Here's why I'm glad she changed her mind.
Last fall, I was on the phone with one of our clients, let's call her Dana. She'd been investing in real estate for about four years, had two properties in Phoenix, and was doing well. She called me because she'd found a single-family rental in Cleveland, Ohio for $138,000. The rent was going to be $1,450 a month.
She said, and I'm paraphrasing here: "Caeli, I feel like an ass even asking about this. It's Cleveland."
I laughed. Because I knew exactly what she meant. Cleveland doesn't sound like a real estate investment. It sounds like a consolation prize. It doesn't have the energy of Austin or the name recognition of Phoenix. You can't post it on Instagram and have people say "ooh, nice."
But here's what I told Dana. Let's just do the math.
The Numbers That Shut Down the Snobbery
$138,000 purchase price. Twenty-five percent down, so she's putting in $34,500. At a 6.75% DSCR rate - which is roughly where we were pricing at the time - her principal and interest payment comes out to around $671 a month. Add taxes and insurance, she's somewhere around $1,000 total monthly payment.
Her rent is $1,450.
That's a DSCR of 1.45. She's covering her mortgage and then some, every single month, from day one.
Compare that to one of her Phoenix properties - purchased for $340,000 two years ago, renting for $1,800, with a mortgage payment north of $1,600. She loves that property. But the cash flow story isn't the same.
Dana bought the Cleveland house. And she texted me three months in to say it was the least stressful property she owns.
"This is the piece I'm constantly trying to put out there for investors — do the math. Without actually doing the math, there's a psychology about certain markets that plays people out of very substantial investments just because they hear a name."
Why This Story Matters Right Now, in February 2026
I'm sharing Dana's story because the data coming out this month is making the same argument she almost didn't listen to - just at a national scale.
Investors now represent 30% of all single-family home purchases in the country. That number just ticked up from 29% a year ago. Why are we buying? Because fewer first-time buyers can afford to, which means more people are renting, which means rental demand is genuinely strong right now.
But here's the part most people gloss over: the Sun Belt markets that everybody was chasing two and three years ago are giving back rent growth. Austin is down 5% year-over-year. Phoenix is down 3.7%. Denver is off 3.2%.
Meanwhile, the Midwest is quietly doing something interesting. Rents in Chicago are up 3.6% year-over-year. Kansas City is up 2.5%. Twin Cities up 2.7%. Columbus, Ohio — where Dana is now looking at her second property - is growing its population at nearly 3% through 2029.
This isn't a fluke. It's a pattern. And it's the same pattern Dana stumbled into by accident when she almost dismissed Cleveland.
Quick context: J.P. Morgan forecasts home price appreciation at essentially 0% nationally for 2026. Realtor.com has it at +2.2%. Either way, the era of buying and waiting for prices to do the work is over for now. Income is the story this year.
What About Rates? Aren't 6% Rates Too High to Cash Flow?
I hear this constantly, and I want to address it directly - the same way I would on a call.
Yes, rates are higher than they were in 2020 and 2021. But those years were the outlier, not the baseline. Historically, 6.5% is not a high rate. It's a normal-ish rate. (Between 1971-2026 the historical average is at 7.70) And the investors who are thriving right now aren't the ones waiting for 4% to come back. They're the ones who found markets and properties where the rent-to-purchase math works at current rates.
That's the whole point. Rates don't determine whether real estate investing works. The relationship between the rent and the purchase price determines whether it works. Rates just affect where your break-even point is.
For what it's worth, DSCR loans right now are pricing in the mid 6s for strong borrowers - from roughly 6.5% up to about 7% depending on your DSCR ratio, credit score, and LTV. And here's something most people don't know: the gap between DSCR rates and conventional investment property rates has narrowed a lot. Fannie Mae has added so many pricing adjustments for investment properties over the last couple years that the "conventional is always cheaper" assumption just isn't true across the board anymore.
If you've got a good DSCR property and solid credit, you might be surprised.
What Should You Actually Do Right Now?
I'm not going to give you a 12-step plan. But I will tell you what I'd do if I were starting fresh in February 2026.
First, I'd figure out where I stand on conventional capacity. Our Agency loans - the ones we call Golden Tickets, your Fannie/Freddie conventional loans, still give you the best combination of leverage and rate when you can qualify for them. If you've got capacity there, use it before going anywhere else.
Second, I'd stop filtering markets by reputation and start filtering by math. Cleveland isn't sexy. Kansas City isn't going to impress anyone at a dinner party. But if the rent covers the mortgage with room to spare and you can sleep at night, who cares?
Third, I'd get prequalified before I fell in love with a deal. The difference between an investor who closes deals and one who keeps almost closing deals is almost always preparation. Know your numbers before you're in escrow.
Dana's Update, Six Months Later
I talked to Dana again recently. She's closing on her second Cleveland property this month. Different neighborhood, slightly higher price point, similar cash flow math.
She still doesn't post about it on Instagram.
But she's sleeping really well.
