We want to purchase a property to begin building our rental portfolio but are unsure of the best approach.We live in Sonoma County, California, and I work in Healdsburg.

I bought my first rental in June of 2024 and have had a tenant that has been making late payments since day 1.

Phoenix contains a rare combination of elements that have created an outstanding market for distressed property investments, including the following:Cost Savings: Distressed properties are sold below their market value and enable investors to take hold of properties at a trifle compared to traditionally listed properties.Strong Market Fundamentals: Being among the fastest-growing cities in the country, Phoenix ensures a high demand in housing and rentals, hence good potential for resale or income from rentals.Value Creation Opportunities: Most distressed properties need renovations; thus, such situations present opportunities for investors to increase equity by adding value.Population and Economic Growth: Phoenix remains among those cities in the country which are attracting more and more residents and business; therefore, this presents good, long-term appreciation possibilities of property appreciation and income creation.Challenges to ConsiderWhile the rewards can be great, distressed property investment is not without its challenges.

Rent by room / house hacking / co-living should deliver significantly higher cash flow than a traditional rental. 

Maybe that allows you to afford more rentals in the future too. 

You must have the intent to hold the relinquished property and the replacement property for rental, investment or business use. 

The property is cash flowing $10-15k every month and has been an absolute juggernaut as a short term rental.

Lau, generally if you are financing with a commercial lender- we lend for business purpose only and a rental property would fall under that category.

I primarily invest in buy and holds, but I do a little bit of everything including fix and flips, airbnb's, mid-term rentals, and wholesaling.

Quote from @Nicholas McCormick: Howdy-Does anyone have any experience with short term rentals in the Bloomington, Indiana area?