Have cash looking to build portfolio
Member since 2020 · 2 posts · 10 votes
Have cash looking to build portfolio
Most Popular Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votesHi Matthew - are you able to make a whole bunch of trips to Mobile and build a network? If you can't, I think trying to invest purely remotely is spectacularly high risk. That's what these folks found out.
Turnkey Nightmare: Property Manager Ignored My Warning About a Missing A/C…
Nightmare with my property manager - advice needed!
Feedback Needed: $8.8k Turnover Quote for 2BR Duplex (Half)
Out-of-State Landlord Nightmare: 4 Months No Rent, Cleveland Escrow Battle
Failed BRR in Memphis TN
A Cautionary Tale About a Property Manager in Cinncinatti
Also, please note that there is no cash flow on LTRs right now in the short term. None.
27 Replies
- 3moNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
Hi Matthew - are you able to make a whole bunch of trips to Mobile and build a network? If you can't, I think trying to invest purely remotely is spectacularly high risk. That's what these folks found out.
Turnkey Nightmare: Property Manager Ignored My Warning About a Missing A/C…
Nightmare with my property manager - advice needed!
Feedback Needed: $8.8k Turnover Quote for 2BR Duplex (Half)
Out-of-State Landlord Nightmare: 4 Months No Rent, Cleveland Escrow Battle
Failed BRR in Memphis TNA Cautionary Tale About a Property Manager in Cinncinatti
Also, please note that there is no cash flow on LTRs right now in the short term. None.
- 3moAndrew PostellPro MemberLender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
@Matthew Sullivan some of what you are asking would come from a realtor. At the top of this page is a link for "Agents". Just click on that and interview a few of them to ask them those questions. Working this way is determined by how much downpayment you are putting on a property. So, if you want "good cash flow"...and you have 50% downpayment, then yes, maybe "good cash flow" is possible. I mean, "good" is open to interpretation, but your downpayment amount will dictate your cashflow amount. I would also say that "strong market" and "good tenant" are also terms that are open to interpretation. So, seek to define those a little better and your goal will become easier.
Hope that helps!
- Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 939 votes3mo
Have you looked in Mobile? What do you think?
It is far easier and less risky to invest locally versus remote. You can look at the property yourself and actually meet your contractors locally. You have to believe what everyone tells you when remote, especially if you never visit the property. I recommend staying local.
For simplicity and with literally less than 2 minutes invested, I did a Zillow search for 3BR properties under $150k in Mobile. There are currently 88. How do they look?
- Lender · AZ · Member since 2022 · 148 posts · 95 votes3mo
I agree with @Nicholas L. on this one. I have helped out a few investors from higher priced markets (Like CA) buying into lower priced markets (OH, MO, IN, etc) and most times it isn't nearly what they expected. Yes, you are "cashflowing" but with very little to no equity gain. Then when the vacancy hits you'll spend most of what you just made on that monthly "cashflow." A little harder to buy "good deals" in these markets.
Not to mention of doing it all virtually. If it were me I would invest in markets I have been to and am familiar with. - 3moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
Good question @Matthew Sullivan. What got you interested in Mobile, AL?
I usually tell OOS investors to find a good market in the midwest where your investments would make sense from both cashflow vs. appreciation.
You want a market that is tech driven, landlord friendly, and affordable. That will mean more jobs, more income, higher property prices, and better opportunity for your rental to perform better.
Any state in the midwest works. Find a major city and only invest there. Connect with a good investor-focused agent who is also an investor themselves. Have him connect you with his team of contractors, lenders, property managers. Go visit the market.
Your agent will send you good investment opportunities off-market and on-market. Ask for rent comps, sales comps, info on mechanicals, and have agent find out how far on the price you guys can go to make it make sense.
Get inspection/contractor walkthrough, speak to PM on rents, and that is all.
ReafCo | Ahmed Group 534 Reviews - 3moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 972 votes
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
If you're buying out of state, I'd spend as much time picking the neighborhood and local team as you do picking the property. There are still Midwest markets where your budget can go a long way, but every city has blocks that perform very differently. Focus on stable neighborhoods with consistent rental demand instead of chasing the cheapest houses. A good local agent, property manager, and contractor will help you avoid costly mistakes and make scaling much easier. - 3moAmit PatelBusiness MemberProperty Manager · Bartlett, IL · Member since 2025 · 180 posts · 70 votes
Hey Matthew,
Congrats on getting started with cash in hand. That puts you ahead of a lot of new investors. Out of state buying can work well, but under one hundred fifty thousand with solid tenant quality and cash flow narrows things down quite a bit in two thousand twenty six.
Realistic markets right now for that price range with decent cash flow and tenant demand tend to be in the Midwest and parts of the South. Certain neighborhoods in Cleveland, Cincinnati, Indianapolis, Saint Louis, Memphis, Birmingham, and some smaller cities in Ohio, Indiana, and Alabama. These areas often have working class renters who pay on time when the property is decent and the neighborhood is not too rough. Look for pockets near job centers, highways, or revitalizing downtowns rather than the absolute cheapest blocks.
