Investing out of state
Member since 2025 · 2 posts · 7 votes
Investing out of state
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Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
8moHorrible advice!! I am sorry to say this, but you are lacking a zero in your savings account to even start thinking about real estate, you need 50k+ before you can think about a flip.
But I don't want you to give up on real estate investing.
I've been an investor for 15 years and think it's the best way to build long term wealth. But your next step has to be something else; instead of flipping houses, start with flipping couches, lawn mowers or boats/cars/trailers. Pick something you have knowledge about, can do where you live, are able to physically improve and train your negotiation and sales skills. The principals are the same, it will make you good money and get you ready for real estate investing.
25 Replies
- 8moSeth McGatheyBusiness MemberReal Estate Agent · Milwaukee WI · Member since 2024 · 321 posts · 254 votesHello Matthew, welcome to investing! I think we need more info. You both said you want to flip and that you want purchase and rent out the property until you can figure out whether you want to renovate and sell or continue renting. Generally, if you are going to be doing flipping, the last thing you want to do is get renters in there while you decide about the flip. The things that make successful flippers successful is 1. Deal analysis/deal finding. Identifying a property that will make a good flip and then buying it at the right price to make the deal work. Considering cost of repairs, cost of holding, etc. 2. Quick turn around. Buying the property, repairing it as quickly as possible to cut down on holding costs, and selling it quickly. Generally, good flips are financially beneficial because you are taking either dumps and making them nice/livable or adding bedrooms/bathrooms. Neither of which will be very easy with renters living in it. I recommend either target buying long term rentals or target flips. And the last thing you want to do is buy something and then figure out what you want to do with it. You should know exactly what you plan to do with it before you buy it. Now, having back up plans is a good idea in case your original plan falls through. But never buy a property and then figure out what to do with it, that could leave you in a world of hurt. Feel free to ask further questions if I am misunderstanding you or you want more clarification. And if you are considering the Milwaukee market, I am an agent that mostly works with out of state investors and would be happy to help you learn the Milwaukee market, build a team, and find a property. No matter where you end up investing, best of luck!
Seth McGathey - Shorewest Realtor4.912 Reviews - 8moKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votesI’d recommend using the $5,000 as a small down payment or partnering with someone local instead of trying to flip by yourself. If you invest out of state, rent the property first and only buy where the rent clearly covers the costs.
Kerlous Tadres | Reafco Real Estate541 Reviews - 8moStacy RaskinBusiness MemberLender · Member since 2022 · 1k+ posts · 513 votes
There are fix and flip loans where you can get up to 90% of the purchase price and 100% of the rehab done on draws depending on borrower credit and the details of the property. With closing costs and prices on properties, partnering with someone could be a good idea for additional cash as well as being able to utilize their contacts for the rehab work.
Bright Skyline518 Reviews - 8moJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
@Matthew Moreno
5k won’t get you much. I’d say you’d need 15-20k to get started. I just bought a 3 bedroom turnkey house in Arkansas last week for 13.5k that rents for $700/month. I’m not finding many homes under 15k that are turnkey though. And I’ve gotten a couple loans for around 55k, but they’ll want 20-25% down payments. I’ve bought homes for 20-25k with 0% interest for a year credit cards too. And bought five houses with 401k loans. Look into that as well. Good luck!
Quote from @John Morgan:
@Matthew Moreno
5k won’t get you much. I’d say you’d need 15-20k to get started. I just bought a 3 bedroom turnkey house in Arkansas last week for 13.5k that rents for $700/month. I’m not finding many homes under 15k that are turnkey though. And I’ve gotten a couple loans for around 55k, but they’ll want 20-25% down payments. I’ve bought homes for 20-25k with 0% interest for a year credit cards too. And bought five houses with 401k loans. Look into that as well. Good luck!
wow! turnkey bringing in 700 a month for 13.5K ?? congrats
I may have to shift my focus west!
- 8moJuan YepesBusiness MemberLender · Miami, FL · Member since 2025 · 127 posts · 35 votes
@Matthew Moreno congrats on taking the first steps in your real estate investment journey.
There are several financing strategies that would allow you to become an owner with very little down. Out of state investing isn't really one of them. When you think about investing out of state, with no prior real estate experience, you are looking at 15-25% down payment which is far beyond $5k even if you rolled closing costs into the loan.
Happy to go over your viable financing options and get you to the next step!
Helm Mortgage Corp - Juan Yepes, Director5125 Reviews - Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes8mo
Horrible advice!! I am sorry to say this, but you are lacking a zero in your savings account to even start thinking about real estate, you need 50k+ before you can think about a flip.
But I don't want you to give up on real estate investing.
I've been an investor for 15 years and think it's the best way to build long term wealth. But your next step has to be something else; instead of flipping houses, start with flipping couches, lawn mowers or boats/cars/trailers. Pick something you have knowledge about, can do where you live, are able to physically improve and train your negotiation and sales skills. The principals are the same, it will make you good money and get you ready for real estate investing.
- 8moJuan YepesBusiness MemberLender · Miami, FL · Member since 2025 · 127 posts · 35 votes
Quote from @Marcus Auerbach:
Horrible advice!! I am sorry to say this, but you are lacking a zero in your savings account to even start thinking about real estate, you need 50k+ before you can think about a flip.
But I don't want you to give up on real estate investing.
I've been an investor for 15 years and think it's the best way to build long term wealth. But your next step has to be something else; instead of flipping houses, start with flipping couches, lawn mowers or boats/cars/trailers. Pick something you have knowledge about, can do where you live, are able to physically improve and train your negotiation and sales skills. The principals are the same, it will make you good money and get you ready for real estate investing.
If you read carefully, I didn't say flip locally instead of out of state. I said there are several strategies that require little down. House hacking a SFH or 2-4 multifamily is one of the best ways for starters to create wealth. Not flipping lawn mowers. Appreciate your input thought.
Helm Mortgage Corp - Juan Yepes, Director5125 Reviews
- 8moSamuel DioufBusiness MemberReal Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
I would focus on building more capital first.
You should try to save at least $25-30k before you invest, unless you can get partnership where you spend the time and work and they front the capital.
Reafco - Samuel Diouf528 Reviews - Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes8mo
Hi Matthew,
Jumping straight into out-of-state flips is going to be extremely difficult and very high risk, especially if you’re new. Flipping typically requires more capital, tight contractor oversight, and strong local market knowledge, all of which become much harder when you’re not physically nearby.
That said, $5k can still be useful as a starting point if you adjust the strategy a bit, similar to what @Kerlous Tadres mentioned. The key early on is focusing on education, deal analysis, and building the right team so you’re setting yourself up for a sustainable first move rather than forcing a flip too early. - 8moPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Matthew Moreno
With that amount of capital, I would either decide to invest in the stock market or put it in a money market account till you have enough capital to start tackling deals. On a separate note, I would keep in mind that flipping is like a full-time job. If you don't have any experience in doing rehabs and you plan to do your first one as a flip out of state, I wouldn't recommend it. - 8moAlfath AhmedBusiness MemberReal Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
Quote from @Matthew Moreno:
I have 5,000 to invest in real estate. I want to start flipping houses and was thinking of purchasing out of state. Generally I want to purchase and then rent out the property. Until I can figure out whether I want to renovate and sell or continue renting. Please give me all your advice
Save up $30k to $50k first.
ReafCo | Ahmed Group 539 Reviews - 8moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 956 votes
With $5k, the smartest move is education + positioning, not buying yet. Use that capital to lock in a solid market, build relationships with investor-friendly agents, lenders, wholesalers, and contractors, and learn how deals actually pencil in real life. For flipping or renting out of state, the real risk isn’t the property, it’s bad numbers and weak boots-on-the-ground. I’d focus first on understanding buy boxes, rehab costs, and financing options, then look to partner, wholesale, or bring capital into a deal before trying to own one outright. Done right, that $5k can turn into deal access and experience instead of a costly lesson.
- 8moShawn AckermanPro MemberReal Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
Quote from @Matthew Moreno:
I have 5,000 to invest in real estate. I want to start flipping houses and was thinking of purchasing out of state. Generally I want to purchase and then rent out the property. Until I can figure out whether I want to renovate and sell or continue renting. Please give me all your advice
Hi Mathew. I'd take $1,000 of the $5000 to market direct to seller. This is going to be important to your business longterm as finding your own deals will allow you to scale. Aside from the marketing piece, you need to understand what constitutes a "Deal". I am assuming you have gone through the deal underwriting faze and know how to arrive at net operating income? Finally, if you are thinking of purchasing out of state, especially in Milwaukee you will need to develop a team(Boots on the ground).
Many people want to jump out there without building proper foundation. So here are the steps I suggest you follow with $5K available.
1. Learn how to underwrite a real estate deal. buy and hold - Income-Expenses-Net operating income. Assignment - ARV - 30% - Repairs - Assignment fee = Offer
2. Network with local managers/title companies
3. learn how to go direct to seller. Where to find a marketing list/skip trace/contact motivated sellers.
4. Once you understand how to underwrite a deal from your marketing list you can assign your contract with the seller for cash(Build capital/experience in the market at the same time)
This is what I would do with $5K. Take it or leave it. Best of luck!
- 8moRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Matthew Moreno:
I have 5,000 to invest in real estate. I want to start flipping houses and was thinking of purchasing out of state. Generally I want to purchase and then rent out the property. Until I can figure out whether I want to renovate and sell or continue renting. Please give me all your advice
I think you need to save more than $5,000 before you start. Maybe work with a local investor and start bird dogging for them to gain experience
- 8moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Matthew Moreno:
I have 5,000 to invest in real estate. I want to start flipping houses and was thinking of purchasing out of state. Generally I want to purchase and then rent out the property. Until I can figure out whether I want to renovate and sell or continue renting. Please give me all your advice
$5k won't allow you to buy any property worth investing in.
Buying out of state will require minimum 20-25% down.
Yes there are renovation loans that will allow you to put only 10% into a purchase, but most have minimum loan amounts of $100k-$200k. So, 10% of $100k is $10k - which you don't have.Why do you have so little saved?
How much is your current housing expense?
What can you do to save more?
While you figure out what to do, pick houses off Zillow to analyze and learn:)
Logical Property Management4.9460 Reviews - 8moKerry Noble JrPro MemberInvestor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
id take time to learn as much as you can via youtube, books and podcasts......
dont touch that 5k yet, use those free resources and keep growin that 5K then shoot your shot
- 8moAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Hey Matthew, I love the idea of getting started in real estate and the confidence around flipping. That mindset can take you far. But as others suggested you might want to reset that strategy before choosing a market or deal.
Without knowing much more about your plan, I’d agree with others that $5,000 likely isn’t enough to jump straight into flipping or buying out of state in the way you’re envisioning. Rather than forcing a deal, it may make sense to park that money somewhere safe in the short term, like a high-yield savings account or a short-term CD, while you continue saving and building experience. If you’re able to earn extra income through contracting or learning on the job, you’re growing both capital and knowledge at the same time.
You may also want to consider house hacking if that’s an option for you to start off with. Living in one part of the property and renting out the other can allow you to qualify for a primary residence loan with better terms and a lower down payment, while avoiding some of the hurdles that come with investment loans. You can make small renovations over time, build equity, and let a tenant help cover the mortgage while you save for your next investment.
From a tax perspective, this can be a great way to start. You may be able to deduct things like mortgage interest, property taxes, depreciation, and certain repairs, while setting yourself up for more advanced strategies as your portfolio grows.
I’d also recommend starting to build your team early. Get connected with a lender who can help you into a primary residence and understands investment properties and your goals, along with a real estate agent in the area you're interested in, there's great ones on here. As you grow, bringing in a CPA who understands real estate strategy can help make sure you’re not overlooking opportunities or creating issues down the road.
The biggest thing is making sure real estate fits into your overall financial picture. If you have a high W-2 income or a growing business, you'll want to understand passive vs. non-passive income and how different strategies for long-term rentals versus short-term rentals can have very different tax outcomes. A lot of people get into real estate, focused only on cash flow, and miss the tax side entirely.
Bottom line, build your savings, your knowledge, and your team first. Best of luck and happy to connect!
INVESTOR FRIENDLY CPA®5240 Reviews - 8moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
As others have said, you need more money or partnerships. I'd look to connect with money partners and you'll need to do the bulk of the work. That said, it's going to be a tough sell if you're flipping out of state.
Otherwise, I'd consider getting into wholesaling to raise cash and then flip the good properties.
Brick House CPAs53 Reviews - 8moJames JonesPro MemberInvestor · Collierville, TN 38017 · Member since 2017 · 778 posts · 573 votes
With $5,000, you’re not in a position to flip or buy rentals yet, especially out of state. That’s not a knock, it’s just math and risk management.
A few realities to be aware of:
• Flipping requires access to capital, reserves, and experience. $5k won’t cover earnest money, inspections, holding costs, or surprises.
• Buying out of state adds risk. You’re relying on contractors, property managers, and boots on the ground before you know how to underwrite or manage locally.
• Trying to ‘decide later’ between flip or rental usually means the deal wasn’t clearly underwritten for either strategy.
What does make sense at your stage:
• Use the $5k to buy education + reps, not properties. Learn how to analyze deals correctly.
• Get involved in real estate without owning yet: wholesaling, bird-dogging, JV'ing, or assisting an investor locally.
• Build credit, savings, and relationships so when capital shows up, you’re actually ready to deploy it.
Real estate rewards patience and preparation. The fastest way to lose money is trying to force a deal before the fundamentals are in place.
Focus on becoming deal-literate first. Capital comes much easier after that.
With 5k you're probably looking at wholesaling or maybe partnering up rather than straight flipping. Going out of state just makes everything harder - you need someone local for inspections, finding contractors, all that stuff. Honestly what I'd do is find an investor in whatever market you're eyeing who needs capital and team up 50/50. You handle the money side, they deal with the local headaches. What areas were you thinking?
- 8moEric FernwoodBusiness MemberRealtor · Las Vegas, NV · Member since 2014 · 997 posts · 1k+ votes
Hello @Matthew Moreno,
I will show you how to calculate approximately how much cash and credit you'll need for a flip, plus some critical things to watch out for. In my examples, I'll use a property that will sell for $200,000 after renovation is complete.
Before I continue, here's the reality: flipping can be a great way to make or lose money. Your success depends on four things: selling the renovated property at the expected price, within the expected time frame, completing the renovation on time and budget, and buying the property at the right price.
In the past, several clients wanted to flip properties. Once I showed them how to determine the maximum price they could pay, the challenge became finding a property at that price. This meant calculating the total flip cost and acquiring the property within budget. We went through multiple iterations before they found properties they could acquire for the right price.
Depending on the property's condition, it may not be financeable and must be purchased with cash. Finding a property that can be financed with a conventional loan can be difficult.
Another problem is risk. Someone I met bought a property for flipping. It had what appeared to be mild water damage, so he allocated $5,000 to fix it. Once he opened the wall, he discovered extensive mold that had spread to other areas. I don't know the final outcome, but at the point I met him, he was over $35,000 into mold removal and still couldn't obtain a clean mold certification.
Important Considerations
Maximum You Can Pay
Here is a basic formula for determining the maximum price you can pay for the property:
- Purchase Price < Sale Price – Closing Cost – Renovation Cost – Project Management Cost – Carrying Cost – Cost to Sell – Profit – Pad
Below is an example showing how you would determine the maximum price you can pay for a property.
- Sales price and time to sell and close: Be very conservative when estimating the property's sale price and how many months until escrow closes and you receive the funds. Suppose you determine that you can sell the property once it is in market-ready condition for $200,000 within 3 months plus 1 month to close. So, the hold period (the time you own the property until you receive the sale proceeds) for selling is 4 months. I'll also assume the cost of sales is about 6%. So, 6% × $200,000 = $12,000.
- Down payment: I will assume a 25% down payment. Since I don’t know your purchase price yet, I will assume 25% of the sale price $200,000, so $50,000. Plus, you will need a loan for the balance.
- Renovation cost and time: This is where things usually fall apart. What should you renovate? This is a critical question. Market-ready condition isn't what you personally think it should be. It's the condition of comparable properties that recently sold. For example, if other properties sold with vinyl flooring in wet areas, installing tile would waste money. Another challenge is getting realistic cost estimates from contractors, which isn't as easy as you might think. Your renovation likely won't be expensive enough to attract the contractors you need. For this example, let's assume you've done the necessary research and are confident the renovation will cost less than $50,000 and take less than 3 months.
- Project Management Cost: You need someone to manage the renovation, schedule all work, visit the site regularly, and send progress updates. Budget $5,000 for this. Even if you live nearby and can monitor the work yourself, do you know the proper techniques for surface preparation for tile installation? Without oversight, workers may cut corners or make mistakes, forcing you to spend additional money hiring others to fix their errors.
- Profit: Profit is also an expense. I will assume a 10% profit goal. So, 10% × $200,000 = $20,000.
- Closing Costs: I will assume the closing costs (to buy) are 3% of $200,000, or $6,000.
- Cost pad: There are always surprises, so you need to include a pad (buffer for unexpected costs). The amount of the pad depends on the odds of significant additional costs. For example, if the renovation consists of well-defined costs like carpet, paint, appliances, and light fixtures, the pad can be small. If the renovation includes foundation issues, mold, water damage, electrical, plumbing, etc., you need a larger pad. I will assume a $5,000 pad for this example.
- Time pad: In the real world, little goes according to schedule. I will add a 1-month pad to cover unexpected delays.
Carrying Costs
Here is how I estimate monthly holding costs (these are just example numbers):
- Taxes: $2,400/Yr or $200/Mo
- Insurance: $800/Yr or $67/Mo
- Utilities: $200/Mo
- Total: $467/Mo
The estimated hold period is 8 months total hold time so my carrying cost is 8 × $467 ≈ $3,736.
Total Estimated Cost to Renovate and Close
Description Costs Down Payment 50,000 Cost to sell 12,000 Renovation 50,000 Project Management 5,000 Profit 20,000 Cost pad 5,000 Closing costs - buy 6,000 Carrying costs 3,736 Total 151,736 Maximum You Can Pay
Using the formula from earlier:
- Purchase Price < 200,000 – 6,000 – 50,000 – 5,000 – 3,736 – 12,000 – 20,000 – 5,000 = 98,264
The maximum you can pay for the property is no more than $98,264. If you pay any more, you will likely lose money.
In this scenario, you will need ~$120,000 in cash plus a loan.
Other Considerations
Organization and detailed documentation are critical. The clients I worked with created very detailed spreadsheets and project plans. They tracked each renovation task and ensured there was no "specification creep" (adding upgrades or features that weren't in the original budget).
Colors and styles: My clients and I visited new-home builders and saw the colors and styles they used in new construction. This gives you a reliable benchmark for what today's buyers expect. However, your goal is not to make the property “like new.” Use the builder's colors, but only improve the property to market-ready condition.
We complete several renovations each month so we already have the process and trades people identified. You will have to build a team to handle everything.
Photos sell properties. Many people treat marketing photos as an afterthought. I've seen homes that I know are bright and cheerful, but the MLS photos were so dark and dreary they looked like crime scenes. Also, you cannot take the photos with your cell phone—you need expert lighting and skill. The commercial photographer we work with uses a digital camera that takes multiple exposures every time he takes a photo. He works with a photo-processing group in India that combines photos to make them pop.
Lastly, I recommend doing it near where you live, not out of state.
FERNWOOD Team, KW VIP Realty520 Reviews Quote from @Matthew Moreno:
I have 5,000 to invest in real estate. I want to start flipping houses and was thinking of purchasing out of state. Generally I want to purchase and then rent out the property. Until I can figure out whether I want to renovate and sell or continue renting. Please give me all your advice
With ~$5k, you’re not really in a position to buy or flip out of state yet — that amount functions better as education, positioning, or partnership capital, not acquisition capital.
Trying to flip or BRRRR remotely with limited reserves usually fails not because the idea is bad, but because there's no margin for rehab overruns, appraisal gaps, or timing risk.
If real estate is the goal, a safer progression I’ve seen work is:
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Use this phase to learn underwriting and deal analysis deeply
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Build local relationships in one target market (agents, property managers, lenders)
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Decide whether you want to be an operator or a capital partner before picking a strategy
Once you know which role you’re playing and have reserves behind it, the out-of-state question becomes much easier to answer.
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With 5k you're looking at wholesaling or partnering more than flipping tbh. Out of state adds major complexity - you need boots on the ground for inspections, contractors, property management. One thing that helped me: start with one market, build a solid team there (realtor, contractor, PM), then scale. Don't spread thin across multiple states until you nail the process in one. What market are you considering?
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