Out of state investing = paralysis by analysis

[David Olson]

Hello BP,

My Question: Which cities are prime for cash flowing 1-4 unit properties and what metrics specifically do you use and from what site? Census Bureau? REIT reports? etc.  

Anyways, I'm working on selecting 2 cities to heavily pursue for out of state rentals. Once selected I'll be booking my flights and spending some time in each city hopefully meeting some quality people that I can work with and bring value too. I have reserves that I am ready to deploy but the data I am collecting from PWC, and Real Wealth Network is conflicting with some cities I hear others say they love to invest in. So I started to read through this column written by Real Wealth Network. https://www.realwealthnetwork.com/learn/best-places-to-buy-rental-property

As I was reading through the article I couldn't understand why anyone would invest in cities like Pittsburgh, Cleveland, Detroit, Cincinnati, St. Louis, etc. Mainly because they claim that those cities have a projected 5yr equity growth below the national avg, 6yr population growth below the national avg, and a 1yr job growth below the national avg. Maybe the data only pulls from the city limits and not the surrounding areas?

With that being said, my main goal right now is cash flow, cash flow, cash flow so equity growth is not the leading driver in my decision but a nice to have.  I had a good friend tell me to invest for appreciation instead but that's another argument for another day.

Other cities I am considering are Birmingham,Huntsville, Indianapolis, Boise and a few others. Really trying to narrow down my search to ONLY 2 cities but the more I read the greater my paralysis by analysis becomes.  Here is a table I have put together from some data collected by PWC. The Rent/ Cost of Ownership is the market apartment rent divided by the median mortgage payment, including estimated taxes, insurance, and maintenance.

[Bala A.]

Not to say that data is bad,

But if anyone read a data point of New York in 1980s - no one would have touched it with a 10 feet pole.

Highest crime and murder capital of the world.

Look at the Prices move from 50K to 1.5 Million in just 20+years.

Statistics cannot predict the Gentrification and what City is about to take off based on past predictions or current readings.

There are variables that cannot be measured.