Dave, remember that video you posted last year about how your rental purchases were based almost solely on price appreciation and how you personally believed that cash flow was not important? 🤕
Sure do! I think it was like 1.5 years ago but yes I do. I invest a lot to build equity! Cashflow is my second priority at this point in my career. I’d never buy a rental that does not offer at least a 4-5% COCR, but I look for deals where I can build equity through value add , it’s a faster way to build long term wealth IMO. This was particularly true in a low interest rate environment. I’ll focus more on cashflow as I get older. Just did a deal that’s heavy value add and won’t product good cashflow for 1-2 years but it’ll be a heater 🔥. It all depends on your goals, risk tolerance, etc. For me I always need some cashflow but IRR is the metric I really care about.
9. Rochester, New York 8. Little Rock, Arkansas 7. Milwaukee, Wisconsin 6. Dayton, Ohio 5. Philadelphia, Pennsylvania 4. Birmingham, Alabama 3. Cleveland, Ohio 2. Memphis, Tennessee 1. Baltimore, Maryland Good Rent to price ratios. Though be cautious... Some markets are decreasing in purchase price therefore potentially decreasing profitability.
The taxes in Ohio can be crippling, sometimes approaching $5,000 on a house worth $125k. It won't cash flow much if you're carrying a mortgage at today's rates ( we're pushing 8% for rental loans). Looking at you, Cleveland and Dayton.
Commercial real estate broker here. My specialty is 5+ unit multifamly in San Diego and West Palm Beach. Generally speaking you're going to have the best cash flow in the weakest appreciation markets and these are also tougher tenant profile. So, you haven to decide how you want to make money in this business. I understand RTP but my industry is driven mostly off GRM (gross rent multiplier), cap rates, cash on cash, IRR etc. I think RTP is a great way to get familiar with rent metrics, but long term I strongly suggest you all become more familiar with standard industry metrics for underwriting.
Property rights is #1 for me. If you own in LA, you may have an investment with declining equity that hasn't generated income since March 2020. Maryland will probably follow the lead of California, making Baltimore very risky!
@@coloradohomesalesinc Leland first and foremost, Wilma downtown, basically anywhere. I have my five in Leland (I specialise in this area as an EBA) and one in Ogden (another great area)
There’s a market I was looking at, duplex $65k, mortgage under 500 a month rent in that area could get about $800-$900 a unit crime is average, but I see the poverty rate is 27% and population is decreasing(its only 20k) The numbers make it tempting because one unit can more than cover mortgage and all expenses and the other can be straight cashflow, and as I ran numbers in a bunch of markets these were the best by far, nearly 2.8% rent to price ratio. I just don’t know if it would wise to enter a market with that level of population, that poverty rate, and in an area I don’t foresee growth as my first purchase.
Memphis Tennessee, Birmingham, Alabama, Baltimore, Maryland, had no median sales price posted Any tricks and tips you can give on how to analyze the other criteria you mentioned would be welcomed
I lived in Rochester for 56 years, I moved to Florida a year and half ago. I must say I was very surprised to hear Rochester on the list! Super interesting!!
METRO Detroit and Detroit proper are still seeing 1.3% - 1.9% ratio. So many individuals count this market out before even looking into it themselves. There are many great locations to invest in and there are more good areas than bad
@@chamixone Metro Detroit Locations: Warren, Roseville, Eastpointe, Centerline, Oak Park, Redford, Lincoln Park, Hazel Park, Harper Woods Detroit Proper Locations: Morning Side, East English Village, Midtown, Bagley, Mexican Town I am an investor in this market myself and work with investors all over the country to help find deals as well so feel free to reach out to me with any further questions
Any time your comparing rent to price, make sure everything else is the same. I bought a 16 unit in rural MN with 1%rtp that doesn't earn as much per door as .75% SFR in MO, because I have to pay snow plowing, water, and heating for the multifamily.😡
In theory, yes but do evictions favor the landlord or tenant? Are evicted tenants going to destroy the unit when the leave? These are the details one should be focusing on
Someone I talked to who rents near Baltimore said the house was destroyed when the tenants left. Not sure what happened but he was very upset that people can be so gross. He rented out properties for a while now so I guess it’s a hit and miss.
