Investing out of state

6 Replies

I live in Southern California and I am looking into buying some out of state rental properties. Now my question is, should I reach out to banks/lenders in my area to get financing or should I look into lenders in the area (Ohio, Arizona etc.) where I am looking to purchase my investments? If any one has any experience in this space please let me know what you have done or seen done.

Thank you

@Adam Smith Personally I find it best when a buyer is using a solid in-state lender. Many lending programs are Federal programs but each state practices slightly different.

Example: in Arizona, we rarely use attornies on anything residential however in some states attornies are commonplace.

In the Realtor Community, a good local Banker/Broker pre-qualification will help you get an offer accepted easier than if you were with one of the large banks etc. Service from the big banks is not known or revered by most Realtors. Of course, big banks get it right once in a while, my experience gives it a 50/50 shot of turning out well.

Thanks for the question!

It may be easier to look for  a local lender as lenders in your area may not be licensed to originate loans in your target investment areas.  

I'm in AZ and when I started to invest in Ohio, I couldn't find a conventional lender that matched my needs so I asked my AZ lender to get licensed in Ohio, and fortunately they did.  

Good luck,


Cash is king.  You are going to find in most markets, the winning bids are cash with a short close.  You can use hard money as a means to be more competitive, in that case the lenders location matters less. 

@Adam Smith , I live in Orange County and invest out of state in several states.  I suggest that you start with the small to medium sized banks in your particular investment areas.  But, your selected lender will also depend on what type of properties you're pursuing: hard money lenders for quick closings or properties requiring substantial work versus conventional lenders for conventional properties.

There's a lot of suggestions about using lenders local to the property. My preference is to use national lenders. That way you're always dealing with the same person and don't need to call around for new lenders each time you enter a new market (which can take a lot of time). If you're looking to buy in an LLC, check out national commercial lenders like Chase and US Bank.

If you looking for hard money, I usually prefer the national ones as well for the same reasons and because they usually have cheaper rates.