Up and coming areas usually show signs like new employers moving in, improving infrastructure, rising home values even if slow, and lower crime trends. Avoid anything that looks like it has been declining for years. Tenant quality and turnover will kill your returns.
Price points. In many of these markets you can still find single family or small multifamily in the ninety thousand to one hundred fifty thousand range that cash flow after realistic expenses. Taxes, insurance, maintenance, vacancy, and property management. Aim for at least the one percent rule or better on gross rent, and run conservative numbers. Do not count on perfect occupancy or zero repairs.
A few practical tips. Do not buy sight unseen. Get a local agent and property manager in the specific neighborhood before you make offers. They will tell you which blocks actually have good tenant demand versus which ones just look cheap on paper. Start with one market and learn it deeply instead of spreading across several states. Focus on turnkey or light cosmetic rehabs at first. Heavy rehabs from out of state get expensive fast.
The good tenant reputation part is huge. Look at crime maps, talk to local property managers about turnover and collection issues, and drive or have someone drive the streets. A one hundred twenty thousand dollar house in a sketchy area can end up costing you more in the long run than a one hundred forty thousand dollar house in a slightly better pocket.
Casanomy Property Management561 Reviews - 3moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
Great question and welcome! If your goal is to buy 2–3 rentals under $150K each, that's still realistic in a handful of Midwest markets, but you'll want to focus on neighborhoods with stable rental demand rather than just chasing the cheapest properties. Since you're asking about markets, I'd definitely put Columbus, Ohio on your list. I moved here from Portland in 2020 to invest and now own 10+ rentals. There are still opportunities in the $120K–$180K range depending on the neighborhood and property condition, and I've seen many of those produce solid cash flow. A client of mine picked up a house around $120K that's now renting for about $1,550/month. Columbus also benefits from strong population growth, expanding employers like Intel, Google, Amazon, Microsoft, Honda, LG, Nationwide, and Anduril, which continue to support long-term housing demand. I'd focus on neighborhoods with consistent rental history, low vacancy, and access to jobs rather than trying to find the absolute lowest-priced homes. The cheapest areas aren't always the best investments. Happy to connect and answer any questions you have!
Jimmy Lieu, Red 1 Realty4.9124 Reviews - 3moJordan RayBusiness MemberReal Estate Agent · Memphis, TN · Member since 2023 · 642 posts · 337 votes
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
Welcome to BiggerPockets! If you're looking to buy 2–3 out-of-state rentals under $150K each, I'd take a serious look at Memphis because it's one of the few major markets where that budget is still realistic. You can absolutely find solid single-family rentals in that price range, and depending on the neighborhood and condition, many still meet the 1% rule, making them attractive from a cash-flow standpoint. Rather than chasing the next "up-and-coming" area, I'd focus on neighborhoods with proven rental demand, stable performance, and fundamentals that support long-term ownership. Memphis is very neighborhood-driven, so you really need to understand the city layout and what each area offers. For investors who want to scale faster, local hard money lenders will often fund 100% of the purchase and 100% of the rehab, with many investors averaging around $10,000 out of pocket at closing per deal, which can make the BRRRR strategy much more achievable. Start practicing by analyzing ARVs, rents, expenses, and market trends, and spend time learning the overall layout of Memphis so you know exactly what you're buying before making offers. I'd also recommend building your boots-on-the-ground team early—an investor-friendly agent who also owns rentals, a solid property manager, a reliable general contractor, and the right lending and hard money contacts. Having that team in place will give you the confidence to buy from out of state and help you avoid expensive mistakes. Feel free to reach out, talk soon!
Jordan Ray - eXp Realty5109 Reviews - 3moMarc RiceBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
I invest in Ohio and I will advice the same for you. Great for out of the state investors with a stable cash flow and appreciation. Happy to help!
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews - Member since 2026 · 26 posts · 10 votes3mo
Hi Matthew,
Getting started in real estate out of state CAN be difficult, especially now when the market is sort of on its head. I would recommend finding an off market listing in a growing metropolitan area! Nashville has seen steady, constant growth which I am sure you are familiar with. There are always opportunities!
- 3moShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Matthew Sullivan could you give a little more context. You say this will be your first out of state investment. How many deals have you done in your own state? And which state is your home state? You say you have money to buy some homes. Are you looking to buy in Cash or get financing on them? And if so, what percent financing?
- 3moGarrett CrosbyPro MemberReal Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes
Matthew, I'm the exact profile Carl mentioned above - I'm based in LA, and every buy & hold I own is out of state because California pricing doesn't work for the numbers I want. So take this as real experience, not theory.
My properties are all in Fayetteville, NC, in the $105k-$157k range, and they cash flow $400-550/month each after everything. That's very much in the ballpark of what you're describing. It's still possible in the right markets, despite the "no cash flow anywhere" takes floating around this thread - it depends heavily on the specific market and deal.
