Typical Monthly Cash Flow / Best US Markets

[Larry Nielsen]

Hello Fellow Investors,

I am looking to acquire more long-term rental properties. I would like to ask the following:

1. Which markets (Cities, States, Counties) are producing the highest cash flow while keeping purchase prices under 100K? Considering a DSCR loan with around 20% down. (I know there are many variables but generally).

2. What are the typical monthly net cash flows you are seeing in these scenarios? Is $300 per month net post tax cash flow considered decent? (Again, I know it's preference and variables but generally and in your personal opinion with your experience).T

Thank you in advance for your input here.

[Marcus Auerbach]

$200/mo has been the long-standing average in Milwaukee, but with current rates you'll need to bring a bit more down payment.

However, stay above at or above median price. 100k does buy you a lot of headaches and future capex. The financial model does not work long-term. Your cash flow will look great on paper, but sooner or later the house will need a new everything, which is usually 50k-70k. 

You can kick down that can only so much, at some point you have to pay. I recently had a landlord at a workshop who owned and managed a portfolio of low end properties for over 30 years, he is basically broke and can't retire. He self-manages, is his own handyman and had to pull out the little equity he gained to pay for roofs and HVAC. 

You can play landlord for a few years and you'll learn a lot from doing that (especially hands-on) - but long term not a winning strategy.