Best Cash Flow Market?

With Real Estate prices being down in a lot of
the country I wanted to ask other investors
where is the Best City to buy cash flow
properties that will rent well in good areas
and have future for appreciation when things
turn around.

Please be as specific as possible and give
details. I am sure there are others like
me who want to buy some cash flow
properties this month, IF we could
find the best deals?

Kinda hard to answer since most people know the city that they’re investing in and not every other city in America to compare. So that being said the best city to invest in is the one you’re in. It’s certainly the most convenient.

I’ve wondered this myself many times and spent time googling it… but bottom line every market has people who overextended themselves or hate being a landlord and need to get out from under property- go on Craigslist for your area and search for “no money down” “assumable mortgage” “100% financing” “owner financing” and find someone who’ll sell their property at a gross rent multiplier of less then 5 or 6 or look for a debt coverage ratio of 1.5+ and you’ll have your positive cash flow even if you’re highly leveraged!

Mike, I understand what you are saying and I feel you. A more specific question is What kind of Cash flow deals are you doing in Your Market today?

Note: I currently own and buy good rental properties all over the USA - so this is why I want to learn all I can about other markets to decide where I should pull the trigger next. :guns

This topic has come up many times.
The bottom line for new investors is to stay close to home and manage your own properties.
Now I have heard all the arguments including “I wouldn’t do my own dental work, why should I manage my own properties.” To this I would say, if you CAN get someone else to effectively manage out of area properties, go ahead, but I believe that some of the subtleties of managing rental property could be overlooked when one turns the entire process over to a third party. Dentists need much more rigorous training, and stand to lose their license and livelihood. Now, if the property manager is competent and honest, then they will do a good job I am sure, but not the same job as an independent rental owner. When a window breaks or the water heater needs service, a small rental owner can save expenses by fixing these things instead of farming them out. The property management companies charge monthly fees and other fees. If a person has a war chest of money and can afford to farm these things out, so be it, but I believe that having at least 5 years of experience managing one’s own rental property will lead to improved competence and judgment when directing an out of area property management company.
My second choice would be areas where the investor has family or trusted business partners, as first hand oversight is difficult to beat when it comes to investing in real estate. I have watched investors pay low prices for new houses in good neighborhoods, only to watch their properties sit vacant for 6 months on end. Who’s fault? Anyone’s guess… could be the market, could be the property management company is overwhelmed or inept, could be that the absentee investor doesn’t know what he’s doing. When investors say things like “My (friend, brother, brother in law, business partner…) lives in city X, they seem to fare a lot better as absentee owners.
Wallace, it would be great if you could share some of the strategies that you use to own good rental properties all over the USA, particularly with regard to income to expense ratios and techniques for finding property management companies, dealing with repairs and maintenance and handling vacancies.

I agree, it would be interesting to hear some of these strategies as well.

I’m thinking that more people might be staying closer to home with the decline in property prices. There are suddenly more places that cash flow.


The short answer is Northwest New York areas like Rochester, Syracuse, Oswego etc. There is no turn around necessary since these areas did not partake in the real estate boom. They just continued to chug along at an even rate of appreciation between 2 and 4%.

In those areas, because the boom market never effected the area, housing prices remained low, slow and steady. Income for the area is about the same as it is in any other city of similar size.

So what you end up with is property that will rent for around 2% of value.

A single family home with 3 beds and 1 bath will rent for approx. $600 t0 $800 per month and you can easily find SFHs that sell for between $35000 and $60,000.

The longer answer is to do some simple investigating. Check the average income figures for various MSAs in what ever part of the county you might be interested in. Multiply the mean income in that MSA by 25%. (The portion of total gross income that the average person will set aside for housing.

Then take that figure and devide by 12 to get the monthly allocation for housing and multiply that figure by 100 to get preferred max value you would want to pay for a rental property.

For example, in Rochester New York, the mean income is $48,000 per year.

$48000 x 25% IS $12000 PER YR DEVIDED BY 12 = $1000.00 PER MONTH FOR HOUSING. $1000.00 X 100 = $100,000 THE MAXIMUM PRICE YOU CAN PAY FOR A PROPERTY TO "BREAK EVEN.

Since you can find decent property in nice areas of the Rochester NY MSA under $50,000 all day long, cash flow in this area is a no brainer.

By the way, I do not live in that area, nor do I have any direct affiliations with realtors in that area, it is just one of the many areas that I have researched and purchased property in over the last few years.

Other MSAs that I have researched and purchased in over the last view years are Charlotte NC, Dallas Tx, and a few areas in Pennsylvania.


Is there a reason you don’t just buy more properties in a market where you’ve already established yourself? There is obviously a reason you bought where you did in the first place. Are you trying to find that golden egg in the next hot market for appreciation or do you just want to be able to say you own properties all over the US? Not throwing stones here - just wondering. Each time you enter a new market, you have to set up a new team of people you trust - as I’m sure you already know.


I’m not sure to whom your question was directed, but if it was me, my philosiphy has always been that one shoud live where you want and invest where it’s best. I invest in some cities for cash flow and others for appreciation. If I can get both in the same city great. If not, I invest where my need gets filled. As far as teams go, All I need in a good realtor and a good manager.

My home state New Jersey sucks for cashflow and appreciation is negative right now. Some areas of the country are buyers markets and others, even within the same MSA sre sellers markets. I try to choose the market based on certain criteria. If I choose properly, I make money and so where it is specifically doen’s really matter.



I was wondering what Wallace’s take was on that since he started the thread, but it’s always nice to hear other points of view. I guess so far I haven’t concerned myself very much with appreciation. I look at that as icing on the cake. If our properties can take care of themselves financially and our renters pay them off in 10-12 yrs, we get a pretty good return on the 15% we put into them originally. I like Bluemoon’s point about living where the cost of living is low so you can live well on less money.