I've been investing in Baltimore for a while. The 1.86% is certainly not for most of the city. Good cash flow can come from the plenty of section 8 rent rates on cheap rowhomes. Gotta know your spots.
@Dave Meyer Hi Dave thank you for all the great data content! Can you please start including Greater Palm Springs/Coachella Valley area on your data. It is a large market of 500k+ full time residents and over 1M in season. You always post lists of data and it will have Riverside or San Diego but not the Desert region market. It would be greatly appreciated!!
@@baonguyennnnn It sure is! I own high cash-flow SFRs in Toledo, OH. Every month I need to take extraordinary methods to collect rent. It is never as simple as collecting a month's rent for a month's occupancy. There are always excuses. BUT, there is also always a late fee. Late fees alone add an extra month of cash flow every year. 13 months of rent per year, pretty awesome, right? But you have to work for it. If you're afraid of confrontation and you easily roll-over (that is, you'll fall for excuses and sob stories), then be prepared to get paid last and lose money. But if you're ready to fairly and forcefully uphold the business agreement, then you can make very nice cash-flow. Dealing with the City is an entirely additional and different issue. While not draconian and inane like New York or California (I will never own there), you'll have other issues to deal with. A lot of municipalities in OH and MI are passing lead abatement laws, and you need to make yourself aware of them. These laws can cost you a lot of money (1-3 years of free cash flow), and the penalties for non-compliance are stiff. Your only saving grace in these scenarios is that the city government that is enforcing the laws is typically filled with incompetent employees.
would love a deeper analysis on the baltimore market in 2023. I know from the numbers provided its a great cash flow city, but would like a overall market analysis on baltimore as a market. I like in md about an hour out an I have been intrigued by baltimore market but I know it really depends on where in baltimore city you invest.
All I have to say about Detroit is - be greedy when everyone else is fearful. ROI of 2% is achievable with the right house - not in the best or the worst neighborhoods. Section 8 is still paying more than regular rents.
Every city has good and bad locations. For example, I used to live in little rock. There are portions that are unsafe but that makes up about 10% of the entire city. 80-90% of the crime comes from 10% of the city. The other 90% is safe and rents well. You need to do research on certain neighborhoods. Other cities are exactly like this.. STL, Memphis, etc
@@prefontaine618 Exactly right. That information wasent given so the general public watching should know. Prices are right there for a reason. People should do their due diligence.
@@prefontaine618 What would be the best way to zero in on neighborhoods? I went through the list looking at the cities as a whole on populations, crime rate, job growth, poverty rate, etc. almost all of these had poor results for these fields as a city, what resource could I use to narrow down to neighborhoods. Im looking to break into my first market and I am struggling to find something im either comfortable with, or that has any type of cash flow.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
One of the best cash flow assets is a cell tower lease no matter what real estate market you are located. A cell tower lease if structured correctly can pay you passive income for decades and have significant upside value. 5G means up to one million new cell sites in the U.S.
Balt MD city has so much red tape. City favors tenants. Even if you evicts landlord still responsible for water bills. Example two yrs evict section 8 tenant. Housing authorities we able retrieve 14k back rents not including 10:29 Attorney’s fees, water bill, back rents, destroyed property. Not area we will continue invest😢
Thank you for the work you do and the information you are sharing. What do you think about buying with 0 cash and doing creative financing (private lenders)? Is that realistic in today market?
