Too good to be true?

[John Roeder]

Looking at the equity in my primary residence Im wondering if what I see is too good to be true. Short and simple but without the pertinent details...

The setup:

Due to great appreciation during the last few years in the Orange County, Ca market, I now have approx. $300k in equity in my primary residence. 

The big question:

Is a 10-15% CoC return with a rental property obtainable? If it is realistic, then i am wondering if it would be a good idea to sell my house and invest the approx $300k in rental properties at 10-15% (2500-3750/mo return) I could theoretically live mortgage free as the investments would pay the mortgage for my next primary residence.

I ask because I am about to purchase my first rental (out of my savings) and per my numbers the 10-15% seems easily obtainable, but since I dont have the 1st hand experience yet, I am wondering if I am I missing something.

Could this work?? 

[David Faulkner]

Remember how you got that equity in the first place ... my opinion and experience is that out of state is where equity goes to die. Too many unknowns, too much trust to have to put into people you don't know, in a market you don't know, and too much lack of control to recover if things go wrong. If you wanted to move to KC, my advice may be different, but you don't and most other Californians don't either, and that is why the prices in CA are higher and the cap rates lower than they are in KC.