Kansas City is a good cash flow market but we stay away from the low end asset class.

You can buy a smaller multifamily and use an asset based, commercial loan, where DTI is not a factor.

If all my money is pooled into one type of asset, in one or a few small towns, that's risky.

Have you given any thought to asset protection?

I have three main questions..1) I've read on BP that starting an LLC is only really a good choice if you are in a partnership situation, which we are, though my question is whether or not there may be better options for partnerships, other than starting an LLC.. 2) What is the best way to go about obtaining a mortgage in a partnership situation.

Jenny,Great question as there is indeed a lot of focus placed predominantly on cash flow that makes the returns associated with out of state appear to be the way to go.However, real estate returns are obtained from 4 areas: cash flow, appreciation, tax benefits & equity build up through amortization. 

Not my cup of tea, but Boston has a lot of great things going for it that in the long run I think you could make it work.If by multi-family though you mean a 5+ building that you're presumably going to look for in the Midwest or South...it's in its own bubble as a disturbingly large number of people who made bank in the last 10 years of the up market are shifting their focus to a larger scale asset and are purchasing these distressed properties which is driving cap rates down because people need a place just to park their cash. 

I think if we bring $175k, we should be able to obtain a ~$400k loan.

@Stephanie McKay - this will depend heavily on your situation.In general- an LLC will not have a tax impact... it is mainly an asset protection strategy. 

This is how you protect yourself and your asset.