Buy a second home in CA vs invest in rentals out of state

[Steve Shin]

Any comments/suggestions would be much appreciated. Thank you all in advance. 

My wife has a condo in Carson, CA which she cash re-finance recently. We don't have anymore equity and the cash was returned to her mother. I have identified two options for us in RE below, let me know what you guys think.

1) We would rent the condo for $700-$1000 more than the current mortage and purchase another property with 5-10% down, however our mortage would be closer to $3500-$4000. 

OR 

2) We could stay in our current condo and use the money to invest in few properties out of state. Since we're both new to the real estate investment field, we would intially work with a turnkey investment property route. Please feel free to provide any recommended TKP.

Thank you all,

[AJ Singh]

@Steve Shin

Unless you have capital to go to 5 OOS acquisitons in a couple of years, stay local.. you can invest in riverside or san bernadino county in 2 to 4 multifamily assets and make a good rental yield in a couple of years..You will certainly make appreciation locally rather than cash flow initially.

Also remember that OOS cash flow markets are as hot as LA market. Nothing in b class or above neighborhoods is at value.. The prices have shot up compared to last 3 or 4 years..maybe doubled or tripled as well..

Once you identify your OOS cash flow market, reach out to a realtor and tour the area and neghborhoods. Dont invest a dime before doing your due diligence.

And when you see turnkey deals, ask yourself why didnt a local investor buy it ?