Best states to invest for small multi family units

[Kevin Kong]

Hello BP Fam,

I looked through the search bar and was looking for the subject on this matter, but have not been successful on something current to date and even on the same topic. My question is for you big brothers and big sisters out there, where is a good place invest for multi family units outside of Chicago? I'm looking to invest in smaller multi family units (4 units or less) with great cash flow areas. As most people know Chicago is great for visiting and having fun, but if you're a home owner the taxes have you running. The rents here are high but compared to the cost for places with smaller fry such as myself you're not going to be able to get anywhere near 1%. I am looking for long term hold. By long term I hope to have my daughter interested in the game of real estate and take over the family business. I have heard places like Milwaukee,WI and Phoenix, AR are hot markets for cash flow and I also heard that Boise, ID randomly is booming as well. From personal experience where would you all recommend me to look to expand my portfolio? My price range is around 300-350k with either FHA (3.5% down) or with conventional (5% down) for worse looking places. I do prefer to remodel and renovate myself to save money and use that to get more property. I wouldn't also mind "living" there for a year so i may get a 95% refi so I may use that money to get more places. Any recommendations of city, town and state is always welcome and I thank you in advance.

[Brock Mogensen]

Milwaukee area is a solid cash flow market.  Definitely completely different than a market like Phoenix.  Generally speaking, you'll be able to find lower priced deals with better cashflow in Milwaukee.  That being said the natural appreciation won't be as high.  A market like Phoenix may be more expensive (less immediate cashflow) but provide better long-term natural appreciation.