Suggestions for my first market & help

Suggestions for my first market & help

Property Manager · Herriman, Salt lake county · Member since 2026 · 5 posts · 3 votes

I’m looking for some advice from experienced investors on choosing my first market.

I live in Salt Lake County, Utah. I originally started saving for a down payment on my family’s first single-family home, but as I’ve gotten closer to that goal and started analyzing deals, I’ve realized that $50,000 to $60,000 may go a lot further for me as an investment outside of Utah.

A little background on me. For my W-2 job, I manage a 137-door townhome community and have been doing that for almost three years. I handle essentially all of the day-to-day property management and have been fortunate to learn a lot while operating a profitable property with somebody else’s money. We’ve hit 100% occupancy multiple times over the last few months.

I also have about 10 years of maintenance experience. I’m comfortable with turns, repairs, renovations, and a lot of the hands-on work involved with owning rentals. I’m also a licensed real estate agent here in Utah.

Basically, I feel like I’ve spent the last few years learning the operational side of this business, and now I want to start building something of my own.

My biggest question is WHERE.

I’d prefer my first investment to be relatively close to home, especially since I have the ability to do a lot of the maintenance and rehab myself if necessary. The problem is that Utah and most of the surrounding markets aren't particularly affordable. Colorado is generally more expensive. Idaho has become pretty similar to Utah. California isn't realistic for what I'm trying to do, and Nevada may have some possibilities.

That has pushed me farther east. Kansas has caught my attention because there are still properties in my price range, and although it's roughly a 14-hour drive, that's close enough that I could realistically get there when needed.

My current plan is to spend the next year analyzing deals and learning a few markets while I finish saving. By the time I'm ready to purchase, I expect to have around $50,000 to $60,000 available.

I’m primarily interested in small multifamily, especially duplexes, but I’m open to SFRs if the numbers make sense. I’d also like the property to work with professional property management included in my underwriting, even if I initially manage it myself.

So, if you were in my position, living in Utah with $50,000 to $60,000 to invest and about a year to prepare, what markets would you be studying?

Would you prioritize staying within driving distance, or would you be willing to go farther for a substantially better market?

And for anyone investing from Utah, where are you buying and what led you to that market?

I’m not necessarily looking for someone to hand me a ZIP code or a deal. I’m trying to narrow this down to two or three markets that I can spend the next year really learning and analyzing.

3Reply
1,000 views

Most Popular Reply

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
1mo

Saw Cleveland got mentioned as good market. Thing about the Cleveland market is that it's super cheap. You can go on Zillow and find some of the cheapest houses in the USA. However, there is a lot of risk that comes with doing that.

For one, what a lot of people don't know is these properties usually only work if you have Section 8 involved.

I've made millions investing in these cheap Section 8 properties in Cleveland, but only because I know exactly what I am buying when I go into everyone of these Cleveland neighborhoods. Investors who don't have this info, well they get smoked.

I recommend reading The Ultimate Guide to Grading Cleveland Neighborhoods. Investors have been using that free guide for over 11 years to lower their risk as they enter the Cleveland market.

https://www.biggerpockets.com/member-blogs/4704/42419-cleveland-neighborhood-grades

See this reply in the discussion

23 Replies

Jump to latestLatest
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1mo

    @Jason Olson

    Hello. This question gets asked a lot. In general, I strongly recommend against picking a market based solely on price point, if that's what you're doing here. Purchasing a rental and putting it into service anywhere is expensive, as you'll have thousands and thousands of dollars in costs and expenses - closing costs on the purchase, rent-ready costs, lease-up costs to get rented out, repairs, turnover, etc. These costs get ignored quite a bit when people tout their "returns." This is the case everywhere, including Colorado, Kansas and Cleveland.


    If you're truly able to go all in on Kansas - go in person every month, build a network, and look for value add deals, and not just Zillow listings - great. Only you can determine that. Going once and then trying to Internet everything likely won't work as there's just no substitute for being hands on.

    Unfortunately, in general, returns on non-value add LTRs are very, very low right now (again, everywhere). Lower than savings or T-bill rates! I know this is a real estate forum (and I am still buying), but I am encouraging new investors to think very carefully about where to allocate their cash. You probably worked really hard to save up what you have and so throwing into a random LTR to get -$18 a month just makes zero sense.

