All Forum Posts by: Taz Zettergren

@Gp G..   

I know a lot of investors are still chasing the 2% rule, but just to set expectations realistically, that’s incredibly rare in today’s market unless you're in heavily distressed areas or working with extreme value add deals. Most stable markets with decent neighborhoods are closer to the 1% rule and even that often puts you in less desirable areas with trade offs in consistency and long term stability.

If your goal is consistency and scalability, I’d recommend aiming around the median-priced home in any given market. Those tend to attract better long term residents and have lower turnover and maintenance issues, rents tend to be around .7-.8 in these areas.

In leveraged real estate, cash flow is just one small piece of the puzzle. Between debt service, insurance, taxes, management, and upkeep, true cash flow often doesn’t show up until the property's been held long term or is paid off, that's when you truly cash flow. Equity growth, rent growth, tax benefits, and principal paydown are what drive real wealth, not just the monthly spread.

Hope that gives a little clarity as you plan your next moves. I'd recommend the Midsouth markets because they're affordable, they're landlord friendly states and there's high demand for high quality homes. Best of luck! 

@Chaim Mal 

You’re definitely not alone, lots of investors in high priced markets like Brooklyn are exploring out of state options. When you do, I’d recommend focusing on affordable cities with landlord friendly laws and staying within 15% of the market’s median home price. That’s where demand tends to be strongest and your downside is more protected.

Markets like Memphis, Little Rock, and parts of Oklahoma are great examples. They offer lower entry points, strong rental demand, and policies that tend to favor property owners. Plus, these areas are growing steadily without the volatility of some higher priced metros.

Whatever you decide, make sure you vet your local team well, boots on the ground support is key when investing remotely. Good luck getting started!

@Steve Bob  you’re thinking about this the right way. I’d recommend leaning toward median-priced homes in markets like Memphis, Little Rock, OK, or TX—these areas typically fall in the $200K–$300K range and strike a solid balance between cash flow and long-term appreciation.

You’ll want to avoid the ultra-cheap stuff because it often means weaker neighborhoods, more maintenance issues, and higher resident turnover. That low entry point can be tempting, but it usually ends up costing more in the long run and creates a less passive experience. The middle ground is where you find the best mix of stability and upside.

@Jasmyne Rucker welcome to the world of real estate investing! It’s great that you’re doing your homework early on.

The best first step really depends on your goals, how much liquidity you have, and how hands-on you want to be. If you're planning to be an active investor, especially in flips, you’ll want to get very familiar with sourcing deals, accurately estimating renovation costs, managing contractors, and potentially dealing with property management on the back end if you decide to hold.

If you're leaning more toward rentals and a long-term wealth-building strategy, single-family homes can be a great entry point. For more passive investors, there are companies out there that offer fully renovated, rented, and managed homes, and some even offer investor-friendly financing with rates as low as 5.75%.

Feel free to reach out if you have any general questions about the Memphis market, it’s an area with a lot of activity and a variety of opportunities. Best of luck on your investing journey!

@David Fals 

Great question and totally understand your concern, especially being a first time investor. A lot of it really comes down to where you're investing.

In markets where I’ve focused like Memphis, Little Rock, parts of Texas and Oklahoma, single-family homes tend to be in higher demand. They attract more stable, long-term residents and are often easier to resell, making them a bit more liquid than multifamily options. So in those areas, single-family properties can actually feel a little “safer” in terms of turnover and long-term performance.

That said, in denser cities like parts of NJ, NY, or Lehigh Valley, duplexes or quads may be more the norm and more attractive depending on the neighborhood and tenant profile. They can certainly help spread vacancy risk with multiple units under one roof, but they often come with higher management needs and repair costs, especially if older.

Regardless of the route you go, I’d definitely recommend having at least 6 months of reserves. Vacancies and repairs are inevitable at some point, it’s just part of the game, and having that cushion gives you peace of mind while you learn and grow your portfolio.

Good luck with the first deal, excited for you to get started! Let me know if I can help with anything.

@Phawis Thammasorn welcome to the family! Thank you for giving us the opportunity to serve you

will you send me the address on this please? 

@Danilo Perea

You're right to say there's no universal "best" property class, it really does depend on your strategy, goals, and how hands on you want to be. That said, one thing to be careful with is how neighborhoods are graded. Class A, B, C, and D are loosely defined and can vary by market, so what one investor calls a C+ might be seen as a B- by someone else.

Instead of getting caught up in the label, a safer approach, especially for newer investors is to focus on areas close to the median home price for that market. These tend to offer the best balance of stability, demand, and long term performance. They're also more insulated during downturns because they cater to the largest pool of renters.

Properties around the median price are typically in working class to middle income neighborhoods. They attract reliable tenants, hold value better, and don't require you to take on the headaches that often come with deeply discounted homes in rougher areas.

Appreciation and cash flow are both important, but starting with something in a stable, in demand area near the market's median price often sets you up best for long term success, especially if you’re investing out of state or looking for a more passive approach.

@Ihosvany Castaneda

Appreciate you putting the question out there—great to see you doing your due diligence. Section 8 can definitely be part of a solid rental strategy, but it’s not without its challenges, especially when investing out of state.

Be careful with the common assumption that "guaranteed rent" equals "guaranteed success." While the payments are reliable, you still need to screen thoroughly, stay on top of maintenance, and work with a team that knows how to navigate the Section 8 process. And most importantly, you want to avoid chasing high returns in rough neighborhoods just because the numbers look good on paper. That’s often where investors run into the most headaches—higher turnover, deferred maintenance, and inconsistent tenant quality.

There are great operators out there offering fully renovated homes in solid B-class neighborhoods where demand is strong and management is tight. That’s where the long-term value is built. If you go the Section 8 route, make sure you’re working with people who know how to play the game the right way and in the right areas.

@Victor N.

Great to see you're diving into building your rental portfolio! You're right, at current rates, making single family homes cash flow can be a challenge. Have you considered expanding your search to markets/states outside of KC? As you move a little farther south and east, there are markets where both yields and purchase prices are more favorable while still being in solid rental areas.

Also, some companies are offering rate buy-downs for investors, bringing 30-year fixed rates down to around 5.75%. That could make a significant difference in your cash flow projections. Happy to chat more if you want to explore some alternative markets and strategies—let me know what you're thinking!