Explore Potential Funding OptionsPrivate Money Lenders (PMLs): Reach out to private individuals looking to invest in real estate.

Detroit offers solid cash flow potential, a relatively low barrier to entry, and the market fundamentals are improving with a growing population and significant investments in the city.Since you’re based in upstate NY, Detroit is also a quick and easy flight, making it easier to visit and get a feel for the market if you’re considering out-of-state investing.

Then do a thorough research on tenant applicants (note: leaving this to a PM may be hazardous to your financial health) and choose the one that is most “stable” with the best potential for long term tenancy.This advice is contrary to maximization of rental income, but IMO will reduce expenses of tenant turnover, property damage, property management fees so much that the difference in bottom line income will be quite small.  

My concern with declining values, increased inventory and a weaker economy would lower rental income and could potentially put me into a negative cash flow situation.

You may want to share you analysis with a few banks and/or property managers as they will typically weigh in on your assumptions if they are potentially interested in working with you. 

If not for you and you prefer the traditional route, I would explore potential "up and coming" markets such as Acworth, Cartersville, and Douglasville, where the price-to-rent ratio is a little more favorable, and growth is apparent.

Since you haven't received the funds yet, you cannot claim any loss for 2024.If you receive the 10% return of principal in 2025 and the investment is officially terminated or sold at that time, you could potentially claim a capital loss for the remaining 90% on your 2025 taxes.

Also, be sure to factor in maintenance and potential CapEx, especially for older properties.

Flipping, renting, or sitting tight for long-term appreciation-there is potential for anyone willing to do the work.

Hey Makani, you should check out DSCR loans, which are primarily for investment properties and focus on the property’s income potential rather than your personal income.