Best Market for MFU to CashFlow and Appreciate

Member since 2019 · 144 posts · 46 votes

I have spent so much time researching and I am so anxious to make an offer and close on my first MFU. I am just having trouble finding the right location. My goal is to buy a MFU (2-4) doors and have it cash flow from the beginning and still have a decent appreciation. I am open to a SFH if it cash flowed too. I narrowed the cities down to Greater Metro Atlanta are and Dallas Metroplex. Atlanta does seem to have some deals that can work. Haven't had any luck with Dallas. Are there other markets I should consider? Budget under $600K and 20% down. TIA

2 Reply

257 views

Most Popular Reply

Greg R.

Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes

Not sure why you'd consider Dallas if you're looking for cash-flow. Don't assume that you're going to find a unicorn. Research property tax in TX.

4 Reply

See this reply in the discussion

76 Replies

Jump to latestLatest

Sort by

Aj Parikh
Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
4y
Cleveland, OH has great potential for Small multi family and Single Family homes and you can find it in an affordable price. I am based in Northern virginia and invest primarily in SFH and small multi family in Cleveland. Feel free to reach out.
2 Reply
Greg R.
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Not sure why you'd consider Dallas if you're looking for cash-flow. Don't assume that you're going to find a unicorn. Research property tax in TX.
4 Reply
Michael Dumler
Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
4y
@Michele Velazquez, I may have a duplex deal for you in Symrna, GA if interested. If this was 5-6 months ago I would be upfront and tell you that most 2-4 unit deals are being bought up by cash buyers well over asking, however, the competition has certainly dampened to a degree. Furthermore, while this may sound completely unprofessional/unspecific, just about every market 25-35 minutes out from ALT has seen crazy appreciation. I'll send you a pm with details.
1 Reply
Lucia Rushton
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
4y
@Michele Velazquez a suggestion if I may, wait until you pick your location before committing to a lender as my experience is that local is important.
While we personally work with a lot of out of state investors who allow us to be their boots on the ground and never see the property, but if you can take a trip to one or some of your top picks that can make it more real.
Regarding DFW small MF builds are in pockets around the Metroplex. So sometimes you have to be more flexible on location, schools, classification of property, taxes etc. PLUS you cannot always look at the current rents and make your decision based on how the landlord has managed the property. While this hovers near buying on proforma, with small MF you have chances to increase rents faster and improve the units more quickly than large MF. As always this is just my opinion. Best wishes
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Aj Parikh:

Cleveland, OH has great potential for Small multi family and Single Family homes and you can find it in an affordable price. I am based in Northern virginia and invest primarily in SFH and small multi family in Cleveland. Feel free to reach out.

What worried me about that market was the declining population. I wasn't sure I should still pursue because of that.
2 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Greg R.:

Not sure why you'd consider Dallas if you're looking for cash-flow. Don't assume that you're going to find a unicorn. Research property tax in TX.

Yes, I have learned that. No cash flow in Dallas. It came up on all of my research as a great city to invest in but I have learned that it is not for cash flow
0 Reply
Aj Parikh
Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
4y
Quote from @Michele Velazquez:

Quote from @Aj Parikh:

Cleveland, OH has great potential for Small multi family and Single Family homes and you can find it in an affordable price. I am based in Northern virginia and invest primarily in SFH and small multi family in Cleveland. Feel free to reach out.

What worried me about that market was the declining population. I wasn't sure I should still pursue because of that.

Properties are still appreciating and there is a lot of tenant demand in the area. We recently closed on a 6 unit and 4 plex to add to our portfolio so I am still pursuing real estate in this area.
1 Reply
Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
4y
Quote from @Michele Velazquez:

I have spent so much time researching and I am so anxious to make an offer and close on my first MFU. I am just having trouble finding the right location. My goal is to buy a MFU (2-4) doors and have it cash flow from the beginning and still have a decent appreciation. I am open to a SFH if it cash flowed too. I narrowed the cities down to Greater Metro Atlanta are and Dallas Metroplex. Atlanta does seem to have some deals that can work. Haven't had any luck with Dallas. Are there other markets I should consider? Budget under $600K and 20% down. TIA
You should consider look into Ohio, it has got good cashflow potential with appreciation happening as well, there are plenty of MFU that you can find at an affordable cost especially here in Cleveland/Columbus. The price to rent ratio makes for great investments. Not to mention our appreciation has been 8% higher than the US national average, because of the high demand for affordable housing.