    Hope this helps - happy to dialogue further. And here's some light reading about OOS.

    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

    Am I the only one that have realized real estate is an awful investment?

  • Investor · Los Angeles, CA · Member since 2023 · 17 posts · 23 votes
    1mo

    I would say be more open to markets that are farther than a couple of hours away. It is true that you have a big upper hand with your maintenance experience but when you are busy working a full time job, a leaky faucet in a property 2 hours away might as well be 10 if you don't have time to fix it yourself. A phone call takes the same amount of time if the property is in Saint George vs. if it is in Albany.

    Next, work backwards from your investment strategy. Are you looking for cashflow, appreciation, or some of both? Tailor your market to your goals. After that, just start looking. Look at things like unemployment, population growth, how friendly they are to landlords, etc. Then pick a market and stick to it. There is no wrong answer.

    There are plenty of websites that break down market statistics and do comparisons. Just choose one and do some research. BP even usually releases articles/breakdowns of their own.

    https://www.biggerpockets.com/blog/top-trending-rental-markets-to-start-2026

    https://doorhunter.ai/learn/best-out-of-state-rental-markets-2027

    https://www.noradarealestate.com/blog/top-cities-where-real-estate-is-poised-to-boom-in-the-next-2-years-2026-2027/

  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 700 posts · 292 votes
    1mo

    @Jason Olson You've already built a strong foundation. Managing 137 units, handling maintenance, and understanding day-to-day operations gives you an advantage many first-time investors do not have. The key now is choosing a market where that experience translates into a durable investment—not simply finding the lowest purchase price.

    Rather than starting with a list of cities, I would build a market scorecard around the factors that matter to your strategy: population and job trends, rent-to-price ratios, vacancy, property taxes, insurance, landlord laws, neighborhood-level supply, and the depth of local property management and contractor talent. Then underwrite several real deals in each market using professional management, realistic repairs, vacancy, capital expenditures, and travel costs. A market can look affordable and still be a poor investment if rents are stagnant or dependable local support is hard to find.

    For a first property, proximity has value, but I would treat it as one factor rather than a hard rule. Being able to drive to the property is helpful during acquisition and renovation, yet a 14-hour market is effectively remote ownership. If you go that far, the deal should work without depending on your own labor, and you should establish a reliable manager, contractor, agent, lender, and inspector before buying. Your plan to underwrite with management included is exactly the right approach; self-management can then be upside rather than a requirement.

    Over the next year, I would narrow the search to two or three markets, visit each one, interview local operators, and track actual listings and closed sales monthly. Also keep enough of the $50,000 to $60,000 for closing costs, initial repairs, and reserves rather than using all of it for the down payment. The best first market is usually not the cheapest or closest—it is the one where conservative numbers work and you have a dependable local team. This is general perspective, not individualized financial, legal, or investment advice, so confirm the financing, tax, and ownership implications with qualified professionals before moving forward.

  • Member since 2026 · 5 posts · 1 vote
    1mo

    Have you tried looking at South Carolina yet? It's a great and steady market with alot of expansion. You should check out invest_with_mason on instagram, I watch his videos for tips on 1031 exchange info, insight into the charleston/sc market and just the basics of investing. Good luck

  • Investor · Member since 2023 · 139 posts · 75 votes
    1mo

    Your operating background is a real advantage, since you already know vacancy, turn and repair costs better than most first-time buyers. Two practical suggestions:

    1. Size the deal to the cash. At $55K, 25% down plus 3% closing and a $10K reserve gets you to a property around $150K-$175K. So you're looking at a duplex or small SFR at that price, not $250K.

    2. Run every deal through one sheet with the same assumptions: 8% vacancy, 8-10% for a manager even if you self-manage, 10% for repairs and capex, and real taxes and insurance. Set a hurdle you can state in a sentence, like "8% cash-on-cash at today's rate or I pass". Then run 20-25 listings in each of your three candidate markets over the year. The markets that produce even three deals above the hurdle are the ones to dig into. That beats choosing a market on price per door.

