Would Out of State be worth it?

10 Replies

First and foremost, if I put this in the wrong section I am terribly sorry. Just joined the site and am still figuring everything out.

Recently became intrigued in acquiring property to rent out (I plan on reading some of the guides here to learn start knowledge). However, I didn't notice too much in the marketplace area for my State. I understand that it is usually better to be closer to the properties you rent out, but I still was curious if investing in an Out of State property would be potentially worth it.

@Benjamin Aaron Parr there is always a case to be made for purchasing then renting out of state. A lot of it has to do with your own REI strategy, which you will discover in the coming months upon reading the aforementioned guides you referenced.

The best thing you can do in starting out (in addition to reading and accumulating knowledge) is analyzing deals in potential markets that you feel you want to invest in. This could be your neighborhood, your county, your state, neighboring state, or anywhere you want! The focus will be on finding good deals and this craft will develop with the more properties you analyze.

Say you have analyzed deals and you determine the best place to invest is out of state. There you'll start researching how to purchase property out of state. You'll begin setting up a team in that area (i.e. real estate agent, contractor, lender, inspector, property manager, etc.) to become even more familiar with the area and soon enough, that market won't feel like it's out of state anymore because you'll know it so well.

There are many things to consider but I think it first starts with your knowledge and experience of analyzing deals. Determine your investment strategy and I think you will have more answers come to you.

Best of luck!

Out of state investing is great if you're looking to achieve financial freedom and if you have a full time job then turnkey rentals are a great route to go.

Let me know if I can be of any help. 

I've only bought out-of-state properties (living in Los Angeles) and it's certainly been worth it. Great cash flow, lower entry prices.

Originally posted by @Benjamin Aaron Parr :

First and foremost, if I put this in the wrong section I am terribly sorry. Just joined the site and am still figuring everything out.

Recently became intrigued in acquiring property to rent out (I plan on reading some of the guides here to learn start knowledge). However, I didn't notice too much in the marketplace area for my State. I understand that it is usually better to be closer to the properties you rent out, but I still was curious if investing in an Out of State property would be potentially worth it.

 OOS investing can be great when you live in an area that doesn't have good properties, or you can't find the deals you want. Luckily there are ways to invest in other markets and have others do all of the work for you. The biggest one is Turnkey investing. The company would own, renovate, and manage the property all in-house for you. Since you would be living so far, it would be great as everything is done for you. 

@Benjamin Aaron Parr   People invest out of state because they can't find decent deals closer to home.  You live in WV and there are a lot of deals near you. I happen to know an investor who owns more than 40 units in Charleston.  I also know investors who are doing quite well in Morgantown, Wheeling, and Follensbee (sp?).  The low price points across WV make it an easy area to get positive cash flow.  You just need to find deals to buy. 

Suggest that you hook up with some local wholesalers, there is a WV investors facebook page. You should also start looking at FSBO houses in your area. Concentrate your early BP learning on marketing and learn how to find the deals around you.

To your success

Josh 

I think your backyard is a good place to start. The Rental numbers make sense in Charleston and surrounding areas, cross lanes , St Albans , Scott Depot. You can snatch a foreclosure 3 Bedroom for 50k or less (I’ve gotten 2 in the last 2 years for approx 35 with repairs , equity of 35 ) and rent for $850 or more , sometimes guaranteed with HUD. These numbers make sense. Find a network of realtors , contractors , Banks or hard money lenders.
I would say out of state is find if you have some partners , a pm company and on the ground support setup at the locale. Research the are heavily to make sure the market is strong and your investment will grow. Both are possible , but I think wv is good for steady growth and god return s on rentals.

@Benjamin Aaron Parr I came here to basically say the exact same thing as @Josh Caldwell .

I live in the Huntington/Charleston area. Why in the world would you want to invest OOS. We have an AWESOME market right here. If you want to flip then purchase somewhere in the Hurricane/Teays Valley area. That is the only local market to successfully flip imo. 

If you are wanting to do buy and hold and rent homes out for cash flow then you are sitting on top of a gold mine my friend. 

Feel free to reach out any time. 

Hey @Benjamin Aaron Parr , I work with a lot of investors who buy out of state, I have investors from Californi who invest in Kentucky, and visa versa, both flips, and multifamily. Kentucky is a great market near you as well! Let me know if you'd be interested in some info on the Kentucky market, I'd be happy to help! Good luck on the investing journey wherever you decide to start! 

Originally posted by @Benjamin Aaron Parr :

First and foremost, if I put this in the wrong section I am terribly sorry. Just joined the site and am still figuring everything out.

Recently became intrigued in acquiring property to rent out (I plan on reading some of the guides here to learn start knowledge). However, I didn't notice too much in the marketplace area for my State. I understand that it is usually better to be closer to the properties you rent out, but I still was curious if investing in an Out of State property would be potentially worth it.

 Welcome to the site Benjamin.

Tons of folks are investing out of state. I recommend you setup a keyword alert here on Bigger Pockets for the word turnkey. It's probably one of the most widely discussed topics here on the site. As for why folks are investing out of state most do so for 1 of 2 reasons.

  1. They are living in a market they are priced out of and look to Midwestern cities for lower entry prices.
  2. They do not have the time, ability &/or desire to be an active operator in the business of rental real estate. Instead they won't an easy & safe way to park their money.

The main thing you (or anyone) considering investing out of state (especially as a novice or beginner) is that it's not really that complicated to buy out of state. It only becomes complicated when investors try to over complicate or over think everything. Whenever you are buying a property out of state you should do a few things to ensure it's as smooth as possible.

  • Don't buy in the roughest neighborhood in the urban core. Pick a solid B-Class suburban area. Perhaps a nice 1950's built bungalow.
  • Always hire a 3rd party property inspector to give you an unbiased feel for the home. The reports are 40-90 pages long and go through the entire house in great detail.
  • Get an appraisal. If your using financing the bank requires this. This is good. The bank isn't going to let you blow their money. They have more skin in the game then you do.
  • Make sure you get clear title. If using a lender this is a non issue. They will make you do this. It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.
  • Make sure your property manager is a licensed real estate brokerage.
  • Understand you can not eliminate all risk, only mitigate it. If you are risk adverse real estate, (especially out of state) is not for you.

Again, welcome aboard the site & feel free to tag me with any follow up questions you have about the topic of investing out of state &/or turnkey.

Originally posted by @Josh Caldwell :

@Benjamin Aaron Parr   People invest out of state because they can't find decent deals closer to home.  You live in WV and there are a lot of deals near you. I happen to know an investor who owns more than 40 units in Charleston.  I also know investors who are doing quite well in Morgantown, Wheeling, and Follensbee (sp?).  The low price points across WV make it an easy area to get positive cash flow.  You just need to find deals to buy. 

Suggest that you hook up with some local wholesalers, there is a WV investors facebook page. You should also start looking at FSBO houses in your area. Concentrate your early BP learning on marketing and learn how to find the deals around you.

To your success

Josh 

the only state in the US I have not set foot in.... but I have to figure like much of rural PA there are great deals there and very low entry points.. compared to other areas.. I would not go far from home. 

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