Quote from @Jakub Rauch: I’m about to purchase an LTR but have not decided on the exact state yet.

A lot of MTR owners are doing this strategy for that exact reason. 

With current rates - maybe 185k, if it's in great condition.

Start by checking platforms like Rentometer, Zillow, and Craigslist for similar SFHs within a few-mile radius, even if they're not in your exact target neighborhood.

I just heard about these on the podcast but not with these exact guidelines on how to categorize them.

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.

He said no refund , the refund is conditional.

I have two properties now that I've improved slowly over time, and cash flow well, but it wasn't exactly a straight line of success. 

cash flow really kicks in after 10+ years of ownership, in my opinion.here is an epic, thoughtful thread about different markets and the choices California investors have - lots of different perspectives and experiences in one thread, including successful investors in different states:Why markets with low appreciation grow your net worth twice as fasthere's someone asking the exact same question as you:Looking to invest out of state.

Lower LTV** improves your debt-to-income for future acquisitionsExample from a BP member I helped last week:- Denver rental purchased January 2023: $425,000- Current value: $455,000 (7% appreciation)- Current LTV: 81.3%- Extra payment needed: $7,400- Monthly PMI eliminated: $195- Cash-on-cash return improvement: 2.8 percentage pointsThe Step-by-Step ProcessWeek 1: Analysis- Pull your current mortgage balance- Get realistic property valuation (not Zillow - use recent sold comps)- Calculate exact LTV- Determine gap to 80%Week 2: Decision- Compare ROI of PMI removal vs other investments- Check if you have the liquidity- Consider tax implicationsWeek 3-4: Execution- Contact loan servicer IN WRITING- Request PMI removal requirements- Make lump sum payment if needed- Order appraisal if required ($400-600)Week 5-8: Follow-up- Weekly check-ins with servicer- Confirm PMI removal on statement- Redirect savings to next investmentImportant Reminders for September 20251.