    If a market passes, spend a weekend there before you commit. Talk to two property managers there and ask what rents they'd put on a specific listing. If their number is 10% under the listing, use theirs.

  • Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
    1mo

    Utah is a good market and of course I am partial to KC.

  • Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes
    1mo

    Happy to chat on Kansas City. For duplexes I would targe the 200-350K range. 50K as a downpayment would be maybe doable but could be tight

  • Property Manager · Herriman, Salt lake county · Member since 2026 · 5 posts · 3 votes
    1mo

    Thanks everyone for the responses! I really appreciate you taking the time to share your experience and advice.

    My biggest takeaway is that I need to focus less on finding a market close to home and more on finding one where the numbers actually work. Whether a property is 2 hours away or 14, I'll still need a reliable team on the ground.

    I also appreciate the advice about working backward from my available cash. My plan now is to spend the next year analyzing deals, comparing markets, and establishing some firm investment criteria. If I find a promising market but need a little more capital to make the numbers work, I'll have to consider saving longer.

    I really feel like my background in property management, maintenance, and real estate gives me a good foundation to succeed at this. I know I have plenty left to learn, but I'm excited to give it a shot!

    I'm curious, how many of you had family or friends telling you that you were crazy when you first started investing? I'm already getting some of that! Thankfully, my wife is on board. I realize this isn't the traditional path to homeownership, but the market we're entering in 2026 is very different from the one our parents experienced.

    One more question for everyone. What real estate investing audiobooks would you consider must-reads?

    I'm a big audiobook listener. I've already listened to Brandon Turner's The Book on Managing Rental Properties and I'm finishing The Book on Rental Property Investing. Next on my list is David Greene's Long-Distance Real Estate Investing.

    I'd love to hear what books made the biggest difference for you, especially when you were getting started.

    Thanks again for all the advice! Did I miss anything important that I should be considering?

  • Financial Advisor · St. George, UT · Member since 2026 · 5 posts · 1 vote
    1mo

    I work with a construction loan brokerage so I can't quite relate, however from my experience working with people in the area and living nearby, Salt Lake is booming. I haven't heard of anyone that has a particularly hard time renting out or selling in the area. It is pricy but I'm confident you wouldn't have a hard time making good returns on a property, especially if you plan to rehab.

  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    1mo

    Welcome, Jason. Three years running a 137-door community means you already know vacancy, turn costs and repairs better than most first-time buyers, so I'd spend your prep year on the market side.

    One thing that helped me: stop weighing drive time and ask whether you can verify a market remotely. A 14-hour drive and a short flight cost you about the same trip, so what really matters is a deal source and a property management team you trust.

    I'd pick three markets, run the same duplex template on live listings, and compare rent-to-price, taxes, insurance and the PM fee plus leasing fee. Columbus belongs in that mix. In my experience duplexes still come in around $200K, which works with $50K down, but taxes run higher than people expect, so underwrite those carefully.

    If it's useful, connect with me and we can trade notes as you narrow it to two or three.

  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 972 votes
    1mo
    Quote from @Jason Olson:

    I’m looking for some advice from experienced investors on choosing my first market.

    I live in Salt Lake County, Utah. I originally started saving for a down payment on my family’s first single-family home, but as I’ve gotten closer to that goal and started analyzing deals, I’ve realized that $50,000 to $60,000 may go a lot further for me as an investment outside of Utah.

    A little background on me. For my W-2 job, I manage a 137-door townhome community and have been doing that for almost three years. I handle essentially all of the day-to-day property management and have been fortunate to learn a lot while operating a profitable property with somebody else’s money. We’ve hit 100% occupancy multiple times over the last few months.

    I also have about 10 years of maintenance experience. I’m comfortable with turns, repairs, renovations, and a lot of the hands-on work involved with owning rentals. I’m also a licensed real estate agent here in Utah.

    Basically, I feel like I’ve spent the last few years learning the operational side of this business, and now I want to start building something of my own.

    My biggest question is WHERE.

    I’d prefer my first investment to be relatively close to home, especially since I have the ability to do a lot of the maintenance and rehab myself if necessary. The problem is that Utah and most of the surrounding markets aren't particularly affordable. Colorado is generally more expensive. Idaho has become pretty similar to Utah. California isn't realistic for what I'm trying to do, and Nevada may have some possibilities.

