@Matt Brunson you need a market with strong demand from flippers and retail buyers.

We have a strong market and have for years.

Usually I look for a value add like turning a half bathroom to a full, or adding an additional bedroom, but the comps were strong and I knew by cleaning the home up I could easily find the value.

@Agyei Axum i have been renting by the room for the last 7 years. that is actually all that i do. i would strongly suggest doing that in your case to boost cash flow in your expensive market. i would find comparables in order to price effectively.

Feeding from the Question2.. how do you know if a city is a strong rental market?

My goal was to buy single family homes in distressed properties ( short sales, or NOD leads by calling home owners and seeing if they want to sell before they go into foreclosure)  in a growing population area with strong job growth and buy, add value , and rent them out for tiny bits of cashflow and wait for appreciation. 2 main questions I have at the moment. 1) How did you pick your market to buy your first investment? 

You need to have a really strong operating agreement.

All was not rosy though, as the property did not cash flow even with the strong rent.

The property didn't cash flow even with strong rent.

Deals seem to be hard to find so i worry I can't find more places to equal that cash flow but fear when we try to sell, the market won't be as strong.