What are the best areas and property types to invest in?

The US is a huge and diverse market, and there are a wide range of locations and property types that would make solid long-term investments.

I invest in multiple US states, but I apply strict rules to them all. Whether I’m wholesaling, flipping, or holding, the properties I purchase always meet the following criteria:

1. - Price: at least 20% below median home prices in that county
2. - Location: low-density suburban areas that are at least 50% owner occupied
3. - Construction: concrete block
4. - Year: 1970 or newer
5. - Type: single-family homes or multi-family homes with 2–4 units

Homes that tick these boxes are what I call Goldilocks properties—they are neither too expensive nor too cheap. By adhering to these criteria, you can (a) avoid the excessive repair and tenant management issues associated with lower-income areas, and (b) avoid the lower returns and more sensitive house prices in the higher-income areas.

If you wish to own properties that will naturally have the highest rental and resale demand, then the place to position yourself is slightly below the median. Whether the economy goes up, down or sideways, there will always be demand for properties in this category.

Between 2015 and 2020, I invested in nothing but affordable single-family homes in lower-middle-class areas. It wasn’t the sexiest part of the market, but it was steady and profitable. It also represents a formula that can be replicated in many towns and cities throughout the country.

Real estate looks a lot more complicated from the outside than it does from the inside. In fact, it is the only industry I’m aware of where you can become wealthy and financially free without being blessed with a high IQ or a freakish work ethic.

In many ways, getting past the first 1–2 rentals is the hardest part of all. After that, it gets much easier. All you need to do is maintain a healthy attitude to learning, taking action and finding ways to network with like-minded people.