    That has pushed me farther east. Kansas has caught my attention because there are still properties in my price range, and although it's roughly a 14-hour drive, that's close enough that I could realistically get there when needed.

    My current plan is to spend the next year analyzing deals and learning a few markets while I finish saving. By the time I'm ready to purchase, I expect to have around $50,000 to $60,000 available.

    I’m primarily interested in small multifamily, especially duplexes, but I’m open to SFRs if the numbers make sense. I’d also like the property to work with professional property management included in my underwriting, even if I initially manage it myself.

    So, if you were in my position, living in Utah with $50,000 to $60,000 to invest and about a year to prepare, what markets would you be studying?

    Would you prioritize staying within driving distance, or would you be willing to go farther for a substantially better market?

    And for anyone investing from Utah, where are you buying and what led you to that market?

    I’m not necessarily looking for someone to hand me a ZIP code or a deal. I’m trying to narrow this down to two or three markets that I can spend the next year really learning and analyzing.

    If you want strong cash flow without tying yourself to a brutal driving distance, relying on a multi-state commute usually drains your margins and energy fast. With $50k to $60k ready to invest, your capital stretches vastly further by focusing strictly on established Midwest cash-flow markets where sub-$250k duplexes and turnkey single-family rentals actually pencil out with solid cap rates day one. Given your background in property management, underwriting professional third-party management from the start allows you to build a fully remote, scalable portfolio using reliable local boots-on-the-ground teams instead of trading your free weekends for long cross-country drives.

  • Realtor · Memphis · Member since 2021 · 48 posts · 26 votes
    1mo

    With your background, I’d put Memphis on your shortlist of two or three.

    On driving distance: I’d give that up for a better market. Memphis is a flight from Salt Lake, not a drive, but 14 hours to Kansas isn’t really “close” either. You won’t be doing your own turns from either place. What does transfer is everything else you’ve built. After three years running 137 doors, you know what good management looks like, so you can interview and hold a property manager accountable better than most out-of-state buyers. And with 10 years of maintenance, you can read a rehab scope and know when a quote is padded. Those two skills are where most remote investors lose money.

    Why Memphis: prices are low relative to rents, so a duplex can still cash flow with professional management in the underwriting, which is the test you said you want to pass. $50-60K covers 25% down plus closing and reserves at the price points here. The job base is steady (FedEx hub, logistics, the medical district), Tennessee has no state tax on wages, and there’s a deep bench of managers and contractors used to working with out-of-state owners.

    What to watch: it’s street by street. Appreciation is modest. It’s a cash-flow market.

    • Property Manager · Herriman, Salt lake county · Member since 2026 · 5 posts · 3 votes
      4w

      Devvrat, thank you for such a thoughtful response! This is exactly the kind of information I was hoping to get when I made this post. Memphis is definitely going on my shortlist!

      I've honestly been surprised by how many people have taken the time to share their experiences and recommendations. It's been incredibly helpful.

      My plan is to take the markets people have suggested, narrow them down to two or three, and spend the next year really studying them. I want to run as many deals as I can in each market using realistic numbers for professional management, maintenance, vacancy, and reserves.

      I'd like to keep a running record of the properties I analyze, including which ones actually meet my investment criteria.

      Ideally, I'll plot them on a map so I can start identifying neighborhoods and areas where the numbers consistently make sense. That way, when I'm financially ready to purchase, I'll hopefully have a much better understanding of which markets and neighborhoods offer the opportunities I'm looking for.

      I also appreciate your point about the driving distance. The more I've thought about it, the more I agree that finding the right market and building a reliable local team is probably more important than being within driving distance.

      Thanks again for the insight! I'll definitely be spending some time looking into Memphis.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    1mo

    Saw Cleveland got mentioned as good market. Thing about the Cleveland market is that it's super cheap. You can go on Zillow and find some of the cheapest houses in the USA. However, there is a lot of risk that comes with doing that.

    For one, what a lot of people don't know is these properties usually only work if you have Section 8 involved.

    I've made millions investing in these cheap Section 8 properties in Cleveland, but only because I know exactly what I am buying when I go into everyone of these Cleveland neighborhoods. Investors who don't have this info, well they get smoked.

