Can rent it out easy for $1,000+/mo thanks to the strong rental demand of local economy.

Even with a strong profit from a single property it would take a ridiculously long time to save money for a down payment and cash reserve for a 2nd rental.

Fourth, education and safety has always been incredibly strong in Minnesota.

@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.