My cash flow dilemna

[Fred Stevenson]

So it appears to me in my local market and also at the macro level around the country that properties that cash flow nicely i.e. >1% rule are also in markets or neighborhoods that don't seem to appreciate that much.  I have a full time day job in which I make a nice income. I'm also a ways away from retirement. So as i diversify into real estate I'd rather own properties that have a greater chance of appreciation over time with lower cap rates versus high cash flowing properties that are in less desirable neigjborhoods or cities  that owner occupants are leaving.  

For example, I'm looking at a house in Baton Rouge (which is my home) in Sherwood Forest Neighborhood. It is a 4bdr 2.5 bath on the market for 156k. It is newly renovated and won't need any rehab. It will rent for 1800.  This home is going for 59per square foot while others are comping at 67per square foot. Sounds like a great cash flowing property right with a little bit of equity built in? The problem is that owner occupants are selling their homes like crazy in this neighborhood and it is becoming a "rental" neighborhood. So in six or seven years my fear is that homes in the neighborhood will be selling for 50per sq ft. When I look at the "hot neighborhoods" that are in the path of growth it is much more difficult to buy properties at a discount or find properties cash flowing above 1% rule.

 I find this same type of scenario to be try at the macro level.  For example,  I hear great things about Orlando in terms of the economy and the future, but the properties I've looked at have cap rates <4%.  What is a passive investor to do who prefers equity growth over cashflow without taking a bath?  Any recommendations on strategies or cities that fit what I'm lookin for would be greatly appreciated.  (I am willing to buy turnkey, but I find they are often focused on cashflow versus equity growth). Thanks BP community. 

[Joe Villeneuve]

Originally posted by @Fred Stevenson:

Originally posted by @Joe Villeneuve:

So?!  If you're buying for cash flow, and you are getting cash flow, what is the problem?

Because I would rather buy for appreciation with reduced cash flow. My day job gives me the cash flow I and capital I need. In 15 years I think I'll be better off if I pursued an equity growth strategy over cash flow. However, I don't want to buy anything that doesn't have positive cash flow either.  My point is hat it has been tough to find properties that lean toward the appreciation strategy at have positive cash flow and for sale at a discount. 

 15 years ago the economy was pretty good.  7 years later (8 years ago), the economy took a dump...right on all those investors that banked on appreciation.  In 15 years, will the economy be appreciated...or ready to make another "adjustment".  Can you predict that?  Can you predict it better than those who thought they could predict it for 2007/2008?

I prefer to be an investor, and not a speculator.  I prefer to take control over my investments, instead of letting control be in the hands of others.  I prefer cash flow...any day, every day.