The single biggest factor in those numbers working wasn't the market, it was the team I built there before I ever made an offer: an agent who actually invests, a property manager I could trust, and a contractor for value-add work. Pick your market based on where you can build that team well, then let individual deals prove themselves with real numbers.
Happy to share more of what worked and what I'd do differently if it's helpful.
- Rental Property Investor · Grapevine, TX · Member since 2020 · 139 posts · 54 votes3mo
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
Is there a market that caught your eye? I buy in 11 markets for rentals. All under the $300k ARV. Average ARV is about $150-$215k depending on the location.
- 3moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
A common issue, so Copy & Paste info below:
You’re ALWAYS better off investing locally, where it’s easier to:
- Learn the market
- Network to find deals
- Network to find contractors
- Be more hands-on
- Driveby property to keep tabs on it
- Network to find a decent Property Management Company (PMC)
Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.
If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully building a knowledgeable & trustworthy local team.
The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!
They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.
Then they’re shocked when their performance expectations aren't met😞
If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.
You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:
- Many of them don't know/care what Class the properties are, so they're incompetent.
- Others know exactly what they are doing, so should be labeled as crooks!
EITHER WAY YOU LOSE!
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 will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.
The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.
Why is that important?
Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually 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%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
For example, Metro Detroit has 132 cities and the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying to make better investing decisions.
Horror Stories from those that did NOT Understand What they were Buying:
https://www.biggerpockets.com/forums/48/topics/1137397-baltimore-a-path-to-never-ending-pain
https://www.biggerpockets.com/forums/432/topics/1231840-sell-at-a-loss-or-rent-at-a-loss
https://www.biggerpockets.com/forums/311/topics/840134-memphis-turnkey-tenant-turnover-costs
Logical Property Management4.9462 Reviews- Member since 2020 · 2 posts · 10 votes3mo
@Drew Sygit wow! I learned a lot just from your response alone and you have provided me a tremendous amount of insight on items I haven't considered. Thank you for this
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes3moIf you learned a lot of basic material think about what you don't know yet. Get trained if you want successful investing. It isn't like baking a cake. (An old friend uses that line)
Quote from @Matthew Sullivan:
@Drew Sygit wow! I learned a lot just from your response alone and you have provided me a tremendous amount of insight on items I haven't considered. Thank you for this
- Specialist · NJ · Member since 2022 · 1k+ posts · 663 votes3mo
I think you can't beat the rust belt for cashflow comparative to price. The 1% rule doesn't exist many places anymore but it does there. I work closely with a dynamite agent/wholesaler/investor in a market in that region and there's lots of built in margins to properties if you know how to buy. He's also well connected to trades people, local investors, and a whole host of agents and wholesalers.
I can introduce you if you wish I think he has a nice deal or two in his pipeline currently.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes3moEach market has it's own considerations and buying out of state to make a little more money is like buying a Volkswagon Bug and putting a Bugatti engine in it. It's fun and it's exciting but it takes a lot of money and it's a pain. Determined investors can make it run but it won't necessarily be a smart move.
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
Wherever you are, study the market that is within a comfortable drive and compare properties to each other. That's a solid market where you can make a good living with a minimal amount of hassle. If you are in a tiny market, it's better to move to a larger market than to try to shoehorn an expensive solution meant for a bigger market into a tiny market.
Get some training on how to find the gems in any marrket.
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes3mo
Exactly what Nicholas said. Its a recipe to lose and even those cashflow areas really do not cashflow now with management and all that factored in. You are far better buying a quality area 4 unit with a large downpayment and playing the long game or doing a local value add. Little deals in some cheap midwest town are complete losers if your not local.
- 3moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 124 votes
Quote from @Matthew Sullivan:
I'm new to out of state investing of doors. Looking for guidance of neighborhood with good tenant reputation, good cash flow, and strong markets. What areas are in demand and what areas are up and coming. Looking to buy 2-3 properties under $150k each of possible. What's the realistic price points?
@Matthew Sullivan
If cash flow is your priority, I'd focus less on finding the absolute cheapest properties and more on markets with stable job growth, landlord-friendly regulations, and strong rental demand. Buying 2–3 solid properties in markets with consistent fundamentals often outperforms chasing the highest projected returns. Good luck building your portfolio! - 3moNatalie NixonPro MemberReal Estate Consultant · Birmingham, AL · Member since 2023 · 18 posts · 12 votes
Hi Matthew,
@matthew
If you are in Mobile, have you considered other parts of Alabama? I have found Birmingham and Central Alabama offer great opportunities in the $150k - $170k range.
Natalie
- Real Estate Broker · Member since 2024 · 134 posts · 62 votes1mo
@Matthew Sullivan Under $150k with "good tenants" narrows fast. In Birmingham the cheap end cash flows if you buy right, but a lot of it is Class C/D and kills you on turns if PM + reserves aren't honest. Team before market: investor agent, GC, PM who will refuse bad streets. Are you optimizing for cash flow hold or capital recycle (BRRRR)?
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