What is your opinion on having $500k in a high yield savings account, making $2000 a month or buying properties with the $500k and getting rental income
Let's do a quick simple math. In each one of those places. let's say 150K per house, 30K downpayment, that's 20 houses. Rent is 0.8% rule * 20 * 150K = $24000 per month. let's say you pay 80% expense. you still net 4800 per month. with appreciation of 5% per year and gaining equity, in 30 years you will get bout 13M. Plus the 4800 per month you generated over 30 years, that's about $14728000. That's about 198% ROI per year. Of course this is idea situation, it could go poopoo the other way.
Rent in the best school districts-where lots of white collar jobs/residents with white collar jobs-stay as far as possible away from high crime cities/homelessness/drug problems.
There is 1 thing that all these cities have in common that is not ok to say in our cancel culture society but you should avoid all of these markets like the black plague.
Dave, remember that video you posted last year about how your rental purchases were based almost solely on price appreciation and how you personally believed that cash flow was not important? 🤕
Sure do! I think it was like 1.5 years ago but yes I do. I invest a lot to build equity! Cashflow is my second priority at this point in my career. I’d never buy a rental that does not offer at least a 4-5% COCR, but I look for deals where I can build equity through value add , it’s a faster way to build long term wealth IMO. This was particularly true in a low interest rate environment. I’ll focus more on cashflow as I get older. Just did a deal that’s heavy value add and won’t product good cashflow for 1-2 years but it’ll be a heater 🔥. It all depends on your goals, risk tolerance, etc. For me I always need some cashflow but IRR is the metric I really care about.
9. Rochester, New York
8. Little Rock, Arkansas
7. Milwaukee, Wisconsin
6. Dayton, Ohio
5. Philadelphia, Pennsylvania
4. Birmingham, Alabama
3. Cleveland, Ohio
2. Memphis, Tennessee
1. Baltimore, Maryland
Good Rent to price ratios. Though be cautious... Some markets are decreasing in purchase price therefore potentially decreasing profitability.
Because I live here, I knew Philadelphia would be on this list!!!
Saint louis MO??
@@dontayball9150 I invest in STL. Great market for cash flow. Certain neighborhoods are safe and others are dangerous but just need to do research
@@prefontaine618 yea used to live Inna hood ik which areas are bad, but overall love da city man
The taxes in Ohio can be crippling, sometimes approaching $5,000 on a house worth $125k. It won't cash flow much if you're carrying a mortgage at today's rates ( we're pushing 8% for rental loans). Looking at you, Cleveland and Dayton.
Commercial real estate broker here. My specialty is 5+ unit multifamly in San Diego and West Palm Beach. Generally speaking you're going to have the best cash flow in the weakest appreciation markets and these are also tougher tenant profile. So, you haven to decide how you want to make money in this business. I understand RTP but my industry is driven mostly off GRM (gross rent multiplier), cap rates, cash on cash, IRR etc. I think RTP is a great way to get familiar with rent metrics, but long term I strongly suggest you all become more familiar with standard industry metrics for underwriting.
Exactly! You buy the theoretical cash flow in those rough neighborhoods and spend it fixing malicious damages of the evicted.
These are based on rent to price ratios... but tenant rights vs landlord rights and market appreciation is way more important to me!
Property rights is #1 for me. If you own in LA, you may have an investment with declining equity that hasn't generated income since March 2020. Maryland will probably follow the lead of California, making Baltimore very risky!
Wilmington NC is grossly overlooked. Even though 1% rule doesn’t apply here, it’s an excellent and very secure rental market.
I would love to get into Wilmington. Haven't found the right house though.
@@betterhomesnc2437 I’m an Exclusive Buyers Agent and an investor myself. Let me know if I can help you with anything.
What areas of Wilmington do you find to be good for rentals?
@@coloradohomesalesinc Leland first and foremost, Wilma downtown, basically anywhere. I have my five in Leland (I specialise in this area as an EBA) and one in Ogden (another great area)
@@coloradohomesalesinc btw, my son with his family is living in Loveland, CO and they love it.
