Hey there —

I ran the same deal in two cities last Tuesday. A Cleveland duplex and an Austin condo. Same rate, same down payment, same assumptions. Cleveland cash-flows $268 a month. Austin is $729 underwater before I even factor in vacancy.

The national headline says home prices grew 0.74% last year. Sounds boring. Sounds stable. It's neither. That number is the Midwest at +3.56% crashing into Florida at -2.36% and Texas at -1.09%. Two completely opposite markets averaging out to a number that describes neither of them.

I spent all week breaking down what this means for where to buy in Q2. Five metros passed a strict screen: cash-flow positive at 6.46% rates, rent growth positive, supply tight, job anchor present, insurance manageable. Cleveland leads on yield. Indianapolis is the #1 buyer-friendly market per Zillow — active listings up 27%, which means you're negotiating from strength. Kansas City is the momentum play at 2.2 months of supply. Birmingham posts yields up to 13.6% with the lowest property taxes in the nation.

The theme running through all of this is a shift I've been calling the Two-Speed Market. One side of the country is accelerating — rents climbing, zero concessions, supply constrained. The other side is still absorbing a construction glut from 2022. Same country, same rate environment, opposite math.

And if you're wondering how to actually screen deals in these markets, the 1% Rule is dead. It doesn't see interest rates. A property that "passes" at 4% and at 7.5% isn't being screened — it's being ignored. The replacement is three numbers: cap rate, DSCR, and cash-on-cash return. Takes 90 seconds. Works at any rate.

Here's what I'd do this week: pick one of those five metros. Pull up three properties in the $200K-$300K range. Run the Three-Number Screen. If the Zillow estimate says $350K but the appraisal says $310K, you've already found your negotiating leverage.

Which metro would you start with? Hit reply — I read every one.

Martin