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Updated over 6 years ago,
Investing Strategies in Mid-Tier Cities (like Atlanta, Charlotte)
Looking to hear strategies of people buying in mid-tier cities where rental rates are high, however real estate pricing is even higher, meaning the mortgage payments eat up a lot of the cash flow. I'm an Atlanta native and have a 5/3 single family property just inside the perimeter I was able to score for 250K in decent shape, only minor repairs needed. My basic strategy is to buy these houses using primary residence financing and rent out the bedrooms to offset all expenses, even swing a profit (house hacking), until a year passes, move to the next house and repeat, keeping the other houses as rentals.
However, if you move more towards downtown, prices for larger single family homes with a decent number of bed/bathrooms (4/3 is my target or higher) are very expensive and easily hit 500K to over a million. With those prices, my strategy can't be sustainable downtown, and with appreciating markets, I'm not sure it will remain feasible on the edges of the perimeter either.
What are some strategies for building up a cash-flowing portfolio in markets where housing prices are too high to purchase and rent out?
As a side note, I'm considering looking at multifamily (up to quads to keep financing non-commercial) which may fetch higher rents, however, these prices are quite high as well.