Your ideas about the best Buy & Hold locations in the U.S.

[Guyoz Golan]

Hi all,

Me and my partner are looking to start investing in the U.S soon, and given that we are half a planet away, we might as well choose a good location to start with.

We are looking for Multi Family units in grade 'A' areas, where we could continue investing as we educate ourselves on that particular market. We are planning to visit the place as much as needed and be as 'hands on' as we can possibly be, probably with a local partnership in place.

Which city and areas would you focus on for good rental yield and cashflow?

Thanks for any help!

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[Wendell De Guzman]

Originally posted by @Guyoz Golan:

Hi all,

Me and my partner are looking to start investing in the U.S soon, and given that we are half a planet away, we might as well choose a good location to start with.

We are looking for Multi Family units in grade 'A' areas, where we could continue investing as we educate ourselves on that particular market. We are planning to visit the place as much as needed and be as 'hands on' as we can possibly be, probably with a local partnership in place.

Which city and areas would you focus on for good rental yield and cashflow?

Thanks for any help!

 Guyoz, 

With your budget, I would suggest being open to B & C areas. A's generally don't cashflow as you tend to get better yields in lower grade areas. However, having said that, I would advice you NOT to go into D and F areas. Here's my definition of what A, B, C, D and F areas are:

To find out information about neighborhoods (and learn their appreciation rates, crime rate, school district, you can use http://neighborhoodscout.com)

Also, I strongly suggest you partner with on-the-ground partners who have something to lose if the deal does not perform. One idea is to partner with people who can qualify for a mortgage on the property and you put up the cash. $50K as 25% downpayment means you can buy a $200K building. You can get a decent 2-4 unit apartment building in a lot of good cities in America at that price.

I don't recommend Chicago for cashflow but I love it for short-term appreciation play (hence, I do rent to own and fix-n-flips). High property taxes and its corrupt politicians (who wants property taxes to be higher not lower) will eat into your cashflow.

I recommend Cincinnati, Ohio (actually I have nothing to gain by recommending this city - I just know the city). The city has several Fortune 50 companies (P&G, GE, Kroger, Johnson & Johnson) so you have solid employment base. Housing prices have appreciated but not at crazy prices and hence, house prices remain affordable. The combination of solid employment base and affordable housing gives you good cashflow and high cash-on-cash return. 

Lastly, here's another reason why you should partner with someone who can qualify for an investment loan. You can do the BRRRR strategy (Buy-Rehab-Rent-Refinance-Repeat) strategy. @Andrew Syrios wrote a blog about this here on BP (he used BRRRR on 14 properties - crazy man!). By doing BRRRR, you can buy 5 properties with $50K - provided you get an on-the-ground partner who can find heavily discounted properties that you can create value in and cash out to fund more acquisitions.