“Cash flow tells the story of how a person handles money.” - Robert Kiyosaki
There’s a market I was looking at, duplex $65k, mortgage under 500 a month rent in that area could get about $800-$900 a unit crime is average, but I see the poverty rate is 27% and population is decreasing(its only 20k) The numbers make it tempting because one unit can more than cover mortgage and all expenses and the other can be straight cashflow, and as I ran numbers in a bunch of markets these were the best by far, nearly 2.8% rent to price ratio. I just don’t know if it would wise to enter a market with that level of population, that poverty rate, and in an area I don’t foresee growth as my first purchase.
Section 8 it if you can look beyond the stigmatism behind it.
Im proud to say i purchased 2 properties in '08 in one of the places mentioned in the list and my price to rent ratio is 2.55%, no complaints here!
Where?
Where?
Memphis Tennessee, Birmingham, Alabama, Baltimore, Maryland, had no median sales price posted
Any tricks and tips you can give on how to analyze the other criteria you mentioned would be welcomed
I lived in Rochester for 56 years, I moved to Florida a year and half ago. I must say I was very surprised to hear Rochester on the list! Super interesting!!
Ive been looking at Upstate NY for the past year. Rochester and Albany are top of my list. Property taxes arent great....But lots of deals.
4:59 Is where he starts. My gosh 🤦🏽
Just checked out some properties in Baltimore on Zillow. Looks like many of them barely hit the 1% rule... Am I missing something?
Can you please analyze the Reno, NV market? Thank you in advance
Great stuff as always Dave. How does the Lousiville, KY market look?
All that cash flow balanced out by terrible tenants. I learned the hard way
Can you analyze myrtle beach SC? Thanks
METRO Detroit and Detroit proper are still seeing 1.3% - 1.9% ratio. So many individuals count this market out before even looking into it themselves. There are many great locations to invest in and there are more good areas than bad
There are no good areas in Detroit.
@@nickyb-ff6me I appreciate your opinion but I would love to see the information and data behind that statement
What areas do you recommend?
@@chamixone Metro Detroit Locations:
Warren, Roseville, Eastpointe, Centerline, Oak Park, Redford, Lincoln Park, Hazel Park, Harper Woods
Detroit Proper Locations:
Morning Side, East English Village, Midtown, Bagley, Mexican Town
I am an investor in this market myself and work with investors all over the country to help find deals as well so feel free to reach out to me with any further questions
I am an investor in metro Detroit and am not seeing this high of a ratio, perhaps you found some micromarket to bank on
Could you please analyze Knoxville Tennessee
Any time your comparing rent to price, make sure everything else is the same. I bought a 16 unit in rural MN with 1%rtp that doesn't earn as much per door as .75% SFR in MO, because I have to pay snow plowing, water, and heating for the multifamily.😡
Your Capex and maintenance should in theory be lower than 16 SFH's though.
Hi Would you please guide me to buy my second home SFU.. not multi
In theory, yes but do evictions favor the landlord or tenant? Are evicted tenants going to destroy the unit when the leave? These are the details one should be focusing on
Someone I talked to who rents near Baltimore said the house was destroyed when the tenants left. Not sure what happened but he was very upset that people can be so gross. He rented out properties for a while now so I guess it’s a hit and miss.
why did you leave out #10 on the list from the website - Detroit Michigan?
I've been investing in Baltimore for a while. The 1.86% is certainly not for most of the city. Good cash flow can come from the plenty of section 8 rent rates on cheap rowhomes. Gotta know your spots.
Just try Aspen if you like cash-flows but the entering ticket is huge , Colorado ..😅😅
Where are you getting these entry point prices from?
@Dave Meyer Hi Dave thank you for all the great data content! Can you please start including Greater Palm Springs/Coachella Valley area on your data. It is a large market of 500k+ full time residents and over 1M in season. You always post lists of data and it will have Riverside or San Diego but not the Desert region market. It would be greatly appreciated!!
