Weigh In - Best Cities for Cashflow?

[Leonard L.]

I have a fair number of units in Inland Empire (So Cal) so I figure I have enough exposure to communities with excellent appreciation potential. I also have pretty good cash flow from them, entirely due to good fortune on acquisition timing.

But as everyone knows, finding deals with good cash flow is pretty difficult in California right now, so I have started to consider investing out of state for the first time. I am looking to place about $500k (maybe $1M leveraged) for long term cash flow, although some appreciation potential would be good too. I do this full time, so not adverse to flying somewhere and driving around.

I see many mentions of Memphis. And I think it is Brandon on the podcasts who is always mentioning Detroit.

Weigh in, guys/gals -- where should I look for best cash flow?

[Curt Davis]

@Leonard L.

Memphis and Atlanta are some great cities for cash flow only if you purchase them right. Understand that in Memphis for example you could get a home for $50,000 that rents for $700-$800 depending on who you buy from and the cash flow will look great but.... I fell that in the long run you will find it will be a cash flow drain, possibly negative as its more a lower income higher crime area.

Though cash flow positive is the goal you can still get positive cash flow if you purchase in the $70k or higher range and you will be in better areas, higher rents which statistically bring better tenants.

Other markets like Houston and Dallas are hot right now but their price points are higher so you need to figure out what your looking to spend.

If you want to buy super cheap junk you can get that in Detroit and you can also get it in Memphis, you just have to find the right supplier to get you those low quality investments. Know the market you intend to buy in before you pull the trigger. Also, I would suggest buying from a turnkey provider if your buying long distance. You need to have a relationship with someone who will be around. Do your homework first. Good luck.