How to get started with finding long-distance REI market?

[Lei Z.]

I am in the learning stage. I don’t know enough to be dangerous, yet. More likely in the stage of asking stupid questions. :D So, here it goes.

Long-distance investors, would you mind sharing your process of finding your target market?

I am extremely interested in long-distance REI, especially long-distance BRRRR. Did I miss something critically important from David Greene's book on how to get started finding a market? It feels like the super valuable content was more about analyzing/filtering the potentials, such as validating the information received from agents and property managers via internet searches. Is there a more efficient way of starting with a more sensible/practical list of potential markets? Or do I, for example, start with the cities I'm familiar with from past experiences? What if none of them work out? Should I be reading/following some statistics to make my "leads" more sustainable and viable?

Thank you!!

[Mike D'Arrigo]

@Lei Z. I wouldn't recommend looking at a city just because you're familiar with it. That can be a plus but it doesn't mean it's a good investment market. Start with clearly defining your objective and criteria and then look at markets that will fit that. If you're goal is long term cash flow then here are the key economic and demographic factors to look for:
1. Population growth
2. Job growth
3. Incomes
4. Labor participation rate
5. Modern/diverse economies
6.. Public/private development investment
7. Property tax/insurance rates
8. Landlord/tenant laws

If you're looking for solid cash flow Midwest cities like Indianapolis and Kansas City are good choices. If you're looking at investing out of state, I would caution you on the BRRRR strategy. It's hard for an inexperienced out of state investors to pull it off. That's not to say it can't be done but be aware of the downsides and risks.