Cash Flow AND Appreciation areas???

[Eric A.]

I'm considering investing out of state, and from what I've read here on BP, the best cash flow areas are in or around cities in the Midwest or South. Cities like Kansas City, Indianapolis, and Milwaukee frequently come up as great cash flow areas, but always come with the caveat that in 10 years the properties will be worth basically the same when adjusting for inflation. My understanding is that these areas have healthy and diverse economies, stable populations, and strong rental demand, all of which create high cap rates and above average rental returns. My question is, where can I find cash flow AND appreciation? Cities like NYC where I live are highly speculative in nature, meaning the only way to make money is through appreciation (there is no cash flow when cap rates are 3% and rent to purchase price ratios are below 0.3%. I know some people did really well in the last 6-7 years in several Texas cities (Austin/Dallas/Houston etc) where they enjoyed cash flow and then a sudden boom of appreciation. But I'm assuming I missed the boat on those cities at this point in the RE cycle. Has anyone done some good research and is willing to share predictions for which cities might be the next Austin/Dallas? Or can anyone make the case for a particular city as being strong for both cash flow and appreciation? Or am I searching for a unicorn?