Hello, I recently was brought into the world of Real Estate investing by a good friend of mind. He is mentoring me, and wants to partner up on deals. However, he lives in a different state than I do. Is it dumb to invest out of state, even when you have someone who is in the area where you are investing? I am just nervous that I don't know the market and that will come back to haunt me.
Hello @EJ Hyman ! I would definitely suggest for you to look into both your market and the market your good friend/partner is in. Whatever location will get you and your partner to your goals faster is the best. That is assuming that you can trust this individual to take the lead and be the boots on the ground.
People invest out of state all the time and there are many books and forums regarding the practice. Just do your research then take calculated risks!
EJ, Definitely check into your own market. If you live in the Chicago area, you could consider Norther Indiana or even Indianapolis, which is a great rental market. Before you actually pull the trigger, it's good to build a team. The farther you are away from your investment property - the more important it is to have key contacts and good relationships. Good boots on the ground are vital.
I've had a lot of experience with this. Feel free to reach out to me if you have any questions.
I agree with @Ritch Bonisa . Having a team you trust in the area you are wanting to invest is HUGE. I am an out of state investor currently investing in Indianapolis and I can tell you it works. I'd be happy to give you more insight into how I did it!
@EJ Hyman The reason most people invest OOS is they do not have the same opportunity that they will find in their backyard(home market). For example, I'm buy and hold investor from NY but invest entirely in the Mid-West. That's because my metrics were cash flow, land lord friendly laws, price to rent ratio of 2.5% or greater which are not available where I am. So take a look at 1. the type of investing you would like to do. 2. what metrics you will use to evaluate a market. Then use that information to fuel your start. All the best to you. Always remember to persist and you will WIN!!!!
@EJ Hyman People invest out of state when their own local market doesn't fit their objectives and goals. Quantify your objectives and then figure out whether you can achieve them in your own market. If yes, then great. Don't go out of state. If you do go out of state, don't invest in a market just because you have a friend that lives there. That's not a good criteria for investment either.
@EJ Hyman very loaded question. Some say don’t go outside your background but some of us can’t find cashflow around of us and have to go elsewhere.
Yup Orlando FL! #1