Live in expensive market and am looking to start in other states. Do you have any tips?

9 Replies

Hello biggerpockets I live in jersey city temporarily but the values on properties here are nuts, so I began looking in nearby states and I saw that 

Pennsylvania's prices are a lot like the prices I see around the forums. I was wondering if you guys had any advice on how I should approach this venture . One more note I don't have a car yet so most of my travel will be through train or what ever. 

Sorry for the bad typing I can not see what I am typing on this phone 

Thanks in advanced

@Adrian Valdez 

I live in Seattle, WA which is also a more expensive market.

I considered investing outside the area and used the following organization to familiarize myself with the cities I was looking at:

http://www.narpm.org/

Property manager are great because they have less of an agenda than real estate agents, are very familiar with the area and are typically investors themselves. Plus, my experience is that many of them are licensed agents, so it is nice to have the buying and managing under one roof.

No car, no big deal. Just start making the calls.

Been there before. I moved from Miami Fl. to Charleston, SC for the same reason. I did well but I now understand that I didnt have to do that. You can find local lenders that understand the market and know the median house prices. You can make it work man just trust the numbers.

Thank you guys for the information. Im starting to study the market and hopefully I will be able to come up with a first deal post in the next few months 

@Adrian Valdez 

@Robert Rainey  

With regards to Robert's comment, my sentiments exactly.

I spent about 2 months looking outside of the greater Seattle region only to find that there are affordable properties in the area.

I am focusing on short sales and houses that need work.

Just be careful! Buying out of state while worth while can have alot of unexpected hirer costs because you are not around. My husband is active duty military so we have totally bought all over because "local". That being said even though we self manage and are able to keep vacancy to almost nothing. You pay a price

*weather you have to pay travel costs to check on the house

*pay outrageous prices to get something done quickly / handy man service

*pay for installation of microwaves etc because your tenants won't do it and neither twill you etc

I am not saying don't invest far away just check the "added" costs. Mortgages are so cheap no in days that they extra fee can take away profits very quickly

Hey @Adrian Valdez I actually grew up in Jersey City, NJ! Sadly I don't live there anymore and moved out to New Mexico for work. Welcome to BP!

As for out of market real estate...although I live in New Mexico, I've been investing in Oklahoma City due to the impressive market. It is a 6 hour drive, so I rarely have the time to take a weekend to visit my properties. However, it just requires me to be a little more diligent and proactive in terms of checking in with my real estate team in OKC.

It's definitely possible. Put a priority on finding a great property manager, and attempt to find a property that is turn-key so you wont need to put too much work in before being able to rent it out. 

Best of luck to you!

Tyler

PA is good (Philly especially), but Trenton is also becoming pretty popular now too. Have you looked there? At least that is in NJ.

I am a new investor and don't own any properties yet but I looked at PA. There are some really cheap properties but the taxes are outrageous. PA makes you pay county, municipal, and school tax. A 20k property could have a 3-4k tax bill and only rent for 400-500 a month. PA was considering doing away with the school tax but it hasn't happened yet. If they ever do I would buy there. I am also looking at OH, MO, and IN as they have cheap properties with less taxes.

PA does high property taxes, but I have found that there are plenty of good deals to be had.  It is absurd that a $21,000 house is taxed $2,500/year.  That said, the tax rates vary by municipality and differ dramatically. 

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