Living in NYC Investing in Iowa
Member since 2025 · 20 posts · 21 votes
Living in NYC Investing in Iowa
Most Popular Reply
Arman AhmedPro Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 904 votesQuote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
I think you're looking at it the right way. If NYC doesn't make sense financially, investing out of state can be a great way to get started. Iowa has some solid markets, but I'd also compare it with Ohio since many investors choose it for the same reasons,lower entry prices, strong cash flow, and plenty of opportunities to scale. The biggest factor isn't the state itself; it's having a reliable local team that knows the neighborhoods, can verify your numbers, and manage the property well after closing.
21 Replies
- Rental Property Investor · Member since 2026 · 56 posts · 29 votes2mo
Following this thread - had my eye on Iowa as well, one of the hottest states right now in terms of median home value growth over the past few months. I invest out-of-state but mostly on the east coast where we get slower but steady growth
- Member since 2025 · 20 posts · 21 votes2mo
@Nick Sansivero I was considering the east coast as well since upstate NY is a lot more affordable than the NYC metro or Jersey, but something that I'm concerned about is that it's extremely tenant friendly which can cause a nightmare
- Rental Property Investor · Member since 2026 · 56 posts · 29 votes2mo
Quote from @Fabio Cattolico:
@Nick Sansivero I was considering the east coast as well since upstate NY is a lot more affordable than the NYC metro or Jersey, but something that I'm concerned about is that it's extremely tenant friendly which can cause a nightmare
100%.. owning rentals in northern Jersey has taught me that lesson
- 2moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 904 votes
Quote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
I think you're looking at it the right way. If NYC doesn't make sense financially, investing out of state can be a great way to get started. Iowa has some solid markets, but I'd also compare it with Ohio since many investors choose it for the same reasons,lower entry prices, strong cash flow, and plenty of opportunities to scale. The biggest factor isn't the state itself; it's having a reliable local team that knows the neighborhoods, can verify your numbers, and manage the property well after closing.
- Member since 2025 · 20 posts · 21 votes2mo
@Arman Ahmed very true! Building a good team is crucial! The reason Iowa seems more attractive to us is that Ohio is so hot among investors and we don't know the state. We feel much more comfortable in Iowa
- 2moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
Good work on getting started @Fabio Cattolico . Tons of investors from NYC usually tend to buy real estate in the midwest because it is cheaper, land-lord friendly, and tech companies investing has boosted the economy.
You should do some research and find a good market that has good potential and connect with an investment realtor who can connect you with their team of contractors, lenders, and property managers.
They will also send you off-market and on-market deals that you can buy. Start with turnkey rentals then shift to the BRRRR model and you can recycle your capital and grow your portfolio. Eventually, do a 1031 exchange when you have enough units and exchange it for a large multi-family complex without paying capital gains.
ReafCo | Ahmed Group 55 Reviews- Member since 2025 · 20 posts · 21 votes2mo
@Alfath Ahmed that would be the plan!! Do you have experience investing oos in the Midwest? If so curious to hear what market and how that has been going?
- Investor · Louisville, KY · Member since 2017 · 92 posts · 38 votes2mo
I'd probably start by talking to a few investor-friendly agents and property managers in the area before buying anything. They can give you a much better feel for tenant quality, rent trends, and neighborhoods than you can get online. Iowa seems to have solid fundamentals, but having a reliable local team is what makes long-distance investing much less risky. Best of luck!
- 2moJoseph ScoreseBusiness MemberBanker · Philadelphia · Member since 2009 · 2k+ posts · 629 votes
Fabio, I think you're approaching this the right way by letting the numbers—not just your location—drive the decision.
One advantage you already have is a connection to Iowa through family. Even if they aren't directly involved in the investment, having people who understand the local market can be invaluable when building your team.
Before choosing a market, I'd focus on:
- Employment and population trends that support long-term rental demand.
- Neighborhood-level analysis rather than just city-wide averages.
- Building a strong local team (agent, property manager, contractor, and lender).
- Running conservative underwriting with realistic vacancy, maintenance, and capital expenditure assumptions.
If you're considering small multifamily, make sure the property generates enough cash flow to justify the added complexity of owning out of state. Sometimes paying a little more in a stronger submarket leads to better long-term performance than simply chasing the lowest purchase price.
I've worked with many investors who successfully build portfolios several states away. The ones who perform best treat their investment like a business, rely on data, and build trusted local relationships before they buy.
Best of luck with your first acquisition—Iowa can absolutely make sense if the fundamentals and your team are in place.
- Member since 2025 · 20 posts · 21 votes2mo
@Joseph Scorese hey Joseph, I really appreciate the insight! Do you have any market recommendations I should look into a bit more. Iowa is definitely high on the list but open to others that are not over saturated
- 2moAbel CurielBusiness MemberReal Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
Quote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
Hello Fabio,
Great idea, looking into the Midwest.
NYC pricing keeps returns very tight. Many househackers are in the red for 5+ years. The ongoing legal squeeze on landlords doesn't help.
To find information, previous posts, and people in the Iowa market, I'd recommend using the search feature.
In addition, you can set up keyword alerts so that you're notified any time a location or topic of interest is mentioned in the forums.
All the best!
Abel
REbuild Team - eXp Realty5234 Reviews - Investor · Ankeny, IA · Member since 2022 · 158 posts · 129 votes2mo
Quote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
Hey @Fabio Cattolico I live and invest in Iowa, would be happy to talk shop and bounce ideas off and give you any feedback I can provide. I'll shoot you a DM and to kick off the conversation, but I can say, it's a solid market. Look forward to connecting!