    I recommend reading The Ultimate Guide to Grading Cleveland Neighborhoods. Investors have been using that free guide for over 11 years to lower their risk as they enter the Cleveland market.

    https://www.biggerpockets.com/member-blogs/4704/42419-cleveland-neighborhood-grades

  • Ryan SpathBusiness Member
    Real Estate Agent · Boise, ID · Member since 2017 · 605 posts · 385 votes
    4w

    I live in Idaho and invest here as well as in Florida. One question I’ve been asking myself a lot lately is: Where do I actually want to own properties 15–20 years from now?

    When we bought in Florida, those properties fit the goals we had at the time, and they’ve served that purpose. But as I’ve gotten further into investing, I’m thinking much more about the long-term picture and not just where I can get the best numbers today.

    Cash flow matters, but I’d be careful choosing a market simply because $50–60k goes further there. You may end up owning that property for decades. I’d look at population and job growth, long-term demand, quality of the neighborhoods you can afford, appreciation potential, and whether you actually want to keep owning there.

    I also wouldn’t put too much weight on a market being a 14-hour drive versus a flight away. At 14 hours, you’re probably not driving over there every time something happens anyway. I’d underwrite professional management from day one like you mentioned and treat your ability to self-manage or do repairs as a bonus, not something the deal depends on.

    One thing you may want to look into for your market is co-living. This is picking up steam here in Idaho and the properties that investors are doing this with actually make a solid return, is this something that would work in your market?

    • Property Manager · Herriman, Salt lake county · Member since 2026 · 5 posts · 3 votes
      4w

      Ryan, I really appreciate your perspective! You've brought up some great points, and I've actually spent quite a bit of time thinking about that exact question.

      Ideally, I see these first few out-of-state investments as a way to get my foot in the door and start building wealth through real estate. Whether I eventually sell them and reinvest into something larger here in Utah, or hold onto them long term and use the cash flow to help me invest in my own market, I'm open to either option. I really like the idea of having consistent cash flow for decades.

      I completely agree that market fundamentals matter. That's why I want to spend the next year studying a few markets, underwriting deals, and really understanding where I'm putting my money rather than just chasing cheap properties.

      I've also considered house hacking and co-living here in Utah. My wife isn't particularly excited about the idea of having tenants living above or below us, which I can understand! And with the capital I currently have available, the duplexes I've looked at here just don't make financial sense. That's really what's pushed me to explore other markets.

      Ultimately, I want to build something that will eventually allow me to compete in my own market, whether that's through equity, cash flow, or a combination of both.

      Thanks again for sharing your experience! I'm curious, have you considered eventually selling your Florida properties to reinvest closer to home, or do you see yourself holding onto them long term?

  • Joey BanasihanPro Member
    Investor · Boise, ID · Member since 2019 · 238 posts · 189 votes
    4w

    Hey Jason, you have been getting some great advice so far from many folks, and just putting yourself out ther and learning is awesome to see, so congrats on that. And I saw that you've taken a lot of this in and are looking to spend more time learning, which is great - but something I will say, that others may not, you win in real estate when you take action, reasonable risk, and in it for the long haul. I've been talking to newer investors like yourself since 2021, and each year they come back wanted to analyze more deals, get better at the numbers, or just hunting for the "right one" - they have still not bought a single property for the past 5 years. I am not saying you do not do your due diligence but at the end of the day find a team that have resources, knowledge, referrals, and will be there 6 month or 2 years after your purchase to help you if any issues or challenges arise - then take some action and let that experience be your ultimate teacher. We do this our out of state clients all the time, with our property management company, contractors, and more but we also have referrals to other teams like us in other states in the midwest depending on your goals. Happy to chat or refer you to others, but have conversations with people on the ground, take some reasonable risk, and enjoy the process :) You got this!

  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
    4w

    Jason, you actually have a pretty strong starting point. Managing 137 doors, having 10 years of maintenance experience, and being comfortable with turns and rehabs gives you an operational advantage that a lot of first-time investors don't have.