-Columbus, great for appreciation, pp is a bit higher around $220k for multifamily https://learn.roofstock.com/blog/columbus-oh-real-estate-market

-Cleveland, has alot of cashflow potential, average multiform around $140k. https://learn.roofstock.com/blog/cleveland-real-estate-market

Steven
2 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
4y
@Michele Velazquez
do you own other rentals or will this be your first?
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Nicholas L.:

@Michele Velazquez
do you own other rentals or will this be your first?

first. I am trying desperately to get something done but just not getting anywhere
0 Reply
Ak Gandhi
Member since 2022 · 7 posts · 1 vote
4y
I am in same boat, looking for MF, if it cash flows from beginning the best. Did you look at FL and AZ? what criterion you used to narrow down to Metro Atlanta and Dallas?
1 Reply
Matthew McKee
Real Estate Coach · Boise, ID · Member since 2022 · 177 posts · 285 votes
4y
I’m biased to my market but Boise, ID has been beating the national average on appreciation. Boise market is very soft right now due to psychological whiplash. Cashflow right now is fair but there are contributing factors that would suggest an uptick in cashflow over the next 3-5 years.
-micron(local tech company) is adding 15k jobs over the next 5 years
-meta(Facebook) is moving outside of boise because of low energy cost and taxes.
-California covid tenant protection mandates were turned off months ago and the evictions are reaching the end of their court hearings. Possible mass exodus 2.0 but is purely speculation.

It's good to reach out and get others perspectives but don't get caught in analysis paralysis, your first deal doesn't have to be a homerun. You can also pad cashflow buy getting a STR and giving it over to a repeatable property management company.

speaking of property management(PM), even if you don’t plan on using a PM, which I don’t suggest as your first out of state investment. It’s not a terrible idea to run your numbers with budgeting in a PM. That way you set yourself up for success in the chance that you don’t feel like managing the property yourself after getting started.

I know I threw a lot at you biggest takeaway is fail soon, fail often, fail forward.
3 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
4y
@Michele Velazquez
I'd look for a market within driving distance.
Have you looked at any properties or made any offers or are you still trying to choose a market?
0 Reply
Eric GiovannucciBusiness Member
Investor · Boise, ID · Member since 2014 · 172 posts · 99 votes
4y
Quote from @Michele Velazquez:

I have spent so much time researching and I am so anxious to make an offer and close on my first MFU. I am just having trouble finding the right location. My goal is to buy a MFU (2-4) doors and have it cash flow from the beginning and still have a decent appreciation. I am open to a SFH if it cash flowed too. I narrowed the cities down to Greater Metro Atlanta are and Dallas Metroplex. Atlanta does seem to have some deals that can work. Haven't had any luck with Dallas. Are there other markets I should consider? Budget under $600K and 20% down. TIA
Anchorage, Alaska- Cash flow on LTR/STR is fantastic and a hidden gem.
Submarkets to Boise- Nampa/Caldwell is great. But, not terrific unless you build.

[email protected]
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
4y
@Michele Velazquez what is it about Dallas and Atlanta that you like? They are both strong markets but they don't cash flow particularly well. Prices have gotten pretty high in both markets and Dallas has some of the highest property taxes and insurance rates in the country. There are better cash flow markets that have good appreciation also in my opinion. Personally, I like Kansas City, Cleveland and the Quad Cities. I'd recommend adding them to your radar.
0 Reply
Scott Sklare
Real Estate Broker · Beloit, WI · Member since 2015 · 234 posts · 60 votes
4y
Quote from @Michele Velazquez:

I have spent so much time researching and I am so anxious to make an offer and close on my first MFU. I am just having trouble finding the right location. My goal is to buy a MFU (2-4) doors and have it cash flow from the beginning and still have a decent appreciation. I am open to a SFH if it cash flowed too. I narrowed the cities down to Greater Metro Atlanta are and Dallas Metroplex. Atlanta does seem to have some deals that can work. Haven't had any luck with Dallas. Are there other markets I should consider? Budget under $600K and 20% down. TIA

Hello Michele, I can show you multiple SFH or MFH deals that will cash flow in south-central Wisconsin. Great market to invest in.
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Matthew McKee:

I’m biased to my market but Boise, ID has been beating the national average on appreciation. Boise market is very soft right now due to psychological whiplash. Cashflow right now is fair but there are contributing factors that would suggest an uptick in cashflow over the next 3-5 years.
-micron(local tech company) is adding 15k jobs over the next 5 years
-meta(Facebook) is moving outside of boise because of low energy cost and taxes.
-California covid tenant protection mandates were turned off months ago and the evictions are reaching the end of their court hearings. Possible mass exodus 2.0 but is purely speculation.

It's good to reach out and get others perspectives but don't get caught in analysis paralysis, your first deal doesn't have to be a homerun. You can also pad cashflow buy getting a STR and giving it over to a repeatable property management company.

speaking of property management(PM), even if you don’t plan on using a PM, which I don’t suggest as your first out of state investment. It’s not a terrible idea to run your numbers with budgeting in a PM. That way you set yourself up for success in the chance that you don’t feel like managing the property yourself after getting started.