- 2moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesWelcome to BP, Fabio! I think Iowa is a solid option, especially since you already have family ties there and have spent time in the area. That local familiarity is a big advantage when you're investing remotely. I'd spend extra time researching the specific neighborhood, local employers, population trends, vacancy rates, and whether the property will cash flow with conservative numbers. Since you're investing out of state, having a great property manager and a few reliable contractors lined up before you close can make a huge difference. Cedar Falls has a stable rental market thanks to the university, but I'd also compare it with a few other Midwest markets before making a decision. I moved from Portland to the Midwest a few years ago and found there are several markets where you can still buy at reasonable prices while getting solid cash flow. Columbus, Ohio is one I'd put on your list to compare because it's seeing strong population and job growth from companies like Intel, Google, Amazon, Honda, and Anduril, while there are still neighborhoods where investment properties can be picked up around the $120k-$180k range and produce positive cash flow. Since you already have a great rental situation in NYC, taking your time to buy the right first out-of-state property is probably the better move than forcing a deal. Happy to connect and answer any questions you have!
Quote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
Jimmy Lieu, Red 1 Realty4.9119 Reviews - 2moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
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 Management4.9450 Reviews - 2moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 122 votes
Quote from @Fabio Cattolico:
Hey Everybody,
My wife and I want to start building our real estate portfolio and since we live in NYC we were thinking of out of state investments in Iowa. Reason is, low entry price, decent cash flow, and we've been to Iowa a few times since there are some family members there. We were considering a small multi-family in Cedar Falls but are also open to other suggestions. My preferred strategy would have been house hacking for our first investment but we have a great deal on rent in NYC, need to stay here for a bit longer, and surrounding areas are extremely expensive and oftentimes not very desirable. Curious to hear if there are any out of state investors in Iowa out there and what your take is. What to watch out for, pros and cons, etc. appreciate your help!!
Best,
Fabio
@Fabio Cattolico
House hacking can be a great way to get started, especially if you have local family who can help you understand the market. I'd spend extra time building a local team—agent, property manager, and contractor—and make sure the numbers still work with conservative rent and maintenance assumptions before buying out of state. - Investor · Independence, IA · Member since 2016 · 103 posts · 88 votes2mo
Our investements in Iowa have been great. I've got several rental properties in the Waterloo area as well as Cedar Rapids. Stable, and a good population of renters in both those areas. I'm also the broker/owner of a property management company based in Waterloo. If you'd like to talk about your goals and what properties may fit, we'd be happy to help. We can help through the entire process from purchase, managing, and eventually selling.
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes2mo
Hi Fabio,
I can (somewhat) relate to this. I live in NYC, and my first investment property wasn't here either. I bought in Buffalo because, like you, I wanted a market with a lower barrier to entry and better cash flow than what I was seeing locally.
One thing I learned is that success with out-of-state investing has less to do with the market itself and more to do with the team you build. Having a great agent, property manager, contractor, and lender who know the local market is what gave me confidence buying from hundreds of miles away.
I also wouldn't get too fixated on finding the "perfect" market. Every market has tradeoffs. I'd focus on neighborhoods with strong rental demand, stable employment, and numbers that still make sense after factoring in vacancies, maintenance, and capital expenses.
The fact that you have family in Iowa is a nice advantage too. Even if they're not involved in the investment, having local connections can be valuable. That said, feel free to reach out if you have any more questions - my DMs are always open!
- Investor · Charleston, SC · Member since 2018 · 192 posts · 80 votes2moFabio, local team is table stakes. The second mistake is not defining the operating cadence before closing. Ask the PM for a sample owner statement, full fee schedule, repair approval threshold, and a rent ready timeline before you write the offer. If they cannot show how money and repairs get reported every month, do not underwrite their promises as facts.
- 2moAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
@Fabio Cattolico, from a tax side, since you'd be operating in Iowa while living in NYC, you'll file an Iowa nonresident return alongside your NY return, NY generally credits taxes paid to Iowa so you shouldn't be double-taxed, worth confirming that works cleanly for you.
One thing that matters a lot here: New York doesn't conform to federal bonus depreciation, it requires a full addback. So if a cost segregation study identifies shorter-life components (5, 7, 15-year property) and you claim 100% bonus depreciation federally, NY makes you add that back and depreciate those components on their normal MACRS schedule instead. Iowa fully conforms, no addback, so your Iowa return tracks the federal deduction cleanly. Net effect: a cost seg study benefits you fully on your federal and Iowa returns, but gets spread out over several years on your NY return, so your state-level savings won't match the federal number.
Also worth knowing, a straight rental in Cedar Falls (versus house hacking) means the whole property depreciates from day one, no split with a personal-use unit, that's actually a plus. Material participation matters too since you'll likely be managing remotely, that's what determines whether losses can offset your NYC income at all. Happy to connect!
INVESTOR FRIENDLY CPA®5241 Reviews - 1moBasit SiddiqiBusiness MemberAccountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
I personally love the idea of investing in lower cost markets when you live in a high cost of living market.
You can(hopefully) make a good salary in a HCOL such as NYC and then put those dollars(where it will go long) in areas such as Iowa City.
Basit Siddiqi CPA4.979 Reviews
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