    With $50K–$60K to deploy, I'd probably study 2–3 markets where the numbers work without requiring you to be there every week, even if you're capable of doing the work yourself. I'd compare purchase price, realistic rents, taxes, insurance, property management, CapEx, vacancy, and long-term demand. Your ability to handle maintenance yourself is a great advantage, but I wouldn't let that alone determine how far from home you invest.

    I'd also keep more liquidity than you think you need. Having $60K available doesn't necessarily mean $60K should go into the acquisition. I'd want room for closing costs, initial repairs, reserves, and the inevitable surprise that shows up after you close.

    From the tax side, I'd also start thinking about the portfolio before you buy the first property. Depreciation and rental losses can look very different from the actual cash flow, and since you're currently W-2, you don't want to assume every rental loss will automatically offset your salary.

    I'd probably spend the next year doing exactly what you're proposing: pick a few markets, learn them deeply, underwrite a lot of deals, and figure out what actually works for your capital and your time.

    Feel free to DM me, I’d be happy to send over a few resources that might be helpful.

    INVESTOR FRIENDLY CPA®4.9242 Reviews
    TaxMD® | Tax Planning Software
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    4w

    @Jason Olson

    the references to "cash flow" in this thread are comical. if you buy a non-value add, on-market LTR , at today's financing, and put it under professional management, you might see cash flow - in year 17 of ownership.

    the only way anything cash flows early on is if you pretend the costs and expenses associated with it don't exist. or, you buy in all cash, self-manage, fix everything yourself, and have no capex. i'd like someone to explain to me how spending $4000 in closing costs, a whole month's rent to lease out, making a few thousand in repairs, and then getting $18 in rent over expenses in month 3 is cash flow.

  • Ryan BrownPro Member
    Real Estate Agent · Louisville, KY · Member since 2022 · 114 posts · 39 votes
    2w

    @Jason Olson I'd put Louisville on your list of 2-3. I'm an agent here and I own and operate rentals here, so take that for what it's worth, but I think it fits what you described better than most.

    Duplexes are actually in your price range. I pulled our MLS this morning and there are 52 duplexes for sale in Louisville with a median list price around $260K, and half are $250K or under. With $50-60K you can buy one with 20-25% down and still have reserves.

    Your maintenance background matters more here than in a lot of markets. A lot of our duplex stock in Old Louisville, Germantown and the South End is 80-120 years old. That scares off a lot of out-of-state buyers, but for someone who can scope a turn or a rehab themselves and knows what a contractor bid should look like, it's where the value is. You'll also be able to tell pretty quickly whether a property manager here knows what they're doing.

    Sellers are also more flexible right now than they've been in a while. On Oct. 15 nearly 1 in 4 active listings in our MLS had been sitting 90+ days, so there's room to negotiate if you're patient. That fits your one-year plan.

    It's farther than Kansas by car, but it's a one-stop flight from Salt Lake, so you can be here in about 6 hours instead of driving 14. I've partnered with and done deals for a lot of out-of-state investors, and I work with local lenders who are comfortable lending to them.

    Since you're giving yourself a year to learn a few markets, I'm happy to set you up on a saved search that emails you every new Louisville duplex and price drop. After a few months you'll know what a good deal looks like here without having to ask anyone.

  • Marc MoraPro Member
    Investor · Fort Lauderdale, FL · Member since 2026 · 218 posts · 33 votes
    3d

    @Jason Olson , let's connect. Running 137 doors with ten years of maintenance behind you counts for a lot, and a 14-hour drive takes some of that away.

    So it may come down to how much you want your own hands on this first one, compared to how far the money goes somewhere cheaper.

    Talking markets over with a few sharp people helps a lot, and I'll make the introductions. Would this rental come before your family's own home?

  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    3d

    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/Market”.

    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?

    What do you think will happen if you rehab a Class D rental to Class A standards?

    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/Market.”

    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
    https://www.biggerpockets.com/forums/963/topics/1195280-experience-of-oos-investing-in-cleveland-after-15-years
  • Real Estate Agent · Garden City / Boise, ID · Member since 2026 · 5 posts · 5 votes
    1d

    Happy to share what we're seeing in the Treasure Valley if Idaho stays on your list. Nampa and Caldwell pencil very differently than Boise.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.