I know I threw a lot at you biggest takeaway is fail soon, fail often, fail forward.

Hi there,
I did look into Boise but it all seemed so pricey! I didn't see anything that will cash flow but will keep looking. You don't recommend I use a PM on my first out of state property? Can you expand on that? Curious about your reasoning and eager to hear it.
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Nicholas L.:

@Michele Velazquez
I'd look for a market within driving distance.
Have you looked at any properties or made any offers or are you still trying to choose a market?

I live in So Cal, not an option for me. I have made some offers in Atlanta! Looking for other areas too
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Mike D'Arrigo:

@Michele Velazquez what is it about Dallas and Atlanta that you like? They are both strong markets but they don't cash flow particularly well. Prices have gotten pretty high in both markets and Dallas has some of the highest property taxes and insurance rates in the country. There are better cash flow markets that have good appreciation also in my opinion. Personally, I like Kansas City, Cleveland and the Quad Cities. I'd recommend adding them to your radar.

I will check those out. I was scared of Cleveland due to the declining population but everyone keeps saying it!
0 Reply
Michele Velazquez
OP
Member since 2019 · 144 posts · 46 votes
4y
Quote from @Mike D'Arrigo:

@Michele Velazquez what is it about Dallas and Atlanta that you like? They are both strong markets but they don't cash flow particularly well. Prices have gotten pretty high in both markets and Dallas has some of the highest property taxes and insurance rates in the country. There are better cash flow markets that have good appreciation also in my opinion. Personally, I like Kansas City, Cleveland and the Quad Cities. I'd recommend adding them to your radar.

I am finding quite a few properties in the Greater Metro ATL area that cash flow. And that's why I like it. Atlanta is growing so fast. Dallas is a bust for sure lol I will look at these areas!
0 Reply
Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
4y
Quote from @Michele Velazquez:

Quote from @Mike D'Arrigo:

@Michele Velazquez what is it about Dallas and Atlanta that you like? They are both strong markets but they don't cash flow particularly well. Prices have gotten pretty high in both markets and Dallas has some of the highest property taxes and insurance rates in the country. There are better cash flow markets that have good appreciation also in my opinion. Personally, I like Kansas City, Cleveland and the Quad Cities. I'd recommend adding them to your radar.

I will check those out. I was scared of Cleveland due to the declining population but everyone keeps saying it!
I totally get that. I'm usually one of the first to say you need to be in markets with growing populations but you can get great returns in Cleveland. You just have to be in the right areas. I'd be happy to share my insights and experience if you'd like.
1 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
4y
Is anyone going to provide any cautionary info whatsoever on someone's very first investment being a random small multi in a market like Cleveland? Or is that now a risk free slam dunk - just like an FDIC insured savings account?
2 Reply
Matthew McKee
Real Estate Coach · Boise, ID · Member since 2022 · 177 posts · 285 votes
4y
Quote from @Michele Velazquez:

Quote from @Matthew McKee:

I’m biased to my market but Boise, ID has been beating the national average on appreciation. Boise market is very soft right now due to psychological whiplash. Cashflow right now is fair but there are contributing factors that would suggest an uptick in cashflow over the next 3-5 years.
-micron(local tech company) is adding 15k jobs over the next 5 years
-meta(Facebook) is moving outside of boise because of low energy cost and taxes.
-California covid tenant protection mandates were turned off months ago and the evictions are reaching the end of their court hearings. Possible mass exodus 2.0 but is purely speculation.

It's good to reach out and get others perspectives but don't get caught in analysis paralysis, your first deal doesn't have to be a homerun. You can also pad cashflow buy getting a STR and giving it over to a repeatable property management company.

speaking of property management(PM), even if you don’t plan on using a PM, which I don’t suggest as your first out of state investment. It’s not a terrible idea to run your numbers with budgeting in a PM. That way you set yourself up for success in the chance that you don’t feel like managing the property yourself after getting started.

I know I threw a lot at you biggest takeaway is fail soon, fail often, fail forward.

Hi there,
I did look into Boise but it all seemed so pricey! I didn't see anything that will cash flow but will keep looking. You don't recommend I use a PM on my first out of state property? Can you expand on that? Curious about your reasoning and eager to hear it.
It is a pricey market to get into but the rents are rising and house costs are lowering. I absolutely recommend a PM, sorry if that wasn’t clear.
1 Reply
Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
4y
@Michele Velazquez
I recommend you consider Houston, TX!

The cash-on-cash return and appreciation are steady.

You should select a market that will meet your investment goals.

A local Investor-Agent can help shorten your learning curve and save you a lot of headaches as they tend to understand the market better.

All the best!
[email protected]832-776-9582 Podcast Guest on Show #469
NETWORTH BUILDERS5236 Reviews
Website View Page
0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
4y
Killeen Texas, this is where I invest
1 Reply

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