You lost me at Rochester and “little crack rock Arkansas”
Cincinnati is solid too
The entry point for Baltimore Maryland was not shown
Great video… very nice and informative ✅
Do you own any property?
Yeah
More than a few actually
@@KayaNina01 Oh wow
What state do you own them in? If you don’t mind
I own mostly in Houston, then a few in Florida
@@KayaNina01 Why Houston?
Great analysis, I’m thinking to move and buy at Little Rock I visit the city last year it was clean and nice. Thanks
Love your videos man!!!!
How is Scranton PA as rental investment in 2024?
Kind of a terrible list to look at this in a vacuum. A lot of these cities have high taxes with crime rates on the rise.
isnt High Cashlow = Higher Risk?
@@baonguyennnnn It sure is! I own high cash-flow SFRs in Toledo, OH. Every month I need to take extraordinary methods to collect rent. It is never as simple as collecting a month's rent for a month's occupancy. There are always excuses. BUT, there is also always a late fee. Late fees alone add an extra month of cash flow every year. 13 months of rent per year, pretty awesome, right? But you have to work for it. If you're afraid of confrontation and you easily roll-over (that is, you'll fall for excuses and sob stories), then be prepared to get paid last and lose money. But if you're ready to fairly and forcefully uphold the business agreement, then you can make very nice cash-flow. Dealing with the City is an entirely additional and different issue. While not draconian and inane like New York or California (I will never own there), you'll have other issues to deal with. A lot of municipalities in OH and MI are passing lead abatement laws, and you need to make yourself aware of them. These laws can cost you a lot of money (1-3 years of free cash flow), and the penalties for non-compliance are stiff. Your only saving grace in these scenarios is that the city government that is enforcing the laws is typically filled with incompetent employees.
I wonder what people are thinking about Jersey city and surrounding areas. Please let me know
Jersey City is hard to find a decent deal everything is very expensive, it does however have a good STR market if you are in downtown or the heights
Beware of buying houses on a crawl space. The floors will cave in and there's big mold problems
Slab foundations have their own issues.
Would look more at Bentonville Arkansas over little Rock
Gross Rent Multiplier is the technical term.
The demographics of all these cities is pretty striking.
What do you mean?
would love a deeper analysis on the baltimore market in 2023. I know from the numbers provided its a great cash flow city, but would like a overall market analysis on baltimore as a market. I like in md about an hour out an I have been intrigued by baltimore market but I know it really depends on where in baltimore city you invest.
All I have to say about Detroit is - be greedy when everyone else is fearful. ROI of 2% is achievable with the right house - not in the best or the worst neighborhoods. Section 8 is still paying more than regular rents.
What about areas in Florida to invest in?
Not a good investment. Prices have gone up nearly 300% in 4 yrs. And with insurance issues it's a hard pass.
RTP in South Cal is around .5% 😅
Appreciation hopefully picks up the slack as the years go by. Eventually sell for a great price. Walk away with a hefty profit.
Some of the most dangerous cities in America.
Every city has good and bad locations. For example, I used to live in little rock. There are portions that are unsafe but that makes up about 10% of the entire city. 80-90% of the crime comes from 10% of the city. The other 90% is safe and rents well. You need to do research on certain neighborhoods. Other cities are exactly like this.. STL, Memphis, etc
@@prefontaine618 Exactly right. That information wasent given so the general public watching should know. Prices are right there for a reason. People should do their due diligence.
@@prefontaine618 What would be the best way to zero in on neighborhoods? I went through the list looking at the cities as a whole on populations, crime rate, job growth, poverty rate, etc. almost all of these had poor results for these fields as a city, what resource could I use to narrow down to neighborhoods. Im looking to break into my first market and I am struggling to find something im either comfortable with, or that has any type of cash flow.
@@DatsDoodoBaby Lexis Nexis neighborhood crime reports
Watch investments pour into Chicago after Valles is the new mayor.
what about Kansas City ?
I'm surprised Detroit is not on the list
Wondering the same
its on the list on their website they made the video from, if you click the link in the description. not sure why they left it out
Cedar Rapids has good cash flow. I get 4 percent
I'm shocked that Indianapolis isn't on this list. Thoughts?
I also wonder about it. I read good things about the real estate market in Indianapolis. What is your thought about Indy?
@@ednasalinas5568 I have 92 properties here, and a management company so Im a little biased. It works for me.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
Great
Love it.
One of the best cash flow assets is a cell tower lease no matter what real estate market you are located. A cell tower lease if structured correctly can pay you passive income for decades and have significant upside value. 5G means up to one million new cell sites in the U.S.
I would love to find out how to enter this business. Got any suggestions?
Shhhh don’t tell them about Dayton!!!
Damn these markets pretty fuggly
Baltimore lol
does Baltimore suck?
The important question is why these numbers are these numbers. There's some socioeconomics that aren't being discussed.
Little Rock, AR * - Alaska is AK 😊
Balt MD city has so much red tape. City favors tenants. Even if you evicts landlord still responsible for water bills. Example two yrs evict section 8 tenant. Housing authorities we able retrieve 14k back rents not including 10:29 Attorney’s fees, water bill, back rents, destroyed property. Not area we will continue invest😢
Cool 👍
Thank you for the work you do and the information you are sharing. What do you think about buying with 0 cash and doing creative financing (private lenders)? Is that realistic in today market?
You’ll be in the red month to month
Great and informative video. Any reason why no median sales prices was provided for Birmingham, AL and Memphis, TN?
What is your opinion on having $500k in a high yield savings account, making $2000 a month or buying properties with the $500k and getting rental income
Let's do a quick simple math. In each one of those places. let's say 150K per house, 30K downpayment, that's 20 houses. Rent is 0.8% rule * 20 * 150K = $24000 per month. let's say you pay 80% expense. you still net 4800 per month. with appreciation of 5% per year and gaining equity, in 30 years you will get bout 13M. Plus the 4800 per month you generated over 30 years, that's about $14728000. That's about 198% ROI per year. Of course this is idea situation, it could go poopoo the other way.
I'm from Philly - don't touch Kensington!
Rent to crime rate ration.
AR not AK, as a citizen of Little Rock
Any good cities to invest in on the west coast or southwest?
I have heard San Diego - the weather, military base, tech companies, job growth, tourism (opportunities to do short term rentals).
Meliora
Curious about your thoughts on the future of the Memphis market given that the Ford/SK plant is going in!
Don’t buy houses in neighborhoods that are declining. No brainer. Rent to college educated people with good paying jobs, that are recession proof.
These can change as economy keep going down this year and next year - high inflation, jobs lost, higher tax to fund wars etc. Be careful!
Hello, blogger, is there a telegram group? Can you pull me to study? Thanks.
Rent in the best school districts-where lots of white collar jobs/residents with white collar jobs-stay as far as possible away from high crime cities/homelessness/drug problems.
I’m the 1000th liker, do I earn any gifts here?
There is 1 thing that all these cities have in common that is not ok to say in our cancel culture society but you should avoid all of these markets like the black plague.
Cheap BUT high crime cities
those are pretty much horrible places to live. good luck getting the rent unless you go section 8
Illl save you 10 mins of your time with a quick synopsis of what was stated. BUY THE HOOD FOR CASHFLOW
Lol #1 crime
IF YOU DO DAVE RAMSEY AND SAVE UP CA$H FRO YOUR HOUSES YOU WILL ALWAYS CA$HFLOW VERY WELL !!!! LOL !!!!
TOO BAD THAT MARYLAND HAS CRAPPY HIGH PROPERTY TAXES !!!! LOL !!!!
Baltimore is an awful city.