I live in the Bay Area where it doesn’t really make sense to invest in rental properties. I have a few homes in the Central Valley but even that area has gotten pricey and difficult to cash flow.
I have been considering in investing remotely. My question is would it be better to choose a market and stick with it or scatter investments in different markets depending on the deal?
It’s tempting to jump to where the better deal is but for convenience, team building and market expertise purposes, I feel it might be better to find a market and stick with it. Thoughts?
I am orignally from the Southern CA area.
I will tell you this: It is much more attractive here in Charlotte NC and other places in the south like Atlanta GA to find and secure deals. Once I come across a deal It just makes sense. Run comps and see what rents are in the area. Estimate the cost of fixing up. The deals I come across in the area are typically win/win. I can wholesale the deal, I can fix and flip it. If it doesnt sale I can keep it and it will always cash flow.
In many places in California it just doesnt work like that. My interest now are in units. 2 to 20 units. For cash flow reasons. Study a market and build a trusted team in that market. I know the LA market is heating up and some areas will always stay hot in CA.
For you. Check out Vegas! I have someone who is doing well there :)
Also the High Desert areas of Southern, CA. Many of the houses there are buy and holds for cashflow.
I have always only invested non-locally and I would be up for buying wherever the best deals are. But I think it also depends on what kind of properties you are buying. The key to remote investing is the team you have on the ground in the area of the property(ies) so whether you should buy in multiple areas depends on your accessibility to teams in each place. If you only have one good team, I would only buy in that one area. But if you get good teams in various areas, buy in various areas.
One trick to maximizing your RE profits is being flexible to always buying in the best and most profitable markets, wherever that may be, rather than staying in one area.
Originally posted by @Joaquin Meraz:
My question is would it be better to choose a market and stick with it or scatter investments in different markets depending on the deal? ... I feel it might be better to find a market and stick with it. Thoughts?
Bingo! The single most important decision an out-of-state investor can make is not the market they will invest in, and it's not the houses they will buy - it's who they choose to add to their team!!! Your team will be your single most valuable resource in the majority of your out-of-state investing; for that reason, I would strongly suggest that you work on establishing a team, and then leverage them to build a portfolio in that market. Economy of scale, hard at work.
With that said, at some point you do need to consider diversification. Whether that's after 3 houses or 50 houses is a personal decision (and a surprisingly complex one - my number is around 7), but either way - that point will only become relevant after being secure in the market.
@Joaquin Meraz ,
I agree with @Ali Boone , @Jeremiah B. , and others that the team is really going to make or break your out of state investing, so a lot of people like to stick with multiple investments in one city, until they set up another team in another area.
I've been doing well in the Bay so far, but will be considering out of state at some point in the future. There's some people around here making good money out of state too.. Good luck! And hope to meet you soon!
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