 518 Reviews
    WebsiteView Page
    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    1y
    Quote from @Oswaldo Zamora:

    Good evening BP Community!

    I’m thrilled to share that I’ve been able to save up some investment capital and am now actively searching for the right market to dive into!

    Currently based in California, I’m on the hunt for a market that hits the sweet spot: meets the 1% rule, generates solid cash flow, and builds long-term equity. I know it’s a tall order—but I’m optimistic and eager to learn from this amazing community.

    If you’ve got insights, recommendations, or experiences to share, I’d truly appreciate your guidance. Let’s connect and build wealth together!

    Hey Oswaldo! Congrats on saving up and getting ready to jump in—super exciting time. I know finding a market that checks all the boxes (1% rule, solid cash flow, and long-term equity) feels like a tall order these days, but I’d really recommend taking a serious look at Columbus, Ohio. I moved here from Portland in 2020 to start investing and now own 10+ rentals, and this market has been a gem. The macroeconomics are on fire—tons of population growth, job growth, and major companies like Intel (building a $26B plant here), Amazon, Google, Facebook, Honda, Microsoft, and LG all making big moves in the area. It’s still one of the few places where you can buy a $120K–180K property that hits the 1% rule and cash flows right out of the gate. Plus, Ohio is super landlord friendly and there’s real appreciation upside too. Definitely worth checking out if you're looking to stretch your dollars and build long-term wealth. Happy to connect and answer any questions you have!
    [email protected]614-300-7535
    Jimmy Lieu, Red 1 Realty4.9122 Reviews
    WebsiteView Page
    2Reply
  • Bernice RetzloffPro Member
    Memphis, TN · Member since 2024 · 234 posts · 100 votes
    1y

    Hey @Oswaldo Zamora!

    Love the energy, and congrats on stacking up that investment capital! Coming from California, you’re definitely not alone in searching for markets that still hit the 1% rule and actually cash flow. Memphis is one of those rare places that checks a lot of the boxes: affordable entry points (often $100K–$150K), strong rent demand, landlord-friendly laws, and solid long-term fundamentals thanks to employers like FedEx, St. Jude, and Ford’s Blue Oval project. It’s also a market built for out-of-state investors, with reliable teams that handle everything from acquisition to management so you can invest confidently from a distance. If you want to explore how others are finding success here and see some real examples, happy to connect and share!

    901-664-1949
    0Reply
  • Matthew Masoud
    Investor · Orange County, CA · Member since 2014 · 363 posts · 408 votes
    1y

    Fellow Orange County out-of-state investor here. You'll want to take a look at the Midwest, it's your best bet to meet the 1% rule. Equity is slower to build there but by finding ways to add value you can get both cash flow and equity growth.

    Let's say you find a messed up quad for $250k in Cleveland, OH, for example.

    Current rents are $600/unit.

    Clean the building up, spend maybe $10k/unit ($40k total) and raise rents to $850/unit.

    Now the building brings in $3,400/mo gross and the building is likely worth north of $325k at this point.

    Made up numbers but properties like this exist all over the mid west. I know I've owned them

    Happy hunting. 

    0Reply
  • Tee Nassir
    Member since 2025 · 2 posts · 0 votes
    1y

    Hey Oswaldo! I'd love to connect, my partner and I specialize in out of state multifamily and fix&flip in the CA market. I's love to have a zoom call or face to face in order to learn more about what you are about and how can we add value to you. 424.239.9996 is my phone number. Give me a call or text. 
    Talk soon

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    1y

    @Ravindra Gudishala there's a button in my signature that says, "Website".

    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
    WebsiteView Page
    0Reply
  • Lindsay DavisBusiness Member
    Real Estate Broker · Birmingham, AL · Member since 2019 · 327 posts · 203 votes
    1y

    @Oswaldo Zamora,

    If you’re willing to do some digging, a good number of deals in certain Sunbelt markets with generally favorable rent-to-price ratios will meet the 1% rule. Tuscaloosa and Birmingham, both in Alabama, could be worth checking out here.

    The state’s low property tax rate also means that you’ll have an easier time producing cash flow, too, which is ultimately what matters. Finally, Birmingham and Tuscaloosa vary widely from zip code to zip code, so you’ll need to be selective when evaluating deals. Let me know if you have any specific questions about these markets!

    205-205-4118
    Spartan Invest4.8133 Reviews
    WebsiteView